Back when variety shows were a staple of prime time, periodically the guests would include a guy who could keep a dozen or so plates spinning on the end of sticks without any crashing to the floor. This is an apt metaphor for what it’s like to work in marketing these days. While variety show audiences were fairly certain the guy wouldn’t drop any plates, CEOs aren’t so sure. A whopping four out of five of them report feeling a lack of confidence in their CMOs.
Antiquated organizational design, poorly defined role descriptions, corporate culture that devalues marketing’s contributions, and inadequate skillsets all can distract from the primary mission of lifting sales, but it doesn’t have to be this way.
Too often, CMOs react to this uncertainty by constantly resetting priorities, reacting to crises, and trying to outguess a rapidly changing marketplace. Inevitably, this anxiety impacts the rest of the marketing organization, as well, and people end up just treading water rather than trying to swim ahead.
The good news is that there is a sure-fire way to counter the chaos: focus on delivering results that directly grow the business.
It’s a simple concept in theory, but judging by the high rates of CMO turnover, it’s anything but simple in practice. Antiquated organizational design, poorly defined role descriptions, corporate culture that devalues marketing’s contributions, and inadequate skillsets all can distract from the primary mission of lifting sales, but it doesn’t have to be this way. Whether you work in branding, creative, retail, sales enablement, product, PR, or any flavor of social, mobile and digital marketing, growing the business is your job. The key to making this happen is to adopt a performance mindset.
Performance-Based Marketing Defined
The first thing to get out of the way is the notion that performance marketing is synonymous with user acquisition. Though that may be true in some companies, in truth, customer acquisition is just one type of performance.
Here’s a better way to think about it: performance-based marketing means delivering a measurable impact on moving customers from one stage of the funnel to another.
If you work in branding, your job is not to buy impressions efficiently. Impressions are merely a currency. The brand marketer’s job is to convert customers from being unaware of a brand, product or service to aware, engaged, and, increasingly, purchasing what you offer. You can measure performance by increases in aided and unaided awareness and the number of customers that want to be contacted by via email. If you use linear TV, now you can measure your impact with the mother of all metrics: sales.
Adopting Performance-Based Marketing Means Adapting to Change
The inability to persuasively measure top-of-funnel movement’s impact on sales has dogged brand marketers and their CMOs for years. That is precisely why we built Simulmedia’s VAMOS platform. It delivers this very outcome. We’ve seen how our clients have adjusted to a performance approach. Here are some of the most notable changes brand marketers should consider as they become performance-minded:
1. Redefining marketing team dynamics: In organizations that equate performance with user acquisition, the notion that brand marketing can increase sales at first might cause tension. CMOs should be prepared to give their brand marketing teams the permission they need to treat TV as an investment, not a cost. Absent that air cover, many brand marketers may continue to believe that their job is to buy impressions cheaply.
2. Client-Agency Goal Alignment: In a world in which TV advertising is unaccountable for producing results, the only thing that a client-agency partnership can impact is ad cost. That changes completely when a marketer can establish a causal relationship between TV advertising and sales. The moment a marketer figures out how to use advertising to increase sales, she comes to care about one thing: growth. If her agency still prioritizes costs, the misalignment will impair even the most brilliant strategy, so performance-based brand marketers should align their incentives with those of their agencies’.
3. Paying Agencies for their Performance: A growth-minded marketer will want her agency partners to relentlessly look for ways to grow, too. This costs money, but as long as the channels your agencies support continue to produce, inclusive of agency fees, the growth will outweigh the costs.
4. Tap into Your Company’s CRM: For those companies that own customer data, the CRM is the most valuable marketing asset available. In many organizations, though, the CIO or CTO controls that data. Maximizing ROAS (return on ad spend) requires data- and privacy-secure access to this data, and that may require a marketing partnership with the CIO or CTO that does not currently exist.
5. Modeling Return on Ad Spend and Attribution: How much should a marketer spend on TV, digital, paid social, or retail marketing? That depends on the ROAS per channel. While developing this model may require an attribution model that awards credit for each sale to the channels a marketer deploys, the resulting insight will help her determine the right amount to spend in order to maximize her return.
The inability to persuasively measure top-of-funnel movement’s impact on sales has dogged brand marketers and their CMOs for years.
While making these changes requires effort, the payoff can be enormous. That’s especially true when it comes to TV advertising. For too long, TV has been one of the largest line items in a brand marketer’s budget, yet it has been the last to be optimized to deliver measurable, meaningful outcomes.
Addressing this isn’t easy, but once they do, marketers can change the way they approach their work, build reputations based on provable results, and ultimately grow their careers.
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