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Adam Heimlich VP, Search and Performance Marketing Twitter
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Performance Marketing Must Die

Digital technology has rendered the sales process transparent. Brands that can recognize this fact have an enormous opportunity. How the brand wants consumers to feel, what it wants shareholders to believe, the government to do, the news media to report — are all revealed in a single set of search results. To effectively sell within this churning ecosystem of overtly targeted and obviously unintended messages requires organizational confidence and openness. Methodically insulated from ideas and salesmanship, the performance marketer is positioned to distract organizations from the imminent threat of a revolution in consumer perception, caused by digital media.

Have you ever received an email offer that looked good until you searched the name of the product? Ever visited the site of an iconic brand and found it cheap? Have you seen a funny commercial from a company with an infuriating online application process? Have you had trouble finding a brand on your mobile browser because sales affiliates masquerade as it? Can you name a brand that interacts in the same personality it broadcasts?

The source of all this dissonance: Digital technology has rendered the sales process transparent.

Brands that can recognize this fact have an enormous opportunity, and no use for what we call performance marketing, which refers to DR, search, display advertising and social media. However, it actually describes a set of activities inadvertently designed to deny the reality of a transparent sales process.

The problem with the performance marketing organization is its separation from the sales, service and merchandising teams — which is to say, from everyone directly involved with customers in any capacity. The performance marketing team is also traditionally walled off from second-hand research into customers and their preferences, which features insights of value for creatives, whose task of connecting emotionally is widely perceived to be the opposite of performance marketing. Methodically insulated from ideas and salesmanship, the performance marketer is positioned to distract organizations from the imminent revolution in consumer perception caused by digital media.

The reality

Today, everyone sees brands naked, except their marketing executives, who praise the lavish new clothes of performance.

Sales transparency means the end of efficacious channel marketing. The salient point of a channel is physical confinement — as a metaphor for media, it makes as much sense as “dialing” a phone. Because messages spill out of their containers in a manner more un-channel-like than previously imaginable, smart brands assume any consumer might see any message, regardless of whether a message is intended for them. These brands aspire to sell with nothing to hide. The assumption behind performance marketing, in contrast, is that inconsistent, inferior or irritating online communications are no more dangerous than a bit of junk mail.

Brands that issue communications for specific purposes are, in fact, mostly creating awareness — not of the brand’s “story” but of its value, which tends to make for a more interesting narrative. How the brand hopes consumers will feel, how it actually regards them, what it wants shareholders to believe, what it wants the government to do and what it wants the news media to report are all are revealed in a single set of search results. To effectively sell within this churning ecosystem of overtly targeted and obviously unintended messages requires organizational confidence and openness.

Performance marketing teams, on the other hand, sustain antiquated beliefs in messaging and measurement, separate from sales and service. They reenact a historical drama of sequenced stimulus and response, pretending that their audience is playing within the arbitrary rules they’ve created. The word “performance” itself accidentally attests to the theatrical nature of digital media “roles.” The ostensible actor is not prospects or customers, but a featureless outline of their activity captured in data. It’s a shadow play, designed to fool and delight a willing audience.

For example, every Razorfish client has goals around customer acquisition and retention. But almost no Razorfish clients task their performance teams with optimizing media toward these goals, though the data is always accessible. Similarly, every Razorfish client wants their Web site to engage visitors, yet nearly all performance managers ignore their bounce rates. And all performance clients want more digital sales, but none try to discover the optimal context, sequence and content of messages that lead to digital sales.

Brands’ willingness to buy into performance marketing despite its inability to harness the power of digital gives the game away. Their function is to keep the problem under the rug for now, and to carry the blame for “underperformance” should a more adaptive competitor enter the market.

The solution

Replacing performance marketing with something that can impact the bottom line is a matter of three corrections: Introduce the right motivation, the right skills and the right process for media optimization.

