The Anatomy of a Performance Marketing Organization | Industry Insights | All MKC Content | ANA

The Anatomy of a Performance Marketing Organization

By Dr. Ram Singh

It's no surprise that CMOs have been under constant pressure in recent years to deliver more from existing budgets. Advances in martech and adtech, coupled with availability of larger datasets to analyze, have helped the entire marketing ecosystem; this also means that marketers must find new ways to push scale and efficiency, as general improvements are available to everyone as "best practices."

Further, this increases competition, and the demand for extraordinary performance. Meanwhile, the shaky 2023 U.S. economic outlook is turning the pressure up on performance goals. As such, according to The Wall Street Journal, brands are looking for seasoned performance marketing leaders to help navigate these factors to improve all returns, short-term and long-term.

So, why do organizations struggle to set up a true performance marketing engine, whether in-house or outsourced? Numerous studies like this Gartner report reveal the most common reasons are lack of clarity regarding performance analytics, tactical issues with collecting and preparing data and the talent mismatch associated with it.

It's also fundamentally important to acknowledge that performance marketing goes beyond looking at specific channels (e.g. SEM, SEO, Social, affiliates etc.) or reporting out the metrics associated with these channels (CPCs, CPMs etc.). In order to move beyond this siloed myopia, performance marketing teams, which all too often sit in isolation, need to be integrated into the entire client structure; otherwise they perpetuate short term revenue by channel behavior.

A holistic approach to performance not only involves building new data science enabled solutions to increase channel output and throughput, but it also needs to overlay rich analytics across every channel and touchpoint to truly maximize business outcomes. This includes new product development, improving margins, delivering a better customer experience that stands out from the noise, improving lifetime value and using it recursively in marketing decisions.

Realizing the benefits of performance marketing starts with an understanding of what an organization's maturity is toward practical and advanced use of data. At the heart of this self-reflection is an assessment of how performance improvement is expected to impact the organization. Will it result in cost containment and revenue growth? Will it grow the customer base? Once these bigger, existential questions are answered, then one can look more granularly.

That includes analyzing how the organization buys biddable channels across the board. Does it use a standard publisher provided feature? Does it "understand" how the selected solutions adjust bids at a granular level? Will it be possible to build a self-learning unsupervised model specifically for its business data that can sit on top of a buying platform and drive bids?

Similarly, its approach to customer journey could be that different paths have been mapped, or a fractional credit is assigned to each touchpoint in a path, or that the solution can model the likelihood of a customer jumping from touchpoint 1 on journey A to touchpoint 2 on journey B with a transition matrix that dynamically triggers campaign adjustments associated with these jumps.

Clearly, there is a different level of usage of data and its application through advanced techniques, associated with each answer above. The way one approaches these business questions directly impacts the choice of the performance solution one will be able to use, and the extent of improvement that it will deliver.

Clients stand at all different points along this spectrum. Regardless of the level of maturity and specificity of the company's structure and operating paradigm, we should all be considering the following steps:

  • Building a clear measurement plan. This not only becomes the basis for how the impact of performance campaigns will be determined and socialized, but also helps with a focused selection of tech-stack and data science solutions, including the "build/buy" decision.
  • Identification and cataloguing of data sources that the marketing team has access to. The choice of the data infrastructure, whether centralized or decentralized, is a direct outcome of this cataloguing process.
  • Selecting the right partner who can help build and implement these solutions. If one has an in-house team, or are planning on standing one up, or building an extension of the team through a service provider, the maturity model coupled with the tactical determinations above will become the core of the performance marketing engine, as it can identify what the company's current talent can support, and where the partner will need to step in.
  • Periodic re-evaluation of the lift of a given solution. It is only human to develop a close affinity with a solution that one is responsible for. However, it is equally important to keep an eye out for when the lift associated with the performance solutions starts to dip or stagnate. Momentum in marketing campaigns is very important, as it affects things like ad creative (which impacts recognition and recall), price efficiency, and competitive edge. So, having the ability to deprecate solutions in time before they are outdated, will help keep the scale and efficiency momentum.

Those four considerations will offer every marketer a road map to creating a bespoke performance marketing culture and infrastructure that optimizes every company's overarching business goals. Structuring one's marketing operations in the right way is critical to success. Scaling a full-funnel marketing approach during turbulent times and amid adverse economic conditions as presently exists requires shared vision with one's marketing partners, organizational agility, and leadership resilience.

The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.

Dr. Ram Singh is chief performance media officer at Crossmedia.