The consumer is the driving force behind performance marketing - a more forensic examination of the customer journey has enabled many brands and marketers to bypass guesswork on their way to establishing the true role of results-focused channels like affiliate.
That said, the industry still suffers widely from a reluctance to reevaluate outdated ideas around the consumer, say Tradedoubler's CEO Matthias Stadelmeyer and vice president of product management Jeff Johnston.
Ahead of the their session at PMI London which aims to 'bust the myths' around performance, we caught up with the pair to find out how the industry should be applying hard, data-led consumer insight.
Let’s start basic: Consumer insight, how significant a role does it play in performance marketing?
Matthias Stadelmeyer: There are many myths and misconceptions around performance marketing that inform business decisions and budget allocations. The insights being used by marketers aren’t always wrong, often they are simply outdated. This is because customers’ online behaviour is constantly changing — as a result of things like technology advancements and the adoption of new devices and channels by consumers — our research shows that smartphones are rivalling tablets for researching and purchasing products and services online. Half (47%) of all consumers use their smartphone as a key tool to research purchases and compare prices wherever and whenever they choose. For the digital marketer, real-time insights are essential to optimise marketing spend, so they can allocate budget to the right channels and target the right devices at the right time, to increase conversions.
The pace of change means consumer buying behaviour insights are essential. However, understanding these insights and translating them into actionable strategies is the hard part. With so many technologies, channels and a myriad of data, making sense of these insights can be overwhelming for many. The marketers that succeed are the ones that can make sense of data, create meaningful insights and harness them to optimise their digital marketing activities.
Why is it that so many companies are not equipped with this ‘panoptical’ view of their customers? Does it come down to a lag in tech, strategy awareness?
MS: The digital landscape has been developing and fragmenting rapidly, with the number of marketing tech companies more than doubling within a year, it is hard for marketers to keep pace with technology advancements and ensure they are using the right solutions to optimise their digital spend. In addition, the digital eco-system creates millions and millions of rows of data, pulled from a variety of channels with different business models and metrics, making a holistic approach to data analysis challenging. In many cases, as a result of the amount of data crunching required, even when marketers have data insights, deciphering them often leads to analysis paralysis. In fact, according to The Economist Intelligence Unit, one in three (37%) consumer brands don’t know how to use data collected from online sales to inform a targeted strategy. Actionable insights into customers’ online purchase journeys across all channels in the digital ecosystem from a single source is the performance marketer’s holy-grail. This online user journey data can give marketers high level and in-depth insights into the roles that different platforms, channels, business models and publishers play in influencing purchase decisions. These patterns in behaviour can be used to tailor the channel mix and personalise digital ads to deliver targeted advertising — omnichannel personalisation.
We’re living in a data-flooded age; are companies being swept away with the amount of potential information available?
Jeff Johnston: Many companies are overwhelmed by the amount of information they are able to capture, or unsure how to harness the information available to them in order to derive value from it. Marketers are struggling to figure out which elements of their campaigns are successful and which are not. They don’t know where a customer will be when they are ready to buy, and what the offer is that will convince them and secure the sale. As a result, opportunities are being missed, advertising budgets are being diluted and revenues are being lost.
How should companies go about turning consumer insight into traffic that’s not just increased, but higher quality?
JJ: Marketers need a clear path to their customers and the opportunity to serve them contextually relevant ads, across multiple digital channels and devices at the point at which they are ready to buy. To do this the industry requires integration and better use of data. Technologies, programmatic ad buying platforms and exchanges, performance marketing engines, retargeting and search optimisation need to be connected within a single platform that can accommodate every business model, traffic source, format, device, channel, customer and supplier. The integration of platforms enables marketers to better target consumers, rather than adopting a blanket approach, the right business intelligence tool will deliver greater understanding of existing and potential customers’ online buying behaviours. This type of approach, based on data-driven insights, allows marketers to produce relevant, personalised targeting that delivers smarter results.
Your session at PMI London promises to bust some myths around performance. Can you touch on a few of these?
MS: There are many myths surrounding certain types of website, such as cashback and voucher codes (including that they eat the last click), but our data debunks many of the common performance marketing assumptions and looks at how these differ between markets and verticals. We will also challenge common beliefs, such as ‘affiliate marketing loses sales at the weekend’, ‘smartphones are good for impulse buys’ and ‘vouchers convert dithering consumers’. Marketers need to understand where their sales are originating and the types of website that are driving intent to buy, in order to optimise their digital marketing activities. User Journey data is the key to unlocking the industry’s full potential.
Without giving too much away, what do you think the audience are going to be talking about after Tradedoubler’s session?
JJ: I expect many people in the audience will be surprised by the online buying behaviour data insights we present. I am also sure that a high percentage of them will think their brand bucks the trend. We often present user journey insights to clients who are adamant their customers follow certain purchase journeys, despite our network data suggesting a different trend, it’s not until we show them the insights from their own data that they believe it. At this point it becomes obvious that there are huge opportunities to optimise their online sales channels and increase revenues. These insights are game changing and no doubt the audience will be talking about their own customers’ online purchase journeys, wondering if they are the exception to the rule.