This positioning is misleading. After all, the term “performance marketing” comes from “pay-per-performance marketing,” not “pay-per-clicks-that-hopefully-lead-to-performance.” The performance that brand marketers are looking for is revenue growth, not more clicks.
Flipping the funnel
If at the start of a campaign, you know every dollar spent on tactic A will result in a 7X ROAS, and you hope (but won’t know until the modeling results come back several months later) that every dollar spent on tactic B will yield the same return, you should first exhaust the available spend for tactic A and only invest in tactic B if budget allows. Otherwise, there’s a good chance of throwing money away.
And yet, brands continue to prioritize upper funnel tactics for a few reasons.
First, there’s momentum. Many marketing teams invest in certain channels simply because “it’s what we’ve always done.” Second, it’s sexy. What CMO doesn’t want to add a cool, splashy campaign to their portfolio?
Lastly, brands have been swayed by upper funnel media and MMM platforms, arguing that brand media helps educate consumers on the benefits of a product, creating sticky purchase behavior over time.
That may be true, especially in high-consideration categories like cars. But the most effective way to educate consumers, grow awareness and inspire them to spread the word about your brand is by getting the product into their hands. This is particularly true in lower consideration categories such as grocery CPG. And given the mounting pressure on marketers to be more efficient and prove the results of their spending, the first dollars should always go toward the most measurable and proven performance tactics for driving incremental sales.
Smart digital rewards are among the best tools in a marketer’s toolkit for converting people into purchasers, especially now when 64% of shoppers say price outweighs brand name and 75% are willing to try a brand if it’s offered at a lower price.
That’s not to say brands should ignore upper-funnel media altogether. Retail media has helped close the attribution gap and is much closer to performance marketing than the tools that came before.
However, the most successful strategies utilize digital and cash-back rewards up and down the funnel, combining brand media with a stronger call to action that drives conversion and pulls consumers through the purchase consideration process. We see this often as brands have shared that media, paired with an offer, drives improved ROAS compared to that media alone.