Research shows that brand messaging and upper funnel marketing directly drive 30% of paid search

Analytic Partners, the leader in commercial mix analytics, has released its latest ROI Genome Insight Report, “The Marketer’s Guide to Survive (Even Thrive) in 2023”, which offers guidance to marketers to prepare for shifting market conditions and capitalize on opportunities to optimize brand performance in 2023.

According to Analytic Partners’ analyses of hundreds of billions in marketing spend, 80% of the time brand messaging outperforms performance messaging, and dominates as the best long-term strategy to win over customers and their loyalty in a tumultuous era of high inflation, job insecurity, and economic volatility posing significant constraints to consumer spending. Thirty percent of paid search is driven by, and directly attributable to, brand and upper funnel marketing, while another 30-60% is driven by non-marketing factors such as seasonality, loyalty, or category trends.

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The analysis highlights that increasing marketing spend during economic downturns has yielded positive ROI growth in back-to-back years, and 17% growth in incremental sales for 63% of brands. If organizations are planning to reallocate marketing spend, the data indicates that a pivot from lower-funnel (i.e. pay-per-click, measured through conversions, or price cutting and discounts) to the ‘upper funnel’ marketing activities (i.e. video, social media, SEO) will build stronger emotional engagements with consumers and ultimately foster more loyalty, advocacy, and conversion. Overall, upper funnel tactics, while only 25% less effective in the short term versus lower funnel tactics, were found to be 60% more effective over the long term in all market conditions.

“As we enter a new year of economic uncertainty, consumers are feeling the pressure on their purchasing power, while marketing teams are facing increasing demands to reduce spend,” said Nancy Smith, President & CEO at Analytic Partners. “Yet, this decision to cut can incur a 15% loss of business for companies that reduce marketing budgets when their competitors do not. Achieving success in 2023 will require brands to channel resources toward marketing activities that emphasize brand marketing and measurement of omnichannel touchpoints that lead to long-term impact.”

In addition, the report offers insights on how to best develop marketing strategies to position your business to achieve its goals for 2023.

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For example:

• Cap performance marketing spends at no more than 50%, so that at least half goes to brand and other upper funnel marketing activities.
• Capitalize on the power of targeting – nearly 75% of sales generated by marketing come through media channels that enable a targeted approach.
• Take an omnichannel approach – spending on connected TV (CTV) has reaped a 30% stronger return on investment than other advertising spend.
• Invest in every customer touchpoint to track real-time data and make truly informed business decisions

For over two decades, Analytic Partners has collected vast quantities of marketing intelligence across more than 1000 brands, 50 countries, and hundreds of billions in spend across industries. ROI Genome presents that intelligence to help marketers understand the tactics, channels, and strategies that drive ROI and performance.