Earlier this month the UK IAB released its latest digital adspend study, which put total expenditure across 2012 for display at £1.3 billion. The lofty total is more than one and a half times that of performance marketing spend in the UK, but why?
To answer that question, we thought it best to speak to several display companies and discover what the channel is doing differently to performance marketing and how it is securing so much more advertiser budget.
Programmatic display provider, Sociomantic Labs, is one of many champions to this new approach to the channel. UK director, Mathew Downs feels display’s advantage comes from its use of data to drive incremental sales.
“Display is one of the only online channels (next to email) that enables advertisers to leverage existing data stores such as CRM, loyalty or revenue management data to personalise advertising down to a user level, creating ‘user-individual’ marketing plans at scale,” Downs said.
“Most importantly, they are spending more on display because it helps them drive incremental sales.”
Post-click Display is an Advertiser Favourite
Indeed, it is this use of data that now has display encroaching on other post-click channels, such as affiliate, which has always argued that it is responsible for incremental sales too through publishers geared towards cashback.
Pierre Naggar, managing director, EU, at Turn, a company responsible for monitoring multiple marketing channels through its analytics platform, thinks data and the real time insights it is capable of bringing has helped display reach to undertake more post-click work.
“Having the data related to the consumer journey and being able to utilise it for targeting purposes is the first challenge that marketers are faced with,” Naggar said.
“If you add that consumers are constantly on the move and interact with multiple devices, you realise that you need to be able to make decisions in milliseconds in order to deliver the right message to the right user at the right time,” Turn continues.
“The inability of delivering real time insights has driven post-click as the single measurement for many advertisers.”
Advertisers too are becoming aware of the benefits posed to them by post-click offerings, as their traditional display budgets are now being extended to cover performance, according to Adam Rubach, business development director at ad personalisation platform, Struq.
“We run various post click performance retargeting campaigns for large advertisers in which they measure on post click and work to strict ROI's, CPA, COS targets etc, but we also run new user brand/prospecting campaigns for clients, and this activity is typically sanctioned from a traditional display budget,” Rubach explained.
It may come as a surprise to some that most brands do now measure performance, as Rubach also revealed that even with brand activity they track either ROI, post-click performance or at the very least, engagement.
Cheapest is Still Best
Despite the growing take up of performance models in advertising, Rubach’s Struq colleague and chief operating officer (COO), Kate Lavender, thinks some advertisers will always try to sacrifice performance by simply opting for the cheapest inventory.
“Advertisers have a complex web of requirements from brand awareness to sales and CPA type models are too one dimensional with suppliers motivated to find the cheapest inventory that delivers performance but that doesn’t necessarily delivery to the broader suite of objectives,” Lavender said.
Mendel Senf, CEO of performance display company, YD, is of the opinion that attribution is the end game, however the internal silos that remain across marketing departments at advertisers prevent better utilisation of data too.
“The reason why this metric [post-view] and data is still being ignored is that the sales and marketing/CRM budgets online are still separated in many companies,”
“As soon as these budgets are spent over the same user data, the use of post-view conversions alongside a attribution model will be accepted.”
CPC is too Easy
Struq COO, Lavender, also says that simplicity is to blame for the click payment metric’s dominance and that attribution is the only way this will ever change, but even this is still some way off yet.
“Other Attribution models are still nascent and costly, which makes it easier to stick with a straight PC model. This will shift as the ‘attribution market’ becomes standardised, and more reliable,” Lavender predicted.
“Right now the only people who seem to really be using this is the big companies and even there the models are flawed"
Downs was in agreement with Lavender, saying that a significant amount of marketers were all too aware that the attribution model they were working with perhaps was not the best, yet an implementing an alternative could be costly.
Time was another factor, which, according to Downs, could dissuade advertisers, but if enough testing could be undertaken to find the right model, he felt attribution based on variable credit could work.
“The most intelligent attribution models enable advertisers to assign variable ‘credit’ to the different touch points according to where they fall in relation to final desired action, but getting that weighting model right takes a lot of testing,” Downs said.
“Even if the results can be misleading, the click is often still the easiest way for marketers to make sense of their spend.”