I recently spoke to a well-respected performance marketing publication about the rise and importance of programmatic media. The managing director felt an introduction from a media agency perspective would help the team understand how their affiliate market was coalescing with the rise of the programmatic world.

This started me thinking about the relationship between performance marketing channels, distribution/acquisition channels and the traditional marketing communication channels that spawned the industry. As I have written in a few other articles recently, programmatic media is simply the use of automated and curated technology to deliver and optimise media messages across a number of formats.

Originally, this was confined to digital formats but is now increasingly branching back into offline media management. The catalyst for programmatic media was the need to centralise campaign re-targeting, as agencies and networks sought to combat the growing number of companies looking to exploit re-targeting opportunities outside of the original network buys.

This led to a lot of cookie overlap and a reduction in efficiency which, in turn, became another opportunity for the first trading desks to tackle.

Marketing and acquisition channels

Following a lunch with Rubicon, the programmatic tech company, in Soho just before the performance publication meeting, I thought about the original growth of ‘performance’ channels within digital marketing. From their humble display, search and affiliate roots and loose alignment with marketing channels to their emergence as primary acquisition channels for a number of companies.

I thought about the businesses built purely on these channels and the speedy in-source of these skills into companies.  As the reliance on these performance channels grew, companies started to group ‘performance budgets’ outside of their ‘marketing budgets’ and began to use completely different measurement frameworks to gauge success.

Marketing channels were becoming acquisition channels. Google Analytics became the prevailing measure for quantifying audience behaviour, and sales became the over-riding criteria for optimisation. As a rope to potentially hang the performance industry, this analytical approach became increasingly disconnected from the consumer and, at the same time, increasingly short term in outlook. 

Although performance channels were growing exponentially, the gap between longer term traditional marketing communications planning (consumer centric in approach) and short term gain planning (action or sales based in approach) could not continue to increase without constraint and would at some point snap back together. The consumer after all was, and is, the steadfast rock in a sea of change and the currents were changing.

Consumer happiness, brand equity and publisher yield management

I began my talk with a note about the growth of programmatic, about its role in helping affiliates manage yield from their inventory and new touch points. I also spoke on the frustrations many publishers and affiliates feel about the varying yield optimisation technologies, as those supplier companies themselves constantly wax and wane in the marketing value chain.

I spoke about the recent publisher events I had attended, and misunderstanding over the investment required at the big media groups to prepare their companies for accessing the programmatic exchanges. I finished with a forward-facing view on the factors affecting our industry, and the drivers fuelling the industry heavy weights, as they look to monetise more content and establish a new type of native media opportunity in the market.

Even the recent acquisition of Whatsapp by Facebook, for an eye watering cost per user, was swiftly followed by a statement that Facebook are not looking to monetise WA using a traditional advertising model. There will need to be a happy medium as telco ARPU models are being pinched and monetising traditional channels will become challenging.

When asked to write this article, I thought it might be useful to summarise the key threads of performance media that might push this fragmented part of the industry back into its rightful place, as a favoured delegate at the market communications table.

1. Distribution

Performance was driven by distribution and new types of media opportunities during the gold rush of the internet. Google and other companies were looking to monetise the huge number of people interested in ‘finding things’, while affiliates and the new search management companies were interested in monetising these searches.

It was essentially a model connecting ‘searchers’ with ‘brands and companies’ selling specific products through intermediaries. The crescendo of complicated search technologies that developed, paved the way for programmatic media which was essentially the same technology, albeit a little broader, and subsequently transformed the display industry in the same way.

The difference was the cookie, which became the pivot for this technology, as it did not rely on a single identifiable source of traffic such as Google, MSN or Yahoo! Search but needed to incorporate the 50 billion monthly trading opportunities that lay behind display and programmatic media.

Distribution was back in the driving seat and the next iteration of performance marketing, on the heels of search and affiliate channels being pulled into the single cookie stack, will be the large number of native advertising opportunities that Google and others will address both within publisher inventory and increasingly in Google’s own comparison search products and organic search result; this will effectively become the new frontier of performance.  

Distribution will in turn move back into offline as publishers take digital learnings and back them into traditional formats. Facebook will drive this in the FMCG market through their data and loyalty partnerships and performance brand will essentially become brand and communications marketing with the social channel rather than simply online and offline.

2. Timing

The performance market has long been obsessed with short term measurement and optimised accordingly. Timing is very important in programmatic as it is not only the user or opportunity a trading desk is buying against, it is the time interaction takes place with the audience that proves decisive; the more information you have against a user the easier it is to value the engagement opportunity and ultimately execute a buy.  

