It’s hardly surprising given the growing pressure on brands to survive inflation and the cost of living crisis, that more marketers are focusing on performance marketing alone.
According to Marketing Week’s second annual Language of Effectiveness Survey, supported by Kantar, 11.8% of marketers are prioritising performance-driven marketing. This is a marked increase from last year’s figure of 8.6%, reflecting the environment marketers now find themselves operating in.
Yet despite this increased focus on performance marketing, nearly half (48.2%) of the marketers surveyed believe their campaigns are too focused on performance marketing.
At the same time, the percentage of marketers exclusively working on brand marketing is slightly down, from 14.9% in 2022 to 14.2% today, according to the survey of 1,300 marketers. Meanwhile, a quarter (25%) focus on both but with a skew towards performance, up from 23.7% last year, while those who work on both but with a greater emphasis on brand increased by one percentage point from 27.6% to 28.6%.
The percentage of marketers dividing their focus between brand and performance equally decreased from 22.1% to 17.9%.
Is the ‘golden trinity’ the optimum way to measure marketing effectiveness?Several key drivers underpin the increased focus on performance marketing. The top reason is pressure from senior leadership to achieve targets (45.2%), followed by the fact it drives more short-term returns than brand marketing (39.5%), and it’s easy to communicate the returns to the business (36.9%).
Indeed, 57.5% of marketers say they have increased their focus on short-term marketing over the past 12 months. This compares to just 10.4% who have decreased focus on the short-term. Meanwhile, 52.9% say they have upped the ante on long-term brand building.
Pressure from the C-suite to perform rises among marketers from larger organisations (those with more than 250 employees). Half of all marketers surveyed (50%) say their focus on performance marketing is the result of pressure from senior leadership to achieve targets. The other top reasons are it drives more short-term returns than brand marketing (42.7%) and it’s easy to communicate (40.7%). A third (32.7%) also suggest a need to beat competitors to the sale is also driving the increased focus on performance.
For SMEs, pressure from senior leadership is again the top reason for focusing on performance, but a lower percentage cite this as the main reason (38.9%), followed by the fact it drives more short-term returns (35.4%) and it’s easy to communicate returns (31.9%).
B2B marketers are also feeling more pressure from senior leadership (50%) than their counterparts in B2C (41.1%). Both B2B and B2C marketers cite the fact performance marketing results are easier to communicate (39.2% and 36.7%, respectively) as a reason for focusing on performance, but more B2B firms (29.8%) than B2C (18.9%) are upping the focus on performance as they are missing sales targets.
The long and the short
Despite having a track record for paying less attention to brand, B2B marketers focus more on longer-term branding building than their B2C counterparts, the data suggests. In fact, 18.1% of B2B marketers focus solely on brand, compared with 9.9% who focus only on performance.
This is something Marketing Week forecast at the end of last year, as B2B brands look to embrace the power of brand more.
B2B marketing leaders have been making the case for increased investment. Craig Inglis, Sage’s executive vice-president of global brand and integrated marketing, said last year his team had been looking to secure more brand investment. Likewise, Maersk’s head of marketing, Anne With Damgaard, told Marketing Week in October: “I think maybe some B2B companies are not aware of the long term, or the brand-building part… We are very much aware that we need to have both.”
The 2023 Agenda: B2B businesses embrace the power of brandIn contrast, 13.5% of B2C marketers focus on brand alone, while 13% focus on just performance. For brands with a mix of B2C and B2B, 10.9% pay attention to brand, and 12.5% performance.
For B2B brands, the current environment is pulling focus towards brand building to aid recession recovery. Almost a third (29.3%) of B2B marketers say they are using brand to help ensure the business is in a good position when the tough economic environment starts to ease, a figure that drops to 25.6% for B2C brands and 24.2% for brands with a mix of both.
Just over half (56%) say their business understands the need for both short-term and long-term efforts. However, that leaves 23% who say they company doesn’t see the value of investing in both.
This is the first article in a series Marketing Week is planning based on the Language of Effectiveness data, in the coming weeks we will be exploring how economic uncertainty has impacted budgets and how success is communicated to the wider business.