Motivation can only come from the top. If the one or two leaders responsible for all the customer interactions influenced by or measured in digital media don’t acknowledge that transparency makes performance counterproductive, no one can. That’s the first step toward dismantling performance marketing’s regime of specialized expertise and fragmented accountability.

To supply the right rationale, leadership must specify goals for all media — paid, earned and owned, online and offline. Note that a CMO’s request to assess how its various media efforts function together cannot be met under existing corporate structures. Generally, the performance team has broadly applicable data, while its people function as a specialized machine focused exclusively on online sales or some other isolated measure of activity. Brand affinity, customer retention and creative teams’ ability to influence and persuade are optimized separately and slowly, with data sets less fresh or actionable than what is collected constantly through digital channels.

To retool the optimization process to account for all marketing goals simultaneously, a CMO must task channel teams with expressing shared goals in compatible — which usually means chiefly digital — terms. That is, if reach is a proxy for effectiveness, the effect should be validated. While paid search collects sales, its brand impact can’t be ignored.

It may seem easier to manage against baseline costs and conversions, but customers aren’t as numb as marketers are to the sense that a company is chronically undervaluing digital operations or brand building. They know when the company Web site is useless, or they’re getting hit with 10 discount offers a day. Transparency means that biased or arbitrary communication choices will play out in public. Without consistency of measurement, there is no justification for valuing any marketing action over any other. Additionally, there is no basis for optimizing marketing actions in combination across channels, which is how they are always experienced nowadays.

This requires big change. And there will be chafing. A performance marketer veering away from the usual charade is like a retail cashier reallocated to the sales floor, only worse. Although no VP is responsible for addressing total brand perception in a customer setting, brands’ service staffs effectively have that job. Compare their qualifications for meeting customers in their space to those of the performance marketer, whose putative value is rarified “expertise” with spreadsheets and software.

Implementing the right skills starts with a reassessment of the value of quantitative experts to digital marketing efforts. There is no doubt that data analysis and predictive modeling are important. No less certain is that a feel for what’s behind activity data and a knack for imagining scenarios not explicitly supported by the numbers are also required for media optimization. Many marketing organizations staff for targeted digital media as if its challenges were linear, and the optimization process mechanical. Early successes in social media have clarified how unspecialized and playful in its approach even a very serious interactive brand should appear. That comes from an appreciation for the softer side of digital.

Get started

A good place is to start is including people with sales and creative experience on the optimization team. However, the turning point in digital marketing skills correction comes from leadership that is as engrossed in misses, as it is in hits. Brands that want marketers to automatically deal out optimal responses to customer actions task them with learning above all else. It’s in the broad application of patterns of consumer action to brand operations that marketing results can be dramatically improved, so aspire to replace performers with teachers.

A necessary casualty of a shift from expert posturing to reflexive learning should be in the performance marketer’s toolset. If the performance data software is too old to support channel-agnostic feedback for holistic optimization, it should probably be scrapped. The good news is the replacement can be much more user-friendly. Software built for performance marketers tends to be opaque because performance marketing itself was designed to deny visibility.

The right process for digital media optimization features universal accessibility to data feedback and common knowledge of goals. A marketing organization in which teams keep secrets from each other is unlikely to optimize transparent communications. On the other hand, shared responsibility for published results sets good teachers free. Where goals are intertwined, such as brand perception and retention, site engagement and product awareness, or SEO rank and social campaign adoption, collaboration is easily incentivized. Where interests compete, such as share of voice versus lead conversion efficiency, leadership must be accountable for balancing power, and for trade-off decisions aligned with current business strategy. Automatic optimization, far from a mechanical specialty, is mostly engaged marketers entitled to act.

An organization so adapted to current media reality would find it hard to ascertain where its digital optimization team begins and ends. Like its customers, the marketing department would be constantly aware of what it’s trying to do and why. Competitors who place accountability for digital success in a dungeon where no idea or insight can penetrate will start to look shackled indeed.