“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today's column is written by Rivi Bloch, CEO at Taptica.
Get a marketer from a big brand in a room with a mobile app developer and, odds are, you will see the two have very different strategies. But that won’t be the case for much longer.
In the next two to three years, brand marketing and performance marketing will move closer together as brand marketers adopt more sophisticated measurement tactics and performance marketers invest in more brand awareness campaigns to create and retain loyal users.
By 2021, the lines between branding and performance will be so blurred that we may not even use those terms.
The rise of the hybrid approach
Performance marketing was traditionally all about return on investment: Spend one dollar and hope to get back three or four. Today, companies realize it's more than that.
The app space is more competitive than ever, and the growth of new mobile users has slowed. In 2017 there was hardly any growth at all in smartphone shipments, increasing the need for app developers to retain users. They also need to think beyond driving installs and focus on building loyal audiences.
Marketers have a better chance of building loyalty if they create a brand that users recognize and relate to. Program engagement and ad memorability are decreasing, particularly among millennials and younger generations. Consumers are more interested in experiences and interactivity than hard sells, and they prefer brand storytelling over traditional ads. Regulatory changes are also catalyzing the shift from traditional advertising to more consumer-centric approaches.
In response, app developers are increasingly investing in branding tactics not widely used in the past. For example, when big gaming companies launch new games abroad, they often use out-of-home advertising and TV commercials to bolster their targeted mobile performance campaigns. By comparing the performance of these campaigns to previous ones that did not have branding components, they can see that brand advertising is having a measurable impact on their performance metrics. They can also look beyond short-term gains and track lifetime value to understand the effect branding has on their long-term monetization goals.
Technology advancements and user behavior fuel the merge
Another evolution is happening in tandem: Brands are getting more adept in data analytics. They are thinking and acting like performance marketers, using data to target their audiences with precision and to measure and optimize their campaigns.
In the United States, most digital advertising is bought and sold programmatically. With the rise of smart TVs and addressable television, TV buying is changing, too. Marketers have access to more targeting and measurement capabilities than ever before and work to connect users across devices. If you can measure the effects of your TV ad and even optimize it to improve results, it sounds more like performance advertising, even if the goal is brand awareness.
But even as television evolves, no brand can afford to ignore mobile, which accounts for nearly 70% of digital media time spent for US users, according to comScore. A growing number of big brands, including retailers, CPG players and automotive giants, are creating apps of their own, which forces them to understand the performance space.
Advancements in measurement and attribution also make it harder to define where branding ends and performance begins. App developers are getting better at understanding all the touchpoints that play a role in a conversion. They are embracing view-through attribution, in which they track impressions, not just clicks, to understand how their advertising is performing. Someone may see an ad and go to the App Store two days later to download it. Is that branding or performance? It is hard to differentiate, but it is increasingly easy to measure.
What marketers can learn from one another
As a performance marketer, it is hard for me to understand how someone could own an app and not have clear visibility into every action taken by users. If you can’t measure this well, it will be near impossible to evaluate branding. In the future, all marketers will use data to measure and optimize their advertising and their app experience, regardless of the campaign’s objective.
Performance marketers will learn from brand marketers, too. In the performance space, there are data and tools to calculate the ROI of media spend with precision, in near real time. You get used to this immediate gratification, and it is easy to get caught up in data details while losing sight of the big picture.
As app developers spend more on branding, they need to see the forest for the trees. They will learn to take a broader view in their marketing analyses. It is not just about measuring the effect of, say, moving the placement of a call-to-action button in an ad or app. It is about understanding how the messaging impacts brand awareness.
In the not-so-distant future, big brands and performance app marketers will approach advertising quite similarly. All marketers will realize that they need people to love their brand, not just download their app – and everything can and should be measured. The lines are blurring, but this new hybrid should result in better performing advertising, regardless of what it is called.