This week saw the release of the IAB's annual performance marketing study. The assessment of the state of the industry revealed the spend across various high-performing channels in 2015 as advertisers ramped up their investment in ‘marketing you can measure.’
With affiliate and lead generation found to be generating approximately 1% of the UK's total gross domestic product and generating plenty of ROI for advertisers again last year, the study also brought good news for social media advertising and programmatic.
With cross-channel knowledge in tow, Dan Robinson, head of performance at global media planning and buying agency Maxus UK, shares with us his take on what unfolded last year.
Affiliate and ‘lead gen’ set to grow...
Another year on and another year of growth for affiliate marketing and lead generation. Whilst this comes as no surprise, it’s spend, ROI and content that really highlight the underlying story here.
Looking at growth, spend outpaces sales, which has a knock-on impact on ROI. This is by no means a negative outcome; in fact, it’s positive. Almost 60% of consumers coming from the affiliate channel, generally operating on premium commission levels, are converting through non-incentivised traffic.
The traditional view is that the affiliate channel is a route for the savvy consumer, however, it is not as simple as that. The dominance in non-incentivised conversions highlights a channel which clearly presents, educates and informs consumers on products in a non-biased way and it looks like it’s not just here to stay, but it’s set to grow.
Social picks up…
The growth in social over the past year really has been astonishing. While the overall growth has picked up by 45%, we have seen that it is the larger advertisers growing many times this figure that are skewing the numbers upward, which is specifically the case with Facebook and Instagram.
This change has been brought about by the expansion of the ad formats and bidding models that can efficiently target every stage of the purchase journey a consumer goes on.
In addition to this, the launch of a “premium” environment where brands can engage users on Instagram has further bolstered the proportion of budgets assigned to social campaigns. The space has shown no signs of slowing down in 2016 and we expect to see these increases again, as well as new players like Pinterest starting to take their share of the social budgets.
Paid search booming...
The steady growth of search over the last ten years continued in earnest last year, for the first time surpassing £4 billion. Google has worked hard to increase revenue in a market with new ad formats and changes to the SERP [search engine results pages] coming every few weeks. We have also seen a rise in the use of cross-device measurement allowing better attribution of conversions and new ways to optimise activity.
All of these changes have impacted competition on the SERP and therefore cost of paid search to the advertisers. We have also seen a large growth in Bing’s market share this year and it is now becoming a real player, worthy of every advertiser’s full attention.
Bright future for programmatic...
Having been a buzzword for a few years, programmatic display really started to resonate with advertisers this year. The expansion of marketing tech stacks, better connectivity and data sources have all facilitated this growth. I fully expect this process to be simplified further over the coming year, especially in the large networks of Facebook and Google which will in turn push this switch to programmatic closer to the 100% mark.