Is performance marketing dead?Digital performance marketing is the best isn’t it? Inexpensive clicks, direct call-to-actions, and fully trackable campaigns from impression to conversion. It’s so easy… or is it? Between privacy policies and decentralization of digital content, marketers are in for a bumpy ride for the foreseeable future.

Between 2005 and 2015, we all (marketers and business leaders alike) lived in an attribution-based marketing utopia. For every penny in, we were able to track the return out. Branding and clever creative, while still important, took a back seat to the growth hack that was digital marketing.

When it came to data, it was the wild west. Websites and apps were harvesting troves of user data that could be internally referenced for their own advertising platform’s ad targeting. Tracking could pin-point a user down to their location, company name and address. There was no reason to not buy completely into shifting funds from general brand building activities over to performance marketing channels.

Then things started to change. In Europe in 2018, the GDPR Privacy Policy was enacted. Companies were now required to be more transparent with users and give them the ability to opt-out of advanced tracking. In 2021, Apple drastically changed its privacy policy in iOS15 for apps, requiring that users be given an opportunity to opt-out of tracking as well. In addition, the maximum duration for retargeting users in apps was reduced to 7-days, barely any time at all.

In my honest opinion, all of these are good things. Users should not be taken advantage of. Tracking should be limited and should be granted by the user, not forced upon them.

You’ve experienced the depths of hell created by this system. Terrible foreign companies, peddling dollar-store quality knock-off products by hammering you with ads and retargeting in obnoxious ways. We saw how politics was affected by this along with the algorithmic manipulations.

Where does all of this leave marketers and business owners?

Grappling with the uncomfortable truth that marketing won’t ever be THAT easy again. The cheat code is fading away.

Performance marketing isn’t entirely dead yet, but now is the time for markets and business owners to start reconditioning their brains to think more broadly about their marketing strategies.

Attribution is only a half-truth.

It’s becoming more widely accepted that basic attribution tracking is only a half-truth. It’s far more likely that a user who converts on a website via a contact form or purchase point, was first exposed to the business or product in a channel that is no longer being tracked.

For example, a user could see an ad for a pair of shoes on Instagram, look at them, log them in their memory and in four weeks search for that shoe brand on Google and purchase the shoes. In this scenario analytics will attribute that conversion’s point of origin to SEO, which it was not. It was social media. Does that make social media a poor platform for advertising the shoes? Is SEO the best channel for this shoe company? Neither can be known. The only thing that can be known is that the two channels worked in tandem to convert that user.

The mis-attributed scenario in the specific user experience detailed above has been dubbed “Dark Social” in the marketing industry. Essentially, social media via advertising, thought leadership, content publishing and word of mouth can have a sizable impact on conversions attributed to other channels such as paid and organic search and yet, get no credit for it.

This is happening across all channels. So when attribution, a half-truth, is viewed too granularly, it’s possible to think that marketing efforts in that channel should be deprioritized or stopped entirely and it’s just not the case.

The rise and fall of digital channels.

We’re also starting to see the decentralization of content and subsequently the users digesting that content over numerous digital channels. Mega-channels of the past like Facebook and Twitter are losing traction with audiences. Snapchat came and went in a flash. TikTok is the fastest growthing channel, but incredibly hard to advertise in with its approach to content.

New Twitter replacements like Mastodon and Blue Sky are being taste-tested by users to see if they can bring the same content experience. Reddit, which emerged as a very viable ad channel, is now also seeing users flock away amidst an API pricing and utilization controversy.

Now that digital channels and technology have matured, the “big three” (not a real name, I just made it up) of Facebook, Instagram, and Twitter are gradually becoming less impactful performance channels.

AI controlled experiences.

The latest disruption to performance marketing is the injection of AI into everything. Early glimpses of this impact were starting to show through in Google search with the Snippets feature that pulled content from websites to display in Google search without needing to click to view the website.

This experience has been named “Zero-Click Content” to describe the experience of being the recognizable brand associated with the most thoughtful information on related search topics.
AI will compound this approach and make Snippets look like child’s play. Now, Google will not only show information from website’s within search, but also it’ll compile information gathered from multiple high ranking sites and formulate its own answer to display with citations to the contributing sites.

This is a huge shot to the heart of performance marketing, where in the past, ranking for simple keywords would earn website traffic that would convert in 1-2 steps. Soon, quality of content, accuracy and proximity to the searcher will all contribute to even earning a citation to an AI answer. Simple keyword rankings will be buried deep down the first page.

Get back to basics.

These are just a few examples of the slow demise of performance marketing, which as of June 2023, I won’t declare dead just yet, but it certainly looks as if it’s on its deathbed.

Breaking out of the performance marketing mindset is not going to be easy. It’s not easy giving up the silver bullets we’ve become used to over the last 10-15 years.

Moving forward, marketers and business owners strategizing marketing initiatives and allocating budgets to marketing need to consider that shortcuts are becoming harder to take and the only way to work past that is to return to basics.

Utilize multiple channels. Don’t make every channel a “conversion” channel. Ramp up your brand building content initiatives. Beef up communications with your existing customers through social media and email. Track progress as a whole across all channels with weighted sub-goals for exposure, engagement, and sales for each.

Simply put, don’t expect to take shortcuts moving forward or rely on one high-performance channel as a silver bullet. Successful brands will need to put in the work, applied more broadly across multiple channels, and be able to connect the analytical dots of success with logic.