What is the biggest difference in performance marketing between the UK and US, and why?

Jeff McCollum: The U.S. market being so much larger in size provides a lot of opportunity for innovation but also can contribute to potential problems.

With the increasingly growing size of the US market, and very limited performance-based regulation in place, the process for affiliates to launch their programs overnight has been simplified. As a result we are seeing a growing trend of these “overnight marketers” pushing the boundaries when it comes to fraudulent online behavior and minimal compliance with regards to ethical tracking measures. With this comes the adoption of anti-fraud measures, which we are seeing, come into play within the last two years. What the U.S. has learned and adopted has helped educate the UK enabling them to avoid many of the hardships we have seen within the affiliate space.

Paul Wright: The sheer volume of networks and publishers in the US compared to the UK is for me the largest distinguishing factor between markets, largely because this has in turn fostered different eco systems in which performance marketing has been allowed to evolve. The resulting practices therefore can differ significantly as does, perhaps more importantly, the regulation of them. With more regulatory bodies in place within the UK, I feel performance-based marketers undergo a much higher level of scrutiny and tend not to get lost amidst the shuffle of the larger networks, especially where there is a recognised level of inter-network cooperation. Here in the UK I feel the lines of communication have been opened up between all parties thus standardising basic marketing principles across the board and encouraging greater adherence to these ethics.

JM: Another difference we are noticing is the maturity of the mobile market within the UK. The opportunity to target and track mobile for enterprise clients is increasingly expanding, however the tools available to these UK marketers do not match the market maturity. Thus we are seeing a growing trend of UK companies adopting US tracking platforms to effectively take advantage of the largest growing sector of performance-based marketing, mobile. Due to the previously mentioned tribulations of the US, the tracking tools that have been built are much more robust and developed in terms of providing a greater level of transparency into traffic sources, and more proactive with gaining better insight into your traffic.

How competitive is performance marketing in the country you’re operating in?

JM: Considering the size of the US market once again, the performance-based marketing niche is extremely competitive. The number of online marketers continue to increase within the US and with this upward trend comes much more innovation which is ultimately increasing the competition. As a result we are seeing a lot of consolidation of the smaller affiliates and even the larger networks like Global Wide/Neverblue, Matomy/MediaWhiz, and others.

PW: Where the affiliate scene in the UK was once an opportunists dream due to the low level of understanding and misconception that the channel is complicated, what we are faced with today is a completely different attitude. It’s rare to find a major brand or SME that is not operating some kind of performance activity whilst publishers have continued to outsmart each other by pushing the boundaries as emerging platforms present unique traffic source opportunities.

In recent and tough economic times we have seen Agencies (I-Level), Networks (DGM) and many high street brands (too many to mention) go bust where they have not kept up with the competition. It’s a very competitive space now but those who can squeeze performance from the data and evolve their platforms are pushing ahead relentlessly

Where are the largest opportunities for growth in your country?

PW: It all comes down to taking the current ecosystem we have now and making it more effective. Looking at the recent IAB/PwC OPM report and yearly growth trends, you can clearly see we are maturing as a channel within the UK.

For the agencies who have fully embraced the channel, who represent multiple clients and have worked with all the networks and own proprietary systems it’s about leveraging the data in a unified manner which will give them a comprehensive and competitive advantage. Our own CAKE platform is a great example of how they can achieve this. A single, flexible, unified dashboard, full API access, providing greater insights into their cross network and in house performance channels. For networks and advertisers we enable them to be more efficient, cut costs and continue to provide an innovative approach to their performance marketing activities. We’re in a unique position to enable brands, publishers and agencies to work together with all networks under one view.

JM: Recently StatCounter Global Stats published that the global mobile traffic has grown to 13% of total internet traffic, and that is up from 4% two years ago. This is the area many companies are not optimizing or taking advantage. Mobile traffic provides so many data points (location, language, device, carrier, etc.) marketers need to target and track the effectiveness of their campaigns in much more detail. By leveraging the tools and data available marketers can increase their revenue and optimize their digital spend.

How happy are you with industry regulation?

JM: Within the US, the foundation for industry regulation has been laid, but it is still nascent in its level of standardization. If we look at how tracking is done across the board there are certainly many loopholes for fraud, tracking discrepancies and basic ethics surrounding things such as what pixel to use when and where for the most accuracy. This is not a reflection of the software available but more so how people are using or even abusing the software. I strongly feel that the standardization starts with the Advertisers. If we can get them to enforce a system of coherent tracking used across the board then I think we are well on the way to revolutionizing the performance-based marketing space. It is a fine line we need to walk with standardizing basic principles without affecting the integrity of the performance-based marketing space or stifling innovation. In the meantime, I would like to see more regulation and some sort of best practice guide enforced among all online marketers.

PW: I’m a huge fan of what the IAB, the AMC and collective individuals have done to push forward with industry regulation here in the UK. To look back to where we were just a few years ago and where we are today I’m not surprised at all that confidence within the channel has risen and annual spend is now a reported £9bn. There’s still a lot that can be done but I’m happy with the quality and direction things are going.

What improvements could be made to regulation?

PW: Similar to Jeff, I strongly feel that if the regulatory bodies established a level of tracking standardisation implemented across all networks, advertisers and publishers it would eliminate the potential for tracking discrepancies, decrease fraud and open up the lines of communication for all parties involved. It really starts with the regulatory bodies, then trickles down to the advertisers who have the ultimate control over the finer details over who, where and when their brand is promoted.

How professional do you think performance marketing is now and how much further does it have to go?

JM: This relates back to question number 1 about the biggest difference of performance-based marketing in the US and UK. Within the US we are seeing a maturation of the market. We are making further strides to become more advanced, and innovative all because we have gone through the learning curves. With these advancements we are attracting enterprise brands to the performance-based space thus cultivating a new level of professionalism and recognition. The UK has adopted the US ways and ultimately bypassed the learning curve and gone from a brand new market to an extremely mature market overnight, but is still in the process of adopting the proper technology tools to match this maturation.

PW: In the UK there’s no doubt we’ve come a long way in a short space of time. Have we benefitted from experiences already witnessed in the US and avoided potential pitfalls in the UK? Of course! With a strong understanding of the market trends and future of performance-based advertising, the founders of CAKE built a platform to provide a solution for the US’s shortcomings in the tracking and analytics space. Here in the UK we understand that even though we have made it through many of the pitfalls of performance-based marketing, it does not mean there won’t be more along the way or that previous ones will resurface again. With that in mind, CAKE has strategically been built to address both past and future predicaments that will arise with this marketing sector. It is a market agnostic solution for tracking and analytics built to address past, present and future trends.