Following on from Part 1 on this topic, we spoke further with a handful of industry bods to carry out a more detailed Q&A on whether or not advertisers, who are advocates of the buzzing performance marketing scene, should speak up more about the success the channel brings them.
Part 1 questioned if pressure would be reduced on those in the performance marketing sector if advertisers revealed more about their endeavours. It also featured feedback from advertisers EE and Booktopia.
For this second instalment we spoke to industry professionals from personalised retargeting company Criteo, specialist paid search agency Net Media Planet, affiliate marketing network Affiliate Window, audience measurement and real-time advertising company Quantcast, performance marketing agency R.O.Eye and online customer acquisition specialist, dgm Australia:
Q1. Should more brands shout about the performance marketing channel and how well it works for them?
Product Marketing at Quantcast, Rebecca Muir (RM), said: “It would be great if brands who have made PM work for them said so publicly, as there are significant numbers of advertisers who believe that PM is full of remnant, low quality inventory, which might have been the case five years ago, but definitely is not the case today.
“Many brands are reluctant to engage in PR and case studies showcasing their advertising success as they fear that they have discovered a secret sauce that their competitors have not and that by disclosing the secret sauce recipe, they will lose their competitive edge. However, this is not the case as every brand’s’ ideal customer is different and successful brands are now targeting audiences of one, not all buying the same segments en masse.”
Strategy director at Affiliate Window, Kevin Edwards (KE), said: “Many brands share successes internally and whilst we may like them to shout louder about them it’s not always feasible to get sign off from larger brands. It’s important to consider that many brands take affiliate marketing really seriously: affiliates can account for significant portions of their online sales so they’re integrated in wider marketing plans with CPA and additional spend budgeted for long in advance.”
MD of Criteo, Jon Buss (JB), said: “Advertisers have known for some time the value that performance marketing brings to their marketing plans. IAB figures out earlier this year reflect this. Over the past year we’ve seen a far more open dialogue between advertisers about the opportunities and challenges that the channel offers. But there is always room for further discussion and collaboration. As a performance-driven company, we find the best results are achieved when advertisers are willing to share their learnings and concerns.”
Managing director of R.O.Eye, Gavin Male (GM), said: “If you found a rich vein of new sales or a guaranteed way of reducing costs and making your business more profitable, would you share it with your competitors? There’s not many individuals or business owners that would!
“The companies and brands that are maximising their use of performance and affiliate marketing shouldn’t be the tub thumpers for our industry. It’s a competitive advantage for them, just like a new piece of software or patent. Our clients have found a highly cost effective way of reducing risk and maximising sales…why should it be down to them to shout about the good work we (their suppliers, who they pay) do and in turn highlight to others what could be a competitive advantage?”
CEO at dgm Australia, John Matthews (JM), said: “One of the problems that we face as a business and certainly as a wider channel within Australia is a lack of good case studies and clients talking about what they are doing within the category. We tend to find that clients are very guarded when it comes to discussing campaign performance and some of the more detailed strategies that are driving results. Whilst this is understandable to a degree, as ultimately there is a perceived threat of competitors getting insight into what they are doing, I believe this is often flawed.
“There is a huge amount of movement in terms of personnel within the market, between agencies, networks, publishers and clients, as such there is a natural information sharing across the industry, therefore rather than keeping your cards close to your chest, shout about what is working and position yourself as a market leader as your secrets will only last so long.
“One other benefit of clients talking about their successes is changing the way that publishers view the channel. Historically, the premium publishers have been very guarded around protecting their inventory and maintaining their yields through CPMs. With the growth in RTB and also recent changes in business models such as the Daily Mail in the UK becoming an affiliate publisher, this is changing and publishers are looking more broadly at different payment models. If the big brands are openly discussing their successes, within the channel, this will only create further opportunities.”
Q2. If more advertisers spoke more candidly on how the performance marketing channel works for them, and discussed where it lies in relation to other more traditional methods, how would this impact the wider industry?
Affiliate Window’s KE: “I think we have a duty to ensure we’re communicating properly about the strength of the channel and that isn’t just about networks and agencies doing a better job, it’s also about affiliates selling their propositions. If we arm advertisers with the necessary information in an accessible and compelling way that removes a lot of the grunt work they would need to do when talking to senior stakeholders within their organisations. As a channel premised on sales we’ll always struggle to win hearts and minds if we’re merely rows on a spreadsheet. Build out the proposition and then attach the sales potential: make it easy for advertisers to share success.”
