Is Performance Marketing losing its appeal?
On its own, yes.
How true or real is this claim?
Allow me to ask a bothering question! How many brands have been built spending heavily on paid marketing alone? The moment you stop spending, your brand will not be seen and probably, selling will be a struggle. No?
As a growth marketer, I am compelled to confess that traditional marketing plays a pivotal role in complementing performance marketing.
Relying solely on performance marketing often proves insufficient, particularly for B2C brands. This assertion holds significant truth.
Many performance marketers encounter challenging and budget constraints.
Why does this happen? Here are some potential reasons:
– High CAC
– Digital saturation
– Over-emphasis on hyper-personalization
– Imbalanced utilization of automation versus humanization in messaging
– Limited proficiency in fostering social currency
Before I delve deeper into these reasons, let me put across an absolute truth.
In the last decade, traditional advertising lost some of its appeal. In turn, marketers pivoted investments from traditional channels to digital channels.
However, a recent report by the 28th Edition of CEO Survey suggests that a shift is underway. In contrast to the historical trend, in August 2021 and February 2022, marketers predicted that traditional advertising spending would increase by 1.4% and 2.9%, respectively.
So, why is traditional advertising aka brand marketing on the rise, and why paid marketing is losing its importance? I have observed five drivers behind the shift.
CAC is on the rise:
It has been attributed to supply and demand challenges within performance marketing. With an increasing number of advertisers vying for a limited pool of ad space, competition intensifies, driving up costs.
Brand owners prioritize immediate business conversions over cultivating emotional connections with potential customers. Consequently, they tend to allocate the bulk of their investments to digital advertising, neglecting efforts to embed their brand in the consciousness of consumers.
It’s unsurprising that if this pattern persists over a decade, CAC will inevitably escalate.
In this scenario, traditional marketing should emerge as essential for fostering brand recall and ensuring mental availability among customers.
User behaviors are changing due to digital clutter:
Over the past decade, marketers have shifted their investments from traditional channels to digital platforms. They aimed for higher conversion through extreme automation and hyper-personalization. However, this strategy often proved counterproductive, particularly when implemented at the early stage of the customer journey. And it often led to consumer reactance, especially among those unfamiliar with the brand.
There is no balance between automation and humanization:
In the pursuit of automation for performance marketing, numerous brands have neglected the crucial aspects of distinctive humanization in their messaging. Their focus on heavy investments in performance marketing frequently leaves brands short of funds for critical brand-building endeavors as well.
To address this, brands must incorporate traditional media to play a pivotal role in aiding brands with this endeavor.
Performance marketing alone can’t generate enough social currency:
It is not surprising that performance marketing often falls short of generating sufficient social currency. To maximize reach and impact, marketers must complement digital strategies with traditional media approaches.
Sooner or later Google will phase out third-party cookies:
How will marketers extend their reach in the cookie-less era? They will be forced to rely on segmentation methods that are closer to the traditional advertising model.
In wrapping up, it’s clear that marketing is all about finding the right mix of old and new techniques. While performance marketing brings the numbers, traditional methods add that personal touch and help build lasting connections with customers.
As we anticipate shifts like the phase-out of third-party cookies, marketers must remain agile, leveraging a combination of strategies to effectively engage audiences and drive results.
