We dig a little deeper into how performance marketing is making waves in the Netherlands by speaking to several of the nation’s top agencies. They talk about the country’s performance landscape, frustrations, innovations and their best campaigns.
Niki van Wijk, Netsociety strategy director and partner, managing partner at FairEtail, Dennis Kenis and business development manager at 77agency, Lorenzo Pireddu, all have their say on performance marketing in their country of residence.
How Would you Summarise the Performance Marketing Agency Landscape in the Netherlands?
Niki van Wijk: Performance agencies are mostly independent small to medium sized agencies. In some cases they have organised themselves in an (international) network or are part of a digital group.
Traditional media agencies have set up performance departments of brands, however, except for a few these agencies, they do not serve large (digital) customers for performance marketing.
Dennis Kenis: Performance marketing agencies in the Netherlands can roughly be categorised into four groups:
Big generic (online) media agencies that have started a “performance department” or founded a separate company for performance marketing, SEA agencies that have branched out into other performance marketing activities, such as affiliate management and real-time bidding.
Specialised performance marketing agencies, like FairEtail, or finally, web development companies that offer online (performance) marketing activities as an addition to building (e-commerce) websites
Lorenzo Pireddu: The landscape is changing rapidly from a market with several independent affiliation and ad networks to a more concentrated market with some local players teaming up (i.e. Zanox & M4N) and some big players offering huge inventory raising (i.e. Google's InviteMedia). Social networks are also jumping into the boat, making the future far from obvious.
If you Were to Hold One Shining Example of Performance Marketing in the Netherlands up to a Client, What Would it be and Why?
NvW: The key question would be what the criteria are for a shining example? I guess we all have become really good at optimising several digital performance channels, however as we do not take an integrated approach, this usually results in sub-optimisation. But that is another discussion.
There is no specific case I can come up with, but what we do as an agency is to correlate product availability and pricing to advertising, and preferably specific target groups. Digital allows us to target consumers with the right message in their journey, so increasing the relevance of communication, whilst reducing cost. This is a true win-win.
DK: We have redesigned Weight Watchers’ whole affiliate and direct partners strategy from scratch, using a multitude of affiliate networks and types of affiliates, and applying various remuneration models to create the ideal mix. By doing so and by carefully looking at the lifetime value of customers per affiliate type, we were able to find the right balance between volume and quality of the leads we deliver.
In this case, the key to success was not so much in the innovativeness, but rather in the meticulous approach from daily management over tracking to the business model, which requires a very exhaustive knowledge of the affiliate marketing scene.
LP: I'd say Bol.com for the innovative approach they have to performance (developing a very comprehensive API, investing in social networks and creating specialised "mini-shops".
Are Certain Verticals More Knowledgeable About Performance Marketing in the Country Than Others?
NvW: Assuming you mean by verticals, vertical media channels. Yes, simply because they exist longer, are more straight forward than others and have the significant media spend. Paid search being the biggest, followed by e-mail marketing, affiliate marketing, display, SEO and then social
If you mean industries, I would say pure players head the understanding of performance marketing, followed by travel, then finance. Retail is improving its knowledge fast though, as several companies are investing heavily.
DK: In general terms we can say that the verticals that have adopted e-commerce and online marketing in an early stage are also the most knowledgeable about performance marketing. Furthermore and linked with this fact, we see that the most competitive sectors are also more advanced and knowledgeable about performance marketing.
Obviously there is also a relation between the nature of the products in a certain vertical and the knowledge about performance marketing. Within the automotive vertical for instance, there is less knowledge about performance marketing than within travel, or fashion, because their product is less suitable for (direct) online sales.
LP: In general, e-commerce clients, telcos and insurance providers
What Performance Industry Frustrations do you Have?
NvW: See above. Performance agencies tend to correlate results directly to media spend, which in many cases is incorrect as other factors (that are not always stable, take the weather in travel) determine the likeliness for someone to purchase a product or service. Performance agencies should start thinking more in a holistic approach, for exmaple taking. branding clearly into account.
On the other hand, many companies have split up responsibilities in branding, acquisition and retention, which results in a less integrated approach to communication.
DK: Performance marketing is quite often evaluated on a € 0,01 level disregarding visibility and indirect performance, whereas ATL communication isn’t, which makes it sometimes hard to prove performance. In an ideal situation the advertiser sees its performance agency as a strategic partner who is able to participate in the evaluation methodology, enabling true multi-channel performance management.
Great performance depends on multitude of factors, whereas the performance agency can only control a part of them, so our success also depends on our clients’ efforts.
The fact that the advertiser’s expectations in terms of volume versus acquisition cost are not in balance.
Specifically, for lead generation: the negative price/quality spiral that we have seen over the last few years. There is always a high demand for qualitative leads from advertisers, but we have seen many suppliers offering low quality leads at a very low cost. The problem is that the advertiser often only discovers the quality issue at a later stage, which initially makes it difficult for suppliers and agencies promoting high quality leads. This has led to a disturbed market.
LP: As an advertiser for our clients, difficulties with conversion attribution, fragmentation of the publishers and low transparency.
What Big Performance Marketing Innovations are you Seeing in the Netherlands?
NvW: Most innovations evolve around the capabilities to apply (customer) insights - usually from different data sources like analytics, CRM etc.- to advertising. This involves collecting high volumes of data, organising them in a correct matter and being able to digest it into something useful. The last part is the key challenge.
DK: Automated trading will keep emerging under impulse of data.
Mobile marketing will become an essential part of performance mix.
Multi-channel is the only future-proof model on the longer term and multi-channel/multi-device tracking will be the driver when it goes mainstream.
LP: Not just in the Nertherlands, but as a general trend we see Facebook coming up with very strong solutions to run performance campaigns (i.e. Facebook exchange, custom audiences, Conversion tracking etc.). As a general trend, we believe it will focus more and more on enabling advertisers to generate and properly track performance campaigns within their huge traffic inventory. Of course another very big innovation is mobile, where advertisers are still struggling to catch up with the right approach.
What Future Trends are you Advising Brands to Invest in or Risk Missing the Boat?
NvW: Mobile, localisation: it has been said many times already, but we can't start pointing them at new trends if we haven’t got the basics right. And mobile has become a basic for end-consumers, unfortunately not for many companies yet. Furthermore, I strongly advise to invest in a form of conversion attribution, not for digital only. Just start working on a model, create hypothesis and start testing them. Try to understand the bigger picture of how a consumer interacts with your brand. Avoid channel thinking.
DK: As consumers will spread their ‘online’ time over several devices and channels, they should make sure to be ready to take advantage. This asks for an appropriate strategy, technical infrastructure, resources and building up the expertise, which takes time and therefore the time is now!
LP: What I just said above, or more in general, making performance work on social networks. Another big trend on which advertisers still have to catch up is understanding Mobile conversions and optimise mobile conversions funnels.