Planning Ahead For the Performance Plateau

By Scott Paternoster, CEO, Chief Media

Performance marketers never rest, always looking to maintain – if not improve – the ROI on their campaigns. In a perfect world, performance marketers would simply invest more and more with the channel that drives the most conversions.

Unfortunately, most marketers know this isn’t possible, and they all share a common fear: the plateau. Even the best, most cost-efficient channels will hit a point where performance levels off. The target audience has become saturated and marketers will hit a point of diminishing returns, where the dollars they invest aren’t adding incremental increases in performance.

Performance advertisers need not fret. Everyone faces the possibility of the plateau, but with more media channels than ever, there is greater opportunity to expand the total addressable market and maintain growth.

Disperse the budget

Most performance marketers follow the same playbook, because it’s worked for years. They invest heavily in lower funnel targeting tactics. Meta has emerged as a performance marketing favorite, thanks to the ability to deliver engaging, well targeted ads on Facebook and Instagram. When brands hit the plateau, the impulse is to increase their spend on Meta or Google, or to find some other similar digital channel.

For most marketers, the best move is to actually disperse their budget rather than stay in one lane. While that may seem obvious, here’s the catch: brands that primarily do digital sales should be investing in offline media channels.

Some brands may pause here and think, we’re doing great in digital, why change course? It’s about incremental gains. Channels like out-of-home and linear TV can boost awareness and ultimately drive more conversions, even if those conversions eventually happen online.

Think higher in the funnel

This goes hand in hand with exploring other channels. Yes, Meta and other digital tools allow for easy conversions, but investing higher up in the funnel helps brands reach even more potential customers. Branding campaigns can run across the offline channels named above, as well as on streaming and other CTV opportunities.

This increases overall reach, which should have a positive impact on overall performance. In many cases, moving 20% of your budget to top-of-funnel channels should impact overall  revenue growth in the range of 10 to 30 percent, depending on the campaign.

Focus on measurement

With all of the available channels for reaching consumers, balancing a budget for maximum performance is a science. After brands diversify their spend, the primary goal is to determine which channels give the most incrementality. This can be accomplished by working closely with their agency or another platform on the optimal media mix model.

Remember the goal

Ideally, performance advertisers are always in a space of testing and revising their media plans as they look for the best spot to invest. Media mix models are never set in stone, and are designed to be optimized and updated

The most important thing for any performance advertiser to remember is that they are not trying to replicate the past, but are instead trying to deliver the most traffic and performance right now.

While digital channels have long produced the lowest, most-cost effective acquisition prices, these platforms are only so large. Eventually they will get tapped out. Brands can still shift their plans after they reach this plateau, but smarter advertisers will take the steps well in advance to ensure that they maintain an optimum media mix and keep growing.