Quantcast’s RM: “I don’t think many brands are in a position to do this as the industry is still heavily reliant on outdated attribution methodologies that only value the last ad view (or even click) before a sale took place and, therefore, brands are missing out on understanding the true role of other ad views and clicks in the consumer path to conversion which spans multiple devices and channels.
“If brands have succeeded in doing this then they absolutely should candidly discuss how that achieved this and the subsequent actions they took to optimise media. The industry needs success stories to fuel the change in measurement which will help tie up performance across channels.”
Dgm’s JM: “Ultimately you would expect a great flow of investment into the channel. However one area that PM often lets itself down, is by its very nature, concentrating too much on the numbers and not looking at the broader benefits of the channels.
“Whilst PM channels will never be able to offer the reach afforded to traditional offline channels such as TV, the environments where brands are being promoted through PM channels have huge influence on the consumer awareness of a brand. I believe that often this is not communicated well enough to the clients and as such, as an industry we are seeing budgets that could be channelled into PM channels staying with more traditional channels.
“Affiliate in particular lends itself to a wide spectrum of possible partnerships that may have previously only been possible through more traditional methods. Talking about successes and ‘out-the-box’ partnerships raises the brand profile and makes the campaign more attractive to potential affiliates and tech partners. It may even be the push that publisher startups need to take the leap and invest in developing new, innovative solutions.”
Q3. Do advertisers perhaps think the work they do in the performance marketing space should be promoted by the networks/agencies/PM partners?
Criteo’s JB: “I don’t think this is the case. The reality is more likely that advertisers are far too busy in their day jobs to be actively thinking about promoting our business for us. There has been a consistent rise in advertiser involvement at industry events with the discussion moving on from generalities to quite detailed discussions around topics such as attribution, programmatic buying and cross-channel and device challenges. But what is sometimes apparent is that it usually the same voices.
“Mostly this is due to confidence with discussing what can be rather technical topics, as well as internal sign off to be part of the discussion in the first place. This latter point is one which the media can likely help with. Traditional media coverage of the ad sector is more likely to focus on brand-led campaigns. By educating the media on how PM is a substantial part of the marketing mix, we can help advertisers build an internal case for talking about PM.”
Affiliate Window’s KE: “This very much depends on how a brand is structured and how engaged they are with the channel. Too often we build a solid relationship with a client and feel we have a flag bearer within that company only for that individual to move on and their successor doesn’t take the same approach. Overnight you can find your place at the top table removed and you’re a channel that ticks over in the background.
“Where we see most success and buy in is when we have a strong relationship with an engaged advertiser. It’s obvious that if the affiliate channel is responsible for driving significant revenue a brand will invest more heavily. We’re always prepared to put in the legwork and promote that advertiser but we can’t do it if they take a back-seat. Additionally the industry has become more fragmented now so there can additional players involved who are less focused on promoting the channel.”
Quantcast’s RM: “Advertisers rely on their agencies to keep them up-to-date with recent developments in the media industry, the emergence of new channels, tactics and best practices, but consideration needs to be given to where agencies get their knowledge from, it’s often through case studies from PM vendors which rely on brand consent. Vendors will do the hard work of producing the case study but it is nothing without brand endorsement.”
Dgm’s JM: “As stated previously I believe that clients are naturally very nervous to share a lot of their successes. We find that a lot of our clients have blanket rules around what they can/cannot say to the wider market. When this is coming from some of the largest brands, globally that use the channel, it means that we are missing out on some great stories to extol the virtues of what we do. With a dearth of top tier client case studies it is then down to the agencies and networks to look at how they can promote the channel, through aggregating data and creating non-branded case studies.
“I think there’s also an element of this that should be pushed back onto the publishers as well – not just networks and agencies. When introducing a new publisher partnership, we are frequently asked by advertisers for a case study to demonstrate potential success. When publishers can mention a strong brand name onto their successful performance data, that’s when the interest really starts to peak.”
Q4. How do you think brands view performance marketing in relation to other more traditional marketing channels?
