29 Mar Why is Performance Marketing so Difficult at the Moment?
Here are some of my takeaways from our networking lunch last week on “Why is Performance Marketing so difficult at the moment?”
The death of the cookie
In the olden days of performance marketing, if you were selling men’s underpants then you may spend £1000 to get 20 sales. In the cookie-less world, you have to spend £2000 (men AND women) to get to the same 20 people.
But actually, we have been through this before with the Adblockalipse.
Most people use GA to measure the success of their performance marketing campaigns (loved by the finance guys – more of this later)
The question is… has this ever been a perfect tool?
Humans are famously gullible when presented with seemingly accurate complicated figures.
What about data protection and privacy regulation?
This is not just a European thing; 10 years ago 2% of the world had regulations around cookies and on-line privacy. Now it is closer to 60% and rising. In the US this even changes at state level… see California.
Not everything that can be measured is important and not everything that is important can be measured. Performance marketing channels are still important but they are less perfect than the less perfect past.
Whilst the above point is true, this can be an existential threat to performance marketing budgets.
How can Finance get their heads around a more fuzzy theory of ROI?
“What do you mean a £1 spent here generates a revenue of £? there?”
If you are really honest (morally and intellectually), you have never been seeing the whole truth. You may have been seeing trends.
Ironically, it is perhaps the most technically advanced pureplay businesses which have been most affected by data privacy regulation. Businesses that have been built purely on this model of granular customer data are suffering. Older legacy businesses, used to a more ambiguous approach to measuring marketing efficacy, actually have an advantage.
So maybe it is time to get modelling (Econometrics vs Marketing Mix Modelling)? First-party data is now more crucial than ever and organic assumes a far greater role in your marketing mix.
But it is difficult to model anyway and particularly in the current environment – COVID-19, inflation, supply chain problems, war… not to mention Google changing the goalposts.