Growth of performance marketing during 2020 and expectations from 2021 - ETBrandEquity.com

The best is truly yet to come in the ever evolving space of digital marketing. (Representative Image)

By Neha Kulwal

The performance marketing space has seen an accelerated growth amidst the rise of SaaS platforms, along with the growth in popularity of affiliate networks. Increased dependence on new third-party tools has also aided in the measurement of ROI from paid marketing activities. With consumer behavior changing in the post pandemic era, ROI measurement should comprise both long-term and short-term strategies going into 2021.

In the current times, brands which are entirely functional in the online space are not just concerned with brand awareness - they are also focused on getting performance driven results through their marketing activities. With advanced analytical tools, advertisers now have the freedom to pay for achieved results. This is what is expected from performance marketing, wherein, the advertisers disburse money, based on the generation transactions or qualified leads by marketers.

Neha Kulwal

In 2020, a lot of customer value generation was being achieved through an increased focus on personalized messaging, and efforts on human-centered marketing involving micro-influencers and social commerce added the momentum for growth, establishing a deeper consumer connection.

Emergence of D2C in the post-pandemic online ecosystemOwing to the pandemic, people have minimized physical visits to the stores and have instead started relying more and more on e-commerce platforms. Reacting to these events, several brands shifted or increased focus on the online channel as a means of reaching and acquiring users using the D2C model.

Within digital, affiliate marketing was the preferred avenue, as it was a cost-effective alternative to traditional methods in times of social distancing. This was because with affiliate marketing the focus is always on generating actual sales, rather than promoting a brand. This ROI-based digital D2C approach taken by several beauty and lifestyle brands enabled them to keep up the momentum even during the COVID-19 crisis.

Search engines and their role for marketing

Search engine marketing, a cornerstone of digital marketing in general, continued to be an enabler for several brands that are moving from offline to online, with carefully chosen SEM keywords aiding customer interest towards an ad. In fact, this space too has opened up new streams, considering that voice searches are increasing in proportion, on top of the defining role played by search engines. For example, Google's Ad-words generated billions of dollars in revenue for the company, making it a sought after search-based performance marketing avenue for thousands of brands.

Affiliate Marketing and its phenomenal growthLike most metrics of other channels, affiliate marketing too has seen a growth in the past year owing to the pandemic. As a revenue sharing model, and facilitator of multiple digital mediums for advertisers, affiliate networks have played a major role in the paradigm shift that has occurred in bringing businesses online.

Affiliate Networks will continue to home publishers and advertisers of every size, while undergoing growth due to marketing diversification by brands. Indian users' affinity for smartphones, in-app purchases, and inclination towards shopping online during the festival times will drive its growth going into 2021. Moreover, the meteoric increase of websites and content publishers is helping affiliate channels build on the opportunity, providing new ideas for collaboration. The result-oriented mechanism has worked best for all stakeholders, and the utilization of bots, search engine optimization, and browser extensions has improved manifold within a year. The space is open for exploration as all stakeholders are still discovering how optimally affiliate networks can be utilized.

Programmatic Advertising and its trajectory in 2021

Driven purely by AI and Machine Learning-enabled digital channels, the real-time bidding for digital ad placements has witnessed a surge in revenue, like other trends in the performance marketing space. Brands often look at programmatic ads to diversify their marketing spends, as targeting ads towards prospective buyers has allowed them to reap rewards.

Be it Demand-side Platforms (DSPs) or Supply-side Platforms (SSP), the automation of processes is helping both advertisers and publishers streamline ad-buying and allocations, and the trend is only going to rise with expanding networks and businesses. The fact that it can work independently, as well as on a performance basis, gives brands the room to pick what works for them best. Moreover, the adaptability achieved by this stream of marketing across desktop, mobile, TV, and other video-based channels speaks for itself.

According to Statista, programmatic media will yield an approximate $127bn in revenue by 2021. Various avenues will contribute towards the growth of programmatic ad buys, and with the increasing audience penetration of OTT platforms across households, the rise of connected TVs and devices, programmatic advertising can act as a highly targeted source for marketers to reach audiences. We are at the center of a booming IoT universe, which is enabling seamless access between devices. This is providing advertisers with user insights for better engagement and ad targeting.

Social Commerce as the next big thing in the 'digiverse'

With the rise and rise of visual and ephemeral content, it has been interesting to see innovative trends and continuous expansion of social media channels in 2020 that have found their niche through the delivery of the new-age shopping experience. Experimenting with bot-driven, chat-enabled commerce, micro-influencer collaborations, higher frequency of user generated content, and usage of AR to enhance frictionless shopping experience will continue to provide results, and increase marketing spends on the part of brands. The trend is not just limited to popular social media platforms like Facebook or Instagram, but also the emerging platforms like Telegram that are leading s-commerce trends. Telegram, for instance, facilitates better reach for brands through a performance driven approach. Be it groceries, FMCG, fashion & lifestyle brands, among others, adopting a multi-channel marketing mix, and a diverse portfolio of media channels will grow exponentially in 2021 as well.

Consequently, data-driven insights will only improve the marketing for brands as they look at customization and personalized solutions for customers. Tracking customer response to online campaigns on social media and deciphering the requirements could make all the difference for brands. It will also hold the promise to deliver higher accountability, trust, and value for dollars spent in paid marketing. The best is truly yet to come in the ever evolving space of digital marketing.

-The writer is country manager, Admitad India.

DISCLAIMER: The views expressed are solely of the author and ETBrandEquity.com does not necessarily subscribe to it.
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