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Performance Marketing Set to Move Further up the Value Chain in 2014
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Performance Marketing Set to Move Further up the Value Chain in 2014

The performance marketing industry in 2013 has been underpinned by the Online Performance Marketing Study conducted by PWC and the IAB, which valued the industry at £9 billion.

It showcased over 4,000 advertisers earning revenue through performance marketing and over 10,000 active publisher websites. To put this into perspective, the performance marketing industry contributes 7% of UK digital marketing spend and 6% of UK internet economy.

This study highlighted the significant change in the performance marketing landscape from 2007 to the present day where the industry has seen a disruption that includes third-party technology, in-house tracking solutions and tag management. Stakeholders are being forced to increase and diversify their offering as more advertisers increase their performance budget and knowledge of the sector.

The rise of social engines, retargeting and remarketing brands and purely mobile affiliates has led to significant changes in the customer journey. As a result the industry debate of relevant attribution models has been a key discussion point for 2013, albeit not a new one.

Next year will see the discussion continue as more advertisers look to reward publishers in different stages of the purchase funnel, resulting in the traditional CPA method becoming one of many ways to reward publishers

The future and beyond

Industry shift

In 2014, we will see the industry shift to increase its focus on driving long tail and content revenue. This will be coupled with new payment models that enable new waves of publishers to become successful as revenue drivers across the digital action areas of mobile and social commerce.

Offline sales will continue to grow

The emergence of new technologies that enable tracking and targeting of agile consumers, and importantly, their joint ventures with existing affiliate stakeholders, will enable offline sales to increase, ultimately minimising leakage.

Moving up the value chain

In order for the performance marketing industry to secure a larger percentage of the overall digital marketing spend the industry needs to focus less on itself and instead continue to educate c+ decision makers on the value of performance, enabling further investment into the channel.

Into the New Year we will see a new wave of niche publisher models that will, combined with buy in from the wider online community, support larger brands to drive further incremental return on investment and move performance further up the value chain. 

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Sarah Parsonage

Sarah Parsonage

Always passionate about the value and power behind the pay-on-performance model, Sarah Parsonage, managing director of PerformanceIN, has been immersed in marketing, sales and events for the best part of 10 years.

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