Welcome to Part 1 of our feature which looks at whether or not the performance marketing industry needs a bigger voice. Across this two-part feature you will hear views from the MD of Criteo, the head of home broadband acquisition at EE, the founder and CEO of Net Media Planet, as well as plenty more industry professionals from the likes of Quantcast, dgm, Affiliate Window and more…
The fact that iconic brands such as Ted Baker, John Lewis, Amazon and ASOS invest their budgets into performance marketing is testament enough to what they think of the flourishing landscape, but are enough brands shouting about it?
We get that it is important to keep your marketing strategies close to your chest, but if more brands, globally, did give us that extra peek into what they really think, would not this be a good thing?
Of course we have this year’s Online Performance Marketing study from the Internet Advertising Bureau (IAB), which produced quantifiable data proving the industry’s worth (it generated a whopping £14 billion in sales in 2013), but is this enough? Do we need to know more on where performance marketing lies in relation to other marketing channels? Or is this an unrealistic expectation?
Yes there are many top brands which are great at putting together case studies of successful performance led campaigns, but at times, getting a comment or the odd quote from an advertiser can be like getting red wine out of your cream chinos using white wine – a tough slog and you are not sure if it was really any better than just using the soap.
We may know plenty of people in the performance marketing world who would agree, but are we giving the advertisers a tough time with such an expectation? After all, they have a job to do and blowing the trumpet for us is probably not top of their KPIs.
Pressure to prove the industry’s worth
If more brands did get vocal on the matter would this decrease the pressure on things like the PwC/IAB study and reduce the reliance on networks/agencies trying to secure case studies?
Managing director of R.O.Eye, Gavin Male, said: “Potentially yes, but there always needs to be a spark to start any activity in any buyer/seller relationship.
“In this example, greater ‘shouting’ in a wider capacity about the performance marketing industry might get the conversation started in some stale boardroom environments, but it will still be down to research, white papers, case studies and business development teams to back up the initial interest and aid the decision making process.”
Rebecca Muir, who works in product marketing at Quantcast, also stressed that ‘success breeds success’, because as a buyer you ‘want to go where other successful brands have gone’.
“More public declarations of success from brands would help the industry, but media planner/buyers are always going to want aggregate figures, such as those in the PwC/IAB study, to ensure they are taking a rounded view,” Muir added.
MD of Criteo, Jon Buss, agreed and said there will always be a need for independent auditing and benchmarking by industry bodies such as the IAB, as this benefits advertisers and the industry as a whole.
“Having advertisers talk more openly about their performance marketing activity will certainly help ease the reliance on case studies which have always been more of a contentious issue for performance marketing than brand-led channels. This is primarily due to performance marketing becoming an ‘always-on’ channel,” Buss begins.
“Advertisers, understandably, do not wish to share detailed information on ongoing initiatives which they feel may benefit their competitors.
“What is important for us as an industry is to show advertisers the benefits in sharing insights from their PM campaigns.”
Strategy director at Affiliate Window, Kevin Edwards said it is ‘unrealistic’ to expect advertisers to want to shout about performance marketing.
“They don’t about their other channels so why should expect it?” Edwards explained.
“The IAB study is specific to affiliate marketing as the standard Adspend study has never taken account of the commission payments that are the biggest part of our channel, and therefore on face value our industry looked smaller than it is.
“It just so happens that in contextualising the industry in the IAB study we are able to focus on the many positive aspects of it.”
Dgm Australia’s CEO John Matthews, said for every client case study that shows great use of performance marketing, there is likely to be those campaigns that haven’t succeeded – therefore people are less inclined to discuss these.
“Which is a shame as often there are far greater learnings to be gleaned from failures and understanding what went wrong,” Matthews said.
“The benefit of the wider studies that are conducted by the IAB/PwC is that they have been created by third parties and this validation of the channel is important when viewed by a client, who is often being sold to by different vendors on a frequent basis.”
What brands are saying
In addition to catching up with people from across the industry, we spoke directly to a couple of advertisers about their use of performance marketing channels.
Both mobile network operator Everything Everywhere (EE) in the UK, and Amazon rival Booktopia – an Australia-based online only retail store, use traditional methods, such as press advertising, as well as varying performance-based marketing methods.
On the question of how he sees performance marketing and how this fits into EE’s marketing mix, head of home broadband acquisition at EE, Simon Perrin, said it’s simply about delivering targeted communications to consumers who are in the market for your product.
“We have invested a lot of time and money into an affiliate programme to deliver the right mix of comparison space exposure, market leading cashback and compelling voucher offers,” Perrin said.
“As a challenger brand in the broadband space it is key we deliver a compelling reason to choose EE broadband, so much so that we are now offering all customers, not just our mobile customers, access to our best deals.
“Search is the other key channel that we focus on – with brand and generic PPC being very important to establish EE as a cheaper alternative to BT.”
Traditional marketing vs performance
On the subject of where performance marketing lies in relation to other marketing channels, Perrin said the vast majority of the home broadband media budget is focused on talking to customers who are in the market for broadband by delivering them to its EE/broadband website.
He said the company is able to leverage its retail estate to talk one-to-one to its mobile customers.
Chief marketing officer and sales director at Booktopia, Tania Johnston, said the current ratio for performance-based marketing versus other channels is 20%, but the company would like to see this increase to at least 50% or more.
She said the company actively looks to work with partners that offer a performance-based marketing model.
Booktopia has an affiliate programme and also uses channels such as paid search, retargeting, marketplaces and shopping comparison engines.
“Over the past 12 months Booktopia has focused on its performance-based marketing channels, in particular the affiliate programme (with the help of dgm) to grow this channel by over 150%,” Johnston explained.
“Our aim is to continue to expand and grow this channel as well as introduce other performance-based marketing activities preferably on a CPA basis.”
Sydney-based Johnston said ideally the company would like more providers to offer performance-based marketing as it means all parties involved need to be focused and measured on the success of the campaign in order for all parties to be rewarded.
“To us, a provider who offers this model represents that they are confident in their offering, they understand our goals and expectations and in order to achieve results there is skin in the game from all parties involved,” she added.
Johnston said regardless of the various models Booktopia works with, internally they monitor, optimise and make decisions on all of the marketing programmes as if they were a performance-based channel.
“When offered, it makes it easier for Booktopia to try and test new channels as it eliminates the initial investment risk and the requirement for a budget to be approved and allocated upfront,” Johnston explained.
“As long as the campaign performs, budget is made available. If the initial campaign test is on a performance model and it has performed then we provide the comfort we need to revert to more traditional models.”
When asked about how performance marketing techniques are being embraced across the wider retail landscape, Perrin agrees with Johnston about the benefits of the channel’s ROI.
“Understanding ROI on every click generated is key for budgeting/forecasting and delivery results,” Perrin added.
“The affiliate network is key as consumers become more loyal to these sites and/or use them as a point of reference.”
Check out Does Performance Marketing Need a Bigger Voice? Part 2, featuring a more detailed Q&A on the topic.