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It's all performance

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Agency News

Published by

Charles Vallance

Date

10/02/2020

The art of positioning involves more than simply defining where a brand stands. It involves finding a space from which that brand can cause maximum inconvenience to its competition.

There are lots of ways to do this. You can go higher order, you can make a superiority claim, you can pick a fight, pre-empt, transcend or disrupt. But the most ruthless move of all is to de-postion your key competitor. 

This is why I take my hat off to the person who coined the phrase "performance marketing" and then fiendishly restricted its definition to the narrow end of the marketing funnel: to search, programmatic, retargeting and affiliates. In one master stroke of a linguistic land grab, not only did this genius establish the unshakeable performance credentials of narrow media, he/she also tacitly undermined the credibility of broad, brand-building media such as TV, posters, radio, print and cinema. Reducing them, implicitly, to the status of non-performance media. It is a brilliant turning of the tables. In football parlance, it's the classic six-pointer.

It is also, of course, fantastically misleading. All media should be viewed as performance media. All media channels should deliver ROI. The skill is to find the right blend of channels for any given brand or budget (spoiler alert: brand fame is probably the biggest variable in this context). And this is where our genius has muddied the waters. His/her positioning is so strong that it has potentially lulled us into a misapprehension that brand-building is nice for the long term but has little or no impact in the short term.

Once this logic takes root, it is not long before we begin to regard brand-building as a bit of, well, a luxury. In this prevailing climate, which chief executive, unless marketing initiated, is likely to oppose a cut in brand spend in favour of the largely unquestioned contribution of performance marketing?

And so the argument becomes increasingly circular and we see a decline across our industry in creative effectiveness, as chronicled by magazines like Campaign.

Fear not. The problem is addressable. And, like a lot of problems, it soon begins to fade once you replace opacity with daylight. The main counterargument to performance marketing is that it's parasitic. It doesn't make the sale but, by being the last link in the purchase chain (the click, the retarget or the search word), it gets the credit for a sale that would have happened anyway, having in fact contributed nothing but additional expense. This is an easy argument to prove or discredit. Just switch the performance marketing off for a couple of weeks. If the sceptics are right, and the sale was going to happen regardless, there will be very little negative impact. If they're wrong, then sales will fall off a cliff.

We've conducted this precise test on behalf of a number of clients and, generally, you end up cutting the performance budget by around 50%. In one notable case, it was more or less 100%. This has two obvious benefits. First, you stop wasting money through duplication or, as one of our media planners puts it, you stop handing out flyers to a queue of people already going to the gig. Secondly, you have more money to invest in the media that is truly performing, fuelling higher sales across all media channels.

As 2020 gets into its stride, it feels we may be seeing a long-overdue reassessment of true media performance. At the end of 2019, Adidas made trade press headlines by acknowledging that it had overinvested in narrow media at the expense of broader reach. And in the past few weeks, we have seen numerous examples of big advertisers advertising bigger, with both Kimberly-Clark and Colgate-Palmolive posting $100m year-on-year increases in advertising spend. Hershey's, meanwhile, ran its first Super Bowl ad following a more than 10-year absence.

John Wanamaker famously ruminated that "Half the money I spend on advertising is wasted – the trouble is I don't know which half". Things are probably a bit more measurable than they were back in good old John's days (he died in 1922 at the age of 84). If he were still around, what might come as a bit of a surprise to him is to find out, 100 years later, that much of the "wasted" 50% appears to be going into a thing called "performance marketing". Such is the power of positioning.

This was published by Charles Vallance

Charles is a brand strategist who began his advertising apprenticeship at Burkitt’s, working subsequently at BBH and WCRS. In 2002 he decided to start working for himself and, along with his three partners (Rooney Carruthers, Adrian Coleman and Ian Priest), set up VCCP. Their founding client was O2, to whom they are eternally grateful. Over the last two decades, Charles has worked on and, in some cases, helped launch a diverse range of brands including O2, ING, Hiscox, easyJet, Canon, Cadbury, Domino's, Dyson, Nationwide, and Vitality.

Outside of work Charles doggedly pursues a variety of sports including cricket, tennis, football, golf, shooting and snooker, all at a consistently low standard. Charles is a Trustee for both The Change Foundation and The Fred Foundation and is co-author of a book called The Branded Gentry.

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