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Overseas Reaction to IAB OPM Report
Image Credit  Shuji Moriwaki Creative Commons license

Overseas Reaction to IAB OPM Report

With the proof in the pudding that the online performance marketing industry in the UK is booming, PeformanceIN turned to industry folk across the pond to get their thoughts on the recent IAB report.

For those that missed it, the Internet Advertising Bureau (IAB) commissioned PricewaterhouseCoopers (PwC) to carry out a survey on the value and growth of the channel in the UK.

The results found that affiliate marketing and lead generation ad spend in the UK hit £1 billion in 2013 and this generated a healthy £14 billion in sales.

With an ROI of 14:1, it is no wonder our overseas comrades in the US and Canada are screaming for a report of their own.

Great study, but what is missing?

CEO and founder of Canadian-headquartered All Inclusive Marketing, Sarah Bundy, said that having quantitative reports that represent the performance marketing industry in Canada and the US as a whole, would be hugely beneficial for every vertical of performance marketing.

“Currently there is limited information available to advertisers and to the industry so it's extremely challenging to benchmark progress against others in the market,” Bundy begins.

She said the Performance Marketing Association (PMA) is making efforts and strides in gathering some of this information, however with limited funding and a company fuelled entirely by volunteers, the efforts are slower than desired.

“The challenge with results from those who are willing to share those numbers is the incredible array of company sizes, budgets, reach and overall performance, thus an apples-to-apples comparison with a large enough sample size is another challenge we need to overcome,” Bundy explained.

“Further, there are other areas of performance marketing that have a huge weight in the US and Canada, that of the effort of bloggers, content writers and social affiliates. It is interesting to see none of these affiliate types mentioned on the list of influencers in the UK because they are hugely important in the US and Canada.”

More resource and power needed

Bundy said she believe the US and Canadian marketplaces need a governing body with enough resources and power to get accurate measurements and results from multiple brands, in multiple niche groups, managed by multiple tracking platforms in order to fully understand the true value of this channel.

“We have a start, but it's not yet enough to fully understand the true value of our worth,” she said.

The PMA does what it can, but the industry as a whole, specifically the networks, third party tracking platforms and advertisers themselves, need to be willing and able to share more information to make any surveys and results realistic and meaningful.

New York-based director of marketing and communications at Matomy US, Keith Trivitt, said reports like the UK IAB's OPM study provide a ‘tremendous benefit’ to the US performance marketing industry – particularly as performance-based advertising is one of the fastest-growing sectors of online advertising.

“What is desperately needed in the US is a similar report showing the value that performance marketing brings to advertisers and publishers,” Trivitt begins.

“There is currently not a similar comprehensive report of the scope and influence of the US performance marketing industry and this makes it a challenge to help marketers, advertisers and publishers fully understand the benefits and impact performance marketing can have on their business.”

A lack of broad understanding

Trivitt said the study of the UK online performance marketing industry is instructive for US marketers in several ways. He said recognising that UK advertisers spent £1 billion in 2013 on performance marketing services, generating £14 billion in sales, provides a solid baseline for performance marketers to use in generating additional new and incremental business opportunities with clients.

He said it also firmly establishes the ‘proper role and value’ of online performance marketing and makes it clear that there are a variety of industries that benefit from performance marketing services (e.g. finance, travel, insurance, etc).

“For an industry as robust as it is, OPM often suffers from a lack of broad understanding by advertisers and publishers of how it can benefit their business,” Trivitt added.

“After more than a decade of rapid growth, online performance marketing has matured to a point where it is a recognised marketing channel and increasingly comprises a larger percentage of advertisers’ online marketing budgets.”

When questioned about a US report being done in the same fashion, Trivitt said this idea has even been mooted by Matomy itself.

“The challenge with developing a report of this nature in the US is the sheer size of the market here, as well as the relative fragmentation in terms of where consumers interact with brands and the types of media that are available,” he begins.

“We would welcome the opportunity to partner with our industry colleagues, including the IAB and the Performance Marketing Association, on producing such a report for the US market.”

Trivitt said within the IAB's report, he would also like to see a more detailed focus on the growth of various media channels within performance marketing, especially mobile, social and video.

Vice president of analytics at Commission Junction, Heather Pilat said report’s like the IAB’s OPM study do a great job of stressing the importance of the channel.

“We applaud reports like this one from the IAB because they confirm our client data on the tremendous power of the affiliate channel in driving incremental growth and delivering results for thousands of companies every day, both in the UK and here in the US,” Pilat said.

More room for growth

Senior marketing manager at Rakuten LinkShare US, Lisa Mollura, said she too would like to see in-depth coverage on the market segments and regions that are seeing the most growth in affiliate marketing.

“While the OPM study is focused on the UK, it underscores the fact that affiliate marketing is seeing strong growth throughout the world,” Mollura said.

Upon reviewing the OPM report, CEO of AffiliateTraction, Greg Shepard, said within the retail sector it comes as no surprise that e-commerce is growing much more rapidly that in-store year-on-year sales.

“Retailers are responding by using the affiliate channel to build incremental sales,” Shepard said.

“However, it’s becoming increasingly more complicated whether to attribute sales to online or offline, as consumers are using both channels interchangeably.

“While the lines are blurring, one thing is clear – sales in the affiliate channel are outpacing all other forms of commerce. This is even the case in the US where the affiliate channel is the most mature in the world.

“Therefore, while online performance marketing has generated £14 billion in sales, there is still more room for future growth in all markets, including the US.”

Canadian market is ripe

On the subject of the affiliate industry in Canada, Shepard said with Canadian marketing professionals now more knowledgeable and educated about the value of affiliate marketing and the incremental growth it will bring their organisation, the trend of Canadian retailers implementing new affiliate programmes is becoming an everyday occurrence.

He said in the Canadian market, e-commerce has experienced rapid growth over the last two years and this is forecast to continue.

Vancouver-headquartered Bundy concluded: “As a member of the Industry Advancement Council of the PMA, I encourage and call all advertisers, networks, agencies and affiliates alike to get involved in the PMA and participate in polls and studies,  (like the OPM study), for the betterment of the performance marketing industry in North America.”

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Pippa Chambers

Pippa Chambers

Freelance News Journalist at PerformanceIN - working to source the latest and breaking news in performance marketing. 

From newspapers to national B2B magazines and technology reporting, I have covered a variety of genres. NCTJ/NCE qualified.

Please email me at pippa.chambers@performancein.com and follow me @PippaC1

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