#RoadTo2021: Performance Marketing trends for 2021

With brands expecting a higher ROI on their ad spends in these uncertain times, performance marketing has become a necessary mechanism, SVG Media's Deven Dharamdasani shares emerging trends marketing professionals should be equipped for.

Gaming and ed-tech have been the two most promising catalogues in India in 2020 that have garnered the highest investment. With gaming attracting more than $350 million of VC funding by about August 2020, giving way to opportunities for expansion and growth to the gaming companies. Sizeable investment calls for sizeable revenues by virtue of the investment dynamics.

By default, thus, brands that receive the investment are bound to be under the lens to perform. Investors or even those who have invested seed capital are eager on returns, looking at a 5X or 10X return on their investment.

The expected ROI from investors is bound to put a reverse prerogative on brands to perform, who in turn, are expected to bet a greater pie of spends on performance marketing as the altar to increase overall transactional value. Brand spends are expected to be justified via not just allocation of spends but via cost per acquisition of customer (CAC) and average revenue per user (ARPU).

2021 is expected to be a story not just about the cost per lead (CPL) or similar matrix; rather, the game-changer will be an incisive focus on the cost of acquisition (COA), a goal that would be achieved through data sciences. Brands will look at ways and means to accelerate their growth story by upscaling transactions in businesses.

Marketers will be smart enough to choose from a bouquet of performance media channels like biddable media, direct display media partnerships, strategic alliances, affiliates, influencers, and others. Performance channels must be measured beyond one month of retention and they should give indirect benefits to channels that build or increase their organic growth. Insights through data mining will aid the goal.

Spends would be a function of the timeliness of brands across the young-mature continuum. This may directly or indirectly be tied to the product life cycle stage (PLC stage) of the brand. Mature brands are expected to witness consistency in spends and their marketing strategies in 2021 will need to find innovative ways of expansion like reaching through social influencers or channels, creating a different communication strategy to reach out to their audience.

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Young brands, on the other hand, will see an upside on spends, primarily on performance, to justify and make the best ROIs on the seed capital or investment received. Performance and transaction will be the key result area.

Brands and their custodians are expected to go a step further in 2021. The question that brands are bound to pose is how performance would deliver their brand positioning. Data science will play a significant role in this. Data mining and insights are bound to grow more scientific and intelligent, giving a macro-micro perspective to brands.

An entire gamut of decision-making variable matrix is bound to emerge, right from handsets, markets, age, and more. The greater the sophistication of tools, the better the insights would be. Brands will utilize these insights to make further precise effective decisions.

The growth story of 2021 is expected to be the expansion of markets and user adoptions in Tier 2 and Tier 3 geos, an extension of 2020 - and definitely, one that would get deeper and richer.

Products such as real-time bidding (RTB) clubbed with data insights will communicate, for instance, whether display inventory attached to programmatic audience matching and channels such as say native and influencers are performing in specific geos through a particular language-driven creative.

Through RTB, we know precisely how display marketing works. We have been into the content business and we know how to communicate. The combined intelligence will help brands reach optimal ARPU and RAKE value. Brands will utilize such insights to increase their GMV, also called top line.

I am expecting performance marketing in 2021 to be sophisticated, advanced and scientific; based on tools and platforms that would give rich data to make non-intuitive, fact-based buying decisions. Businesses will focus largely on performance for aggressive revenues.

Markets will go deeper into the tiers as more and more coherent data emerge. Instead of a channel-first or even an omnichannel strategy, performance marketing in 2021 will be data-driven, open to new or alternate channels and platforms, but non-compromising on upscale in business and effective ROI.

This piece has been authored by Deven Dharamdasani, CEO, SVG Media.