Analytics Partners has found that 80 per cent of brand messaging outperforms performance messaging – a trend that it expects to continue in 2023 amid difficult economic conditions.
The marketing analytics company analysed hundreds of billions in marketing spend to create its latest ROI Genome Insight Report, “The Marketer’s Guide to Survive (Even Thrive) in 2023”, which offers guidance to marketers ahead of 2023.
According to Analytic Partners’ analysis, 80 percent of brand messaging outperforms performance messaging, and dominates are the best long-term strategy to win over customers and their loyalty in a tumultuous era of high inflation, job insecurity, and economic volatility.
Thirty percent of paid search is driven by, and directly attributable to, brand and upper funnel marketing, while another 30-60 percent is driven by non-marketing factors such as seasonality, loyalty or category trends.
The analysis highlights that increasing marketing spend during economic downturns has yielded positive ROI growth in back-to-back years, and 17 percent growth in incremental sales for 63 percent of brands.
If organisations are planning to reallocate marketing spend, the data indicates that a pivot from lower-funnel (i.e. pay-per-click, measured through conversions, or price cutting and discounts) to the ‘upper funnel’ marketing activities (i.e. video, social media, SEO) will build stronger emotional engagements with consumers and ultimately foster more loyalty, advocacy and conversion.
Overall, upper funnel tactics, while only 25 percent less effective in the short term versus lower funnel tactics, were found to be 60 percent more effective over the long term in all market conditions.
Nancy Smith, President & CEO at Analytic Partners, says: “As we enter a new year of economic uncertainty, consumers are feeling the pressure on their purchasing power, while marketing teams are facing increasing demands to reduce spend. Yet, this decision to cut can incur a 15 percent loss of business for companies that reduce marketing budgets when their competitors do not.
“Achieving success in 2023 will require brands to channel resources toward marketing activities that emphasise brand marketing and measurement of omnichannel touchpoints that lead to long-term impact.”
In addition, the report offers insights on how to best develop marketing strategies to position your business to achieve its goals for 2023. For example:
- Cap performance marketing spends at no more than 50 percent, so that at least half goes to brand and other upper funnel marketing activities.
- Capitalise on the power of targeting – nearly 75 percent of sales generated by marketing come through media channels that enable a targeted approach.
- Take an omnichannel approach – spending on connected TV (CTV) has reaped a 30 percent stronger return on investment than other advertising spend.
- Invest in every customer touchpoint to track real-time data and make truly informed business decisions.