Timing is a key measure of traditional marketing communications and is in many ways better understood by communication planners than digital marketers because it drives the audience centric planning approach that has driven the industry.

3. Audience Behaviour

This element of conversion has long been viewed as conversion optimisation rather than pure behaviour mapping. Ensuring a campaign converts efficiently across channels and devices as well as mapping content from within the channels against landing pages to improve conversion is useful as small incremental improvements in conversion.  But this insight does not feed into a longer term understanding of the consumer relationship.

Personalisation for example is not only an aid to driving sales in the short term, but an essential tool for understanding changing consumer preferences and influences in the decision making process.

Understanding consumers through focus groups is a rich source of data in the traditional marketing world, and these insights might be better served by traditional research companies building consumer based models to help establish new brands and products.

4. Measurement

As mentioned measurement has migrated away from impressions and clicks to onsite and offsite consumer pathway tracking incorporating a lot more post conversion factors. This has enabled performance channels to be recognised as more than short term optimisation opportunities, as their effects stretch to include more than simply sales data.

For example, measuring ethnographic details, consumer profiles from social input sources etc. have created a richer set of measures beyond the quantitative that needs to be included in measuring the efficiency of performance channels.  This is well used and understood by traditional marketing channels and performance channels measurement will be driven by this a lot more in the future.

5. Attribution

Attribution has been a buzz word in the industry for the last few years but has become more widely employed over the last 18 months. Attribution is very useful for measuring cross channel buying efficiencies, as well as deciding how best to optimise future campaigns to achieve against fixed goals. However, by the very nature of its inputs, digital attribution has been quite limited to digital media optimisation and not focused evenly on connecting human behaviours and the influences that drive them.

Traditional analytics companies are now building technology to take econometric models from offline sources and match them against digital attribution, so they are more aligned with consumers and households than simply the sum gain of online digital behaviours.

6.  Re-targeting and CRM

As I mentioned earlier, performance marketing companies have picked off re-targeting (from abandoned shopping baskets or last known purchase action) to buy and optimise media from general exchanges to affect sales. This has been incorporated into trading desks and move into areas of CRM engagement where rich, untapped data will prove irresistible for performance marketers.

CRM and social CRM specifically is the new battleground, and will be included initially in the performance channels before the top down marketing approach and different measures for this type of engagement prevail. I see re-targeting as a form of CRM, albeit opportunistic and in silos.

In the future CRM will sit on a common marketing platform and drive a more organic approach within marketing.

7. Data

Performance data is very useful for correlating drivers with conversion. It does not however, always imply the cause behind the sale and to do this we need far more data inputs and increasing consumer centric data from across performance channels.

Programmatic insight as discussed will be a key driver, as all performance channels will ultimately operate within a programmatic framework. The data that drives them will in turn become more eclectic in nature than ever before.

8. Organic marketing

This is the final point I wanted to cover and is key to my future view not only of performance marketing, but also how agencies will offer clients value and maintain their role alongside their creative counterparts.

Over the past 10 years, brands have built important owned assets both offline and online. We are already seeing the re-positioning of the high street store as a re-purposed offline engagement opportunity. Argos, for example, have trialled a re-designed store to create a consumer first interactive environment which will, I suspect, become a milestone for other retailers to follow.

By leveraging consumer reviews in an Apple style environment, staff now act as consumer champions to educate and inform prospective buyers. Digital assets are following a similar theme. Websites are no longer shop windows, but offer rich opportunities for personalisation and a consumer first approach.

Leveraging these assets, from both the perspective of collecting data and serving relevant content based editorials, will continue to increase the relationship between brands and consumers. Performance channels will harness these opportunities and use technology such as programmatic to optimise the distribution of advertising content across owned properties.

In summary

The reason for writing this piece was to discuss how performance marketing was moving back from acquisition to marketing channels as it helps to establish a new perspective on audience centric data.  This creates a richer digital view of the consumer than ever before.

Aligning this to social login data and the vast data warehouse that agencies and suppliers are gathering, has given a fresh and unified view of performance, not only a measure of digital marketing, but as a rich insight tool that will enable marketing communications planners to create more compelling ideas and content that will, in turn, provide a competitive edge in a crowded market.

By building more consumer centric ‘media experiences’, rather than disjointed advertising acquisition channels, performance marketing will start to become more than a measure and will regain its importance as a central, consumer-led marketing channel.