The Netherlands may not be the first choice for American performance marketing companies seeking pastures new, but that doesn't mean it isn't ripe for opportunity. Senior vice president of media services at MediaWhiz, Peter Klein, and Matomy Media Group's regional manager of northern Europe, Ilja de Boer , chat to PerformanceIN.com about the key differences between these two markets.
What legislation is there in the Netherlands and the US that advertisers and publishers should be aware of?
Ilja de Boer: Our laws are generally the same as most of the European Union, where privacy policies and use of user information are big issues. There hasn’t been much enforcement of the Cookie Directive although the pressure is still strong to legislate.
Peter Klein: There is a lot of legislation in the United States that performance marketers must monitor, especially in the education and subprime verticals. Additionally, the Federal Trade Commission recently updated its “Dot Com Disclosure” guidelines, which govern online advertising and marketing practices in the United States, to further protect consumers. Disclosures, therefore, on affiliate marketing offers for both desktop and mobile will have to be more transparent.
What are the big publisher types in the Netherlands and the US?
IdB: As a CPL network, our publishers are divided: Facebook, mail, display are used for our non-incent campaigns. Virtual Currency (VC) and content blocking are making good income for our sweepstake and some mobile content campaigns. We do see a trend of non-incent campaigns that want to use the huge potential of traffic that can be generated by VC and content-blocking. We try to advice our advertisers and publishers in how to exploit this, for example with real time checks build in to the campaigns.
PK: In the US, the market is dominated by email, display and organic sites (SEO) with high page rankings. Additionally, incentivized traffic has been a steady source of reaching new consumers, though of lower quality. Within the next two years, I anticipate mobile campaigns to be a significant channel for performance marketing, as it has already begun to take off.
What advertisers are really innovating in the space?
IdB: In NL, any vertical that translates well into Mobile is ahead in the game. Shopping Clubs and Mobile Content and Dating are verticals that are adding app versions of their websites, wanting to promote installs, which gives publishers other options. There are huge revenue opportunities for mobile publishers here.
PK: Honestly, I don’t think advertisers have innovated the space much at all. It’s the aggregators and publishers that drive the technological and marketing growth. Whether it is portals with decision or ping trees for verticals, such as education, payday or auto insurance; jump pages to further qualify consumers; or navigating new marketing channels in social and mobile, the advertisers seek the help of publishers and aggregators to help scale their marketing efforts.
How saturated is the market?
IdB: Advertisers are creating their own networks and Publishers who used to work with bigger networks are creating their own CPL networks. But we don’t see it as a threat. We take responsibility for both sides, and provide the cash flow to keep the traffic coming and get the ROI the advertisers want.
PK: The US affiliate marketing industry is quite saturated, which makes for solid competition and technology innovations, such as real time bidding (RTB), predictive modeling and landing-page optimization to squeeze every penny of profit. There is always room for more traffic and new verticals, but we predict a significant shift in the coming months toward mobile affiliate marketing campaigns and mobile lead gen.
What trends are you noticing?
IdB: In the last few years we’ve noticed trends in the top revenue earning verticals. We saw the rise of daily deals two years ago, then shopping clubs. On the publisher side we see more and more RTB companies moving towards the CPA model. Which creates opportunities for working together but on the other hand they are now after the same budgets as we are.
PK: Some trends we see in the US are a strong focus on mobile marketing and mobile lead gen, lead monitoring and compliance technology. Retaining strong brand equity and reputation is paramount to bringing more into the space. Additionally, developing organic sites to obtain traffic and owning your own data have become more critical.
What's the take-up of mobile like?
IdB: The segmentation of WAP, wifi, 3G has changed things for advertisers.
In NL, there are not a lot of opportunities for mobile billing campaigns because most traffic is from wifi connections. But here are also big changes for those types of advertisers. Besides this mobile is the future, looking at the consumer use of mobile vs desktop. It creates new opportunities both on advertiser side as publisher side, that’s why we also created our dedicated mobile affiliate tools and reporting within Matomy.
PK: Mobile affiliate marketing is still in its infancy, led by the low-hanging segment of games and entertainment display advertising and app downloads. More mobile companies have been popping up and partnering with traditional lead-gen companies, as their technology expertise is a significant value-add. Advertisers are slower on the uptake but they are seeing 30%-40% of views coming from mobile devices organically, so it is a matter of time before they continue to build out sites appropriately.
Are certain verticals dominating more than others?
IdB: Shopping clubs, mobile content and dating continue to be strong. Verticals where the lead-to-sale time is short will provide advertisers with quick ROI, and they are encouraged to keep budgets open which is great for affiliates. One of the worst things for affiliates, specifically Facebook or media buying affiliates, is to stop promoting a campaign just as they find their own “sweet spot”.
PK: I continue to see a lot of money being made in education, finance, games and entertainment and health and beauty. Also, anything with a brand name continues to be successful.
How has the Netherlands been coping with wider EU legislation such as the E-Privacy Directive?
IdB: Over a year ago the law was put into place. According to Truste, about 32% of websites have actually complied, and despite strict regulations there is no enforcement by Dutch parliament. You might be able to draw a parallel to our governmental and cultural attitude towards soft drugs. Even with this ambiguity, the E-Privacy Directive has adversely affected advertising budgets. Interestingly, in 2012, the Netherlands had the most consumer awareness of what internet cookies are and the least amount of concern, (compared to Germany, France, and Great Britain).
PK: I think it has become tougher and tougher, but we are an innovative group that continues to drive forward. The lack of self-regulation continues to hurt us when bad apples spoil it for the bunch. In many cases it has also led to consolidation of companies to complement strengths, broader coverage and risk mitigation – strength in numbers.