Criteo’s JB: “The majority of brands (if not all) are engaging in some form of performance marketing. As mentioned before, the IAB figures released earlier this year, show the rise in spend. This is only likely to continue as brands enhance their digital teams and increase their presence across mobile devices. More and more brands are turning to performance marketing for the clear return on investment it generates as well as its ability to offer measurable campaign results compared to brand advertising which is harder to measure. PM’s ability to deliver personalised messages to consumers combined with measurability is a key benefit compared to other channels. Innovations in technology as well as an increased understanding of how technology can benefit advertisers have also driven a greater uptake of performance marketing.
“Reports earlier this month that Procter & Gamble, the world’s biggest advertiser, could buy between 70% and 75% of its US digital media via programmatic by the end of this year, go to show how seriously technology has impacted on advertisers.”
Affiliate Window’s KE: “I wouldn’t want to speak on behalf of advertisers so this is a question best left to them to answer. I think the general view would be that there are concerns about how focused the channel is on discounting: I think this is more by default than design as these business models seem to emulate consumer trends.
“Additionally there is a recognition that a longer tail of affiliates is always welcome but requires hard work and perseverance, two things that are dependent on how much time and resource the advertiser has available to them.”
Quantcast’s RM: “Brands often still see PM as something that can be turned on and off as and when it’s needed to top up performance when more traditional channels fail to deliver against target. This is not the most effective use of PM as the models and technology that powers PM learns continually and continual activity improves the learning which continually improves performance. Savvy brands have realised this and have adopted always on strategies and are seeing great success and return-on-ad-spend.”
Dgm’s JM: “You cannot give a broad brush answer to this statement as no two clients are the same. We find that some clients truly embrace performance marketing and have a huge thirst for education, whilst others dismiss what we have to offer as an industry, as it doesn’t fit into their view of the world. The most successful brands integrate performance marketing into a multichannel marketing approach with their traditional campaigns. This makes good sense, as while traditional campaigns generate brand awareness, performance marketing is there to drive sales off the back of it.”
Founder and CEO of Net Media Planet, Sri Sharma, said: “From my client conversations, without a doubt, performance orientated marketing is on the increase. Clients want measurability and results and this isn’t going to change. That said, we are working with clients to bring performance to more traditional marketing methods by integrating them with channels such as search and display advertising. For example, we built a technology product to integrate TV with paid search. One really interesting and new area we are working on is to bring more performance from traditional linear TV advertising through, using Sky Adsmart technology.”
Q5. How are performance marketing techniques being embraced in 2014, across the wider retail landscape?
Affiliate Window’s KE: “We’re at an interesting point as boundaries between channels become increasingly blurred. I think with that convergence suppliers are looking to claim a greater share of the spend, but this needs to be done in the right way. For example, any type of remarketing is a now accepted part of an advertiser’s suite of marketing channels. If third party affiliates are running this via the channel we can control the mechanics of how it operates with other affiliates and their traffic, setting cookie hierarchies and so on. When it sits outside the channel we can’t and this is where affiliates could get squeezed. Similarly I think there is work to do in making affiliate traffic convert better, especially in the realm of banner advertising – but I don’t think networks should be taking that traffic and up-selling their own remarketing and retargeting solutions to cannibalise affiliates.
“There has always been a grey area around network neutrality and it concerns me that this is being eroded. Advertisers obviously want their affiliate campaigns to work as efficiently as possible, but this can’t be done at the expense of legitimate traffic.”
Quantcast’s RM: “This year we’re seeing retailers embracing prospecting (showing ads to internet users who have not previously visited your website). Prospecting has, over the last year or two, taken a back-seat to retargeting (showing ads to internet users who have already visited your website), because of the quick results driven from retargeting. But the reason retargeting drives quick results is because it is easier to do, you just have to cookie users on a website and then send ads to them at a high frequency until they buy your product. Prospecting is harder as you have to identify the brand’s ideal customer before they have arrived on the website and exhibited any intention to buy.
“The reason brands are now embracing prospecting is because they have realised that if prospecting is neglected in favour of retargeting, the top of the funnel dries up and sales start to fall.”
R.O.Eye’s GM: Performance marketing is starting to be mentioned in the same breath as traditional channels as more and more marketing decision makers adjust their view to the omni-channel purchase path. Big data, multichannel, multi-platform tracking and attribution modelling are starting make all channels fully accountable for their performance. Obviously as a channel that is called performance marketing, affiliate, lead generation et al are very well placed to benefit from this more intelligent approach to tracking return on investment.
If you missed Part 1 you can check it out here: Does Performance Marketing Need a Bigger Voice? Part 1