How to Use Performance Marketing on Meta and Google to Scale Demand across all Channels

Whenever I mention that performance marketing on Google and Meta can be leveraged to generate demand in offline channels and online marketplaces at scale and that we have been doing it for years , it raises eyebrows

Often because people have a superficial understanding of performance marketing. If we take a step back and ask ourselves how marketing( be it brand/performance) helps in increasing sales, we find that there are only 3 ways

a)      Show your ads to your entire TG, a large percentage of whom are not in market today to buy the category. We do this to build awareness and brand associations so that whenever they are in market to buy the category, our brand either gets a trial ( in impulse/FMCG categories) or is part of the initial consideration set ( in evaluated categories)

b)      Show your ads to your TG who is currently in market to buy the category, but not aware/looking for your brand

c)      Show your ads to people who are already evaluating your brand/are your existing customers to drive more purchases

If the take the example of fans, there are around 75 lakh consumers who buy premium fans every year. But the number of people who can buy premium fans would be around 6-7 crore consumers

This is at a pan India level, but the same ratio will be true for all states. The number of people buying a category in a certain time period( month/quarter/year) will be a small % of the number of people who buys the category in their lifetime

Now classic brand marketing principles ( Byron Sharp anyone?) will always tell you to target your entire TG with your communication, with a certain reach and frequency. The problem is most smaller brands will never have the budgets to do it sustainably, while also trying to get their annual revenues

And on the other extreme, classic performance marketing( Pmax, ASC campaigns etc) will always focus on the lowest hanging fruits to drive sales from your D2C website. And because low hanging fruits get exhausted soon, you start seeing diminishing returns and you simply can’t scale your performance marketing campaigns. Also because the focus on performance campaigns is purely D2C sales, the kind of creatives that are often present are simply on the lines of “ Buy now, Buy at 60% discount”. These creatives naturally reach out to those who are most likely to buy your brand

Performance campaigns when they started and even today when they work really well focus on the middle segment. The people who are in market to buy the category, but not looking for your brand. This is where your performance campaigns bring in 100% incremental sales. But the more restrictions you put ( target ROAS, cost caps etc) and the more sale/discount creatives you use instead of benefit led creatives, you end up restricting your campaigns from reaching out to newer audiences who are in market but  less likely to convert compared to someone who is searching for your brand

If you want performance campaigns to generate demand on marketplaces as well as offline channels, you need to unshackle these campaigns a bit. But unshackling does not mean doing reach and frequency campaigns, or upper funnel click campaigns

One of my biggest learnings is

-          If you optimize campaigns for clicks, Google/Meta will show your ads to people who usually click on ads

-          If you optimize on video views, Google/Meta will show your ads to people who watch videos

So, when running these campaigns, never optimize for top funnel metrics. Optimize for bottom funnel metrics like sales from your website. If not sales, have one level above metric like Add to Cart. If not that, then have leads and optimize for Leads

And loosen the performance targets. If you need a ROAS of 3, be okay with a ROAS of 2 if you can scale.

And always use creatives that tell the product benefits and features. Keep refreshing the creatives regularly. Again these creatives will perform slightly worse from a ROAS perspective compared to discount creatives, but will create demand across channels

But how do you understand that whatever you are doing is bringing you results? Do a control and test group. Take a test market and do all of these. And see the difference in 3 months

Eg: You have 2 states Gujarat and Maharashtra. You have equal offline distribution in both states and now want to scale up demand in Gujarat. This is how I would go about it

I would run 1 simple campaign to start with. Would Run a CBO campaign on Meta Optimize at a campaign level, not at an adset level. Let the campaign decide which creative and audience works best.  Put 4-5 different ad creatives( not a discount creative) The ad-creatives could be

a)      Problem Solution Style Ads

b)      Feature/Benefit Led Ads

c)      Testimonials/UGC Style Ads

Create 3 different ad sets

-          One set targeting broad audience with age and gender and Gujarat geography

-          One set with interest targeting and Gujarat geography

-          One set could be Lookalike audience of previous customers from Gujarat

Duplicate the ads across all 3 sets

All optimized for purchase event on website. Set daily budget of 4x your AOV and run it for a week

If any ad is giving purchases and also giving ROAS > what you want, scale that ad. If no ad is giving purchase, change the creatives and repeat the same for 1 more cycle

If still not giving results, optimize for Add to Cart. And basis the results, scale that ad

If this does not scale at all, you can try Lead Gen Ads on in-market audience and integrate it with strong marketing automation

You can also try similar geography specific in-market audience for Google

And how do you measure if this is working?

The same way how you evaluate brand campaigns. Look at increase in branded searches from that geography, offline sales increase from that geography, % share change in the e-com marketplace sales, awareness metrics change in brand tracks etc

But if you are able to scale up the campaigns at a cost which is sustainable for you, there is no reason why it won’t work. Again it is not a substitute of large scale ATL campaigns which you need if you aspire to have 20% market share, but this strategy is something that can help you reach the scale when you can sustainably spend on ATL