Performance Marketing Budgets to Increase as Marketers Chase ROI

October 12, 2020

Ascend2 Outlook Performance Marketing Budgets Oct2020When it comes to paid strategies, performance marketing campaigns appear to be a growing area of interest for marketers, with budgets in this area following suit. Indeed, a new report [download page] from Ascend2 shows that some 42% of the marketers surveyed say their performance marketing budgets are expected to increase by up to 20% in the year ahead, while 1 in 5 (18%) expect an even stronger uplift.

Nearly all of the more than 270 marketers surveyed report that, in regards to the success of a paid strategy, the importance of performance marketing has increased, with 45% saying it has done so significantly and 49% saying it has increased moderately. Likewise, they claim that their performance marketing initiatives are very (54%) or somewhat (44%) successful in achieving their primary objectives.

As such, only about 1 in 10 (11%) report that their budgets dedicated to performance marketing initiatives will suffer a decrease in the next 12 months, while 3 in 10 (29%) will be keeping budgets at the same level.

Goals and Effective Channels

With other marketing strategies, proving and increasing ROI is often a driving factor. A performance marketing strategy is no different. For half of the marketers using such a strategy, increasing ROI is a primary objective.

Marketers have also set audience-based objectives, with 44% focusing on improving audience targeting and 42% stating that increasing audience is a primary goal. Others cite making data-driven decisions (39%), maximizing budget (27%) and improving measurability (26%) as objectives of their performance marketing strategy.

To achieve these objectives, 7 in 10 marketers are finding social media marketing to be one of the most effective channels for their performance marketing campaigns. Overall, since the pandemic began, social media has been one of the go-to channels for many marketers, with more rating it as effective in reaching target audiences than did a year ago. There has also been evidence showing that marketers are keen on working with micro-influencers, which can be a particular benefit for those looking to drive sales of niche products.

About half (49%) of those surveyed say that search engine marketing is most effective in executing performance-based programs, while fewer find e-commerce marketplace advertising (37%) and partnerships or sponsorships (34%) most effective.

Creating Strategies and Allocating Budget Prove Challenging

As with any aspect of marketing, there are always challenges involved. The most prevalent issues cited by respondents appear to be creating a comprehensive strategy (48%) and allocating budget (45%).

Earlier research shows that siloed or difficult to access data has served as a challenge to gaining insight from data. It remains a problem for marketers in this most recent survey, with 37% citing data management and siloed data (37%) as an impediment to the success of performance marketing strategies.

Outsourcing is Prevalent

Per the report, a large majority (80%) outsource at least part of their performance marketing to agencies, with about three-quarters (77%) using a combination of in-house and outsourced resources. Only one-fifth keep their performance marketing initiatives solely in-house.

When outsourcing, respondents look for agencies that are responsive (46%), experts in multi-channel (46%), innovative (45%) and flexible (38%). They also find data-management/privacy awareness (38%) and integrated execution (34%) to be desirable attributes.

The full report can be found here.

About the Data: Findings are based on a September 2020 survey of 274 marketers targeting B2B (42%), B2C (33%) and B2B and B2C equally (25%).

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