When Pay-Per-Click stops working - that is to say, it stops returning month-on-month improvements - many marketers panic. Elite marketers adapt, pivot, and profit.
This article, which is the first of three in a series, explains what you need to know in order to beat the performance plateau.
Defining the Plateau
The marketing performance plateau describes what happens when your marketing strategies stagnate.
When you reach the plateau, all of your online marketing methods have been fully optimised and are yielding the same at best, but more likely diminishing results, regardless of whether you increase your marketing budget or not.
Many businesses will encounter this during the course of their evolution. You have grown from a company which generated business through networks and word of mouth to one which requires a marketing budget to communicate to a wider audience. Over time, you’ve managed to optimise your marketing activity to drive down your cost per acquisition (CPA) and achieve record profits, but now you’ve hit a wall, an invisible barrier which you can’t break through.
You’ve tried everything you can to grow your audience and revenue, you’ve tweaked your creatives, believing they were the problem, but that only increased the CPA, so you reverted to what they were when the campaigns were yielding the best results.
You reduced the budget, which only maintained the CPA whilst reducing the turnover. So then you increased the budget, only to see your CPA rise too.
In a last-ditch effort to try to see some improvement in your acquisition numbers, you experiment with new keywords (ones which are on the periphery of your niche) only to see your budget burn in wasted non-converting clicks.
That’s when you know that you’ve hit the performance plateau.
Data Which Supports This Observation
According to Magic Numbers 68% of performance marketers will hit a performance plateau within 3 years.
IPA Databank cited that once you hit a performance plateau, increasing performance spend by 20% will most likely yield a revenue uplift of only 2-5%.
78% of performance budgets target only active buyers. According to the 95:5 rule, active buyers only account for 5% of your potential audience (only 5% of your consumers are active at any given time, the other 95% aren’t ready to buy from you yet).
How Do You Deal With It?
The next and final articles in this series outline ways in which you can break through the plateau, including the role which video can play.
Article 2: How to Break Through the Marketing Performance Plateau
Article 3: Why Video Is The Best Performance Plateau Breaker
If any of this information sounds like your current position, drop us a line. We’d love to help you break through the plateau!