Performance Marketing – The Most Certain Marketing Channel in an Age of Uncertainty
The eruption of COVID-19 has certainly been one of unprecedented magnitude, with businesses of all sizes feeling the impact, both economically and emotionally. In anticipation of the worst, many brands may look to cut back their marketing spend to try and save on variable costs as they brace for what the future holds.
But slashing marketing budgets in a time of crisis can do more harm than good in the long run1, especially for brands that have already established themselves in the public eye. Evidence has shown that brands who promote with the booms, and pull back with the busts, often lose market share that can take months, or even years, to regain. In reality, the best thing businesses can do in a time of economic uncertainty is shift their marketing efforts to one that provides trackable, tangible results – and that’s performance marketing.
The performance marketing industry is uniquely positioned to offer a flexible, and accountable, way for marketers to continue their marketing in an era of extreme unpredictability. Below are just a few of the key ways performance marketing can provide some certainty in an uncertain economy.
Only Pay for Results With A Performance Marketing Model
The performance marketing model has a unique benefit that stands out among other marketing channels – you only pay for results.
Let’s say you’re in the Food and Beverage vertical and you have a food delivery app. A CPI network aligns your app with partners (or affiliates, or publishers – see our take on the semantics here), who then promote your app to their unique traffic sources or audience. When a customer clicks on your ad, a tracking link leads them to your website or landing page. From there, you will only pay if that customer performs your desired outcome – in this case, installing your food delivery app. Marketers can benefit even further by using the performance marketing model on action completions after the app install has taken place. Looking for app users to place their first delivery order within a week of install? The affiliate partners in your CPI Network can help with that.
Results can come in the form of a number of actions, such as filling out a lead gen form, purchasing a product/service, or signing up for a subscription. Whatever your desired outcome, you only pay after achieving that outcome, at a commission rate agreed upon before beginning the campaign.
Conversely, many other marketing methods rely on top-of-funnel, assumed impressions or views. In these cases you pay up-front in the hopes that results will occur, but there is no guarantee. In a time of economic uncertainty, utilizing your marketing dollars on outcome-driven methods is the most prudent investment. Performance marketing keeps ROI as the focus, which not only helps during economic low points, but sets businesses up to soar when things shift back to normalcy.
Performance Marketing Benefits: Greater Flexibility, Lower Risk
Performance marketing proves time and again to be one of the most nimble marketing methods, thanks to the great flexibility it provides. Affiliate partners are paid based on flexible commissions set by the marketer that change in tandem with consumer demand.
Depending on the vertical your company exists in, you have the ability to shift focus where it matters most. For brands in verticals doing exceptionally well, because their products and services are in high demand (get more insights into vertical performance by downloading our Pivoting in a Pandemic whitepaper), they can focus on volume and ramp up their budgets accordingly. For other marketers, profit margin, as opposed to volume, could be of greater importance in this volatile market. Performance marketing allows them to swiftly calibrate their commission rates to support margin in order to better back into their ROI goals.
Performance marketing gives brands the ability to take on as much, or as little risk as they desire in their marketing efforts. This is of critical importance as we all try to mitigate risk in an unpredictable economy.
Measurable Outcomes for When Data is Needed Most
A key differentiator for performance marketing, when held up against more traditional marketing methods, is its ability to provide tracking around exactly which affiliate partners, and traffic channels, are providing desired results. In an economy where budgets are only going to be scrutinized more than usual, it makes sense to invest in methods that deliver definitive results, and through which you can pinpoint exactly what percent of each sale can be attributed to marketing, rather than investing in marketing methods with unclear conversion rates.
In a recession, it’s more critical than ever for brands to see that customers are still converting – both old, but especially new. Performance marketing can track the success of things such as upsells, or subscription renewals for existing customers, while utilizing strategic targeting to reach and track new consumers across all digital marketing channels. Using this measurable information, marketers can optimize their marketing tactics based on real results, rather than assumptions.
Retain Customer Loyalty
Though you may only pay for conversions vs impressions or views with performance marketing, that doesn’t mean the impressions aren’t happening. At a time when society is looking for stability and reassurance, it’s crucial that you maintain your online presence through this unpredictability from a place of empathy and support for your consumers. As you look for the right messaging, performance marketing provides a great means for A|B testing to see which offers are resonating best with your target consumers, as the measurable data on conversions will point to the highest performing ads.
In times of economic uncertainty, brand-loyalty can be questioned and doesn’t always resume when the economy begins to improve. By maintaining your performance marketing campaigns, you can ensure you’ll remain top-of-mind when consumers are looking to make their online purchases.
Opportunity in Uncertainty
As we face this challenge of a global pandemic, we have a chance to uncover remarkable opportunities. With proactive marketing, marketers with online businesses can keep their footing in a turbulent economy.
As an industry built on transparent, up-front expectations between advertisers and affiliates, performance marketing proves to be one of the most stable, and scalable marketing solutions for your business in economic uncertainty. Positioned to continuously adapt to meet consumer’s evolving needs, performance marketing is the opportunity you have right now to maintain your brand’s exposure, maximize your ROI, and only pay for the results that matter to your business most.
With over 20 years in the affiliate and performance marketing industry, Perform[cb] has experienced the economy at its best, and its worst, but time and again performance marketing has proven to be a stalwart force among marketing channels. Learn more about how we can support your business’s affiliate or performance marketing program by emailing firstname.lastname@example.org or filling out our marketer application.