Now several months into a global recession, the economic roller coaster of COVID-19’s impact on commerce is still some distance from reaching its conclusion. As with all recessions, there has been a varied impact on individual businesses and industries. However, this pandemic’s unprecedented nature — and the measures implemented to try to control it — have created far greater extremes.
Brands that were agile and able to lean into the dramatic shift in consumer demand quickly found themselves successfully riding the wave. By virtue of its nature as a data-driven and pay-for-performance channel, performance marketing technology was able to lead brands in those efforts.
Performance marketing: A safe haven
Before the pandemic, performance marketing was known for being cost-effective and risk-free, thanks to its pay-for-performance model. The past 12 months have stress-tested that assertion, serving to prove the channel as a safe haven to secure return on marketing spend during even the toughest economic climates.
Amid the early months of the pandemic, one of our major luxury retail brands harnessed affiliate benchmarking to compare their traditional paid search marketing with an affiliate paid search trial. By their second month, they had generated more than $600,000 in incremental sales revenue and turned the trial into an evergreen strategy, complementing their existing paid search campaigns while continually adding to their bottom line during a period when they needed it most.
Additionally, a well-known large retailer in our network leveraged the accountable nature of the performance marketing channel when COVID-19 hit and saw more than 50% in same store growth. Due to stay-at-home orders, this retailer was not able to fulfill its marketing photo shoots, so they turned to influencers and editorial publishers within our ecosystem to get fresh, authentic, on-brand content into the market for their wider business, all at an efficient cost — along with the ability to measure engagement and conversions against their KPIs. This retailer’s focused effort with performance marketing yielded a ROAS that is 160% higher than the returns of their other channels.
At its core, the innovative and agile nature of performance marketing allows partnerships between advertisers and publishers to evolve rapidly, adapting to shifting consumer demand. Publishers have the pulse on their audiences’ needs and continue to release new consumer-focused solutions. Brands can easily tap into these partnerships by working with diverse publisher models that meet consumers where they are. Ultimately, this allows brands to scale marketing efforts while benefiting from third party brand promotion. This scale, combined with the accountability of a pay-for-performance model and the transparency that technology and data provide, are the important foundations that enabled brands to drive value throughout 2020.
Performance benchmarks: Driving revenue-critical decisions
Even during the best of economic times, it is always important to understand both the bottom-line value a channel brings to a business and its performance against others in the same vertical. But over the past 12-months, tracking that value and performance has been vital.
The good news is, data allows brands to evaluate the channel’s true incremental value and compare program performance against standardized benchmarks on global, regional, country, industry, vertical and product category levels. Through global trends and insights,advertisers can act on emerging micro-trends highly relevant to their business. A powerful example is the surge in mobile conversions and traffic during the beginning weeks and months of the pandemic as people began to work from home. With early insight into this change, advertisers and publishers were able to adapt and hone strategies, affording them a competitive advantage — not only in their marketing but elsewhere in their business as well.
Defining success in 2021 and beyond
While performance marketing has offered increased levels of accountability since its inception, its benefits have never been realized as completely as the industry has witnessed in the past 12 months. The level of innovation and adaptation required to survive and thrive during this volatile time has accelerated digital marketing, shining a light on the immense value that partner-based marketing provides. Given a future poised for further rapid-paced evolution, especially as vaccines are rolled-out and economies recover, these vital tools will further define brand success.
As the world begins to reopen, performance marketing is well-positioned to continue to be a mainstay for businesses seeking to drive consumers into physical venues when it’s safe to do so.
Given the global recession, it will be key to tap into consumer desire for discounts and offers that ease the cost-burden of purchases. Coupon, voucher and rewards strategies — potentially combined with in-store redemption where applicable — have the potential to drive new, existing and lapsed customers to conversion.
Advertisers currently using performance marketing should also consider recruiting new and diverse publishers to their program. Examples that have shown success in recent months include buy-now-pay-later fintech publishers driving incremental business for brands throughout the pandemic, tapping into their existing audiences to prompt purchases that otherwise would not have occurred. Further, these publishers are shown to drive high-value purchases, with average order values upwards of $375, while increasing new-to-file customers by up to 60%.The global pandemic accelerated the consumer shift to e-commerce by around five years, but it’s not just consumers that have evolved. Businesses and their marketing functions have learned valuable consumer-focused lessons about harnessing data and insight, accountability in performance and the value of an agile, scalable channel.