INside Performance Marketing
How Can the Industry Move up the Value Chain?
Image Credit  Håkan Dahlström Creative Commons license

How Can the Industry Move up the Value Chain?

The performance marketing industry has made great strides over the past few years. The latest online performance marketing study (OPM) from the IAB in conjunction with PWC is testament to this. This study highlights the value of the channel and states an impressive £14bn of sales revenue had been driven for advertisers in 2013. This figure is even more impressive when you consider the advertiser spend within the channel stood at £1bn – showing a return on investment of £14 for every £1 spent.

Despite the growth of the channel, there is still a considerable opportunity for the industry to move further up the value chain.

Simplify selling the channel

While the performance channel can be complex, the fundamentals remain simple. Advertisers are paying publishers for a desired action to take place on their site. Whether this is generating a sale or delivering a lead, the concept is relatively straightforward. When selling the industry into advertisers to gain an increased share of budgets, there is no need to over-complicate things.

Similarly, when speaking to publishers the concept should remain as simple as possible. There are a number of publishers that have been monetising their sites away from a CPA model that could potentially work within it. Technologies such as Skimlinks and VigLink have simplified the process for bloggers to work within the channel who may not have previously.

Education is needed for both advertisers and publishers around accessibility in order to gain a greater level of involvement. 

Data insights to dispel misconceptions

There are a number of misconceptions around the industry. With more investment, it is only natural for advertisers to place greater emphasis on challenging its performance. The question of incrementality is one that typically arises when assessing the value of the channel.

A significant amount of data is available to dispel common myths. For example, there is a misconception that there are a number of touch-points within each customer journey and incentivised traffic is “stealing” sales from other publishers/channels.

There is a significant amount of data available that provides evidence to the contrary. From a performance marketing perspective, networks have provided a number of case studies to show there is minimal overwriting across the network.

Although it will vary from sector to sector, we typically see 80%+ of sales only having one affiliate touch point. Where overwriting of cookies does occur, it is typically within the same promotional type. For example, this is more likely to be a consumer comparing offerings amongst cashback or price comparison sites rather than visiting a content site only to then transact through a cashback site.

Where advertisers have been prepared to share their own data, it has been possible to tie this into a wider cross channel piece. Again, the evidence suggests the channel is incremental and there is a high proportion of sales through publishers where they have been the sole touch point.

Cross-channel data has also helped to uncover the role publishers’ play earlier in the path to conversion. While typically considered as a conversion channel due to the last click payment model, there is also significant evidence publishers are providing value at an earlier stage of the customer journey. As well as being converters, we need to be better at showcasing the role publishers’ play in initiating sales.

While customer journey data focuses on presale elements and the touch points a customer has engaged with up to the point of making the purchase, post-sale data can also highlight the value of the channel.

While many advertisers focus on the customer journey, few take into account the post-sale metrics that demonstrate value. This can look at how often customers referred by each publisher are returning and how much they are spending over their lifetime to add another dimension of value to each publisher. The more value demonstrated, the more likely the industry is to move up the value chain.

Engagement at “C” level

As an industry we need to gain more C-level engagement. Studies such as the OPM from the IAB are a great start to get C-level management to sit up and take notice. With a considerable amount of spend going through the channel we are well placed to demonstrate our value.

Networks, agencies and publishers all have access to significant volumes of data and it is important for us to share our success stories. Case studies demonstrating the value of the channel can help drive the industry forward and showcase how performance marketing is an extremely important element of the online marketing mix.

Matt Swan

Matt Swan

As a Client Strategist at Digital Window Matt works with advertisers across both Affiliate Window and platforms. The role involves working closely with the account management and business development teams on delivering and optimising affiliate campaigns.

Matt also works on research projects both for individual clients and overall market trends. He has recently undertaken research into the mobile network sector and also investigating the growth of m-commerce within the affiliate channel.

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