IAB’s Clare O’Brien Reflects on “Strong and Steady” Results for UK Performance Marketing

The latest IAB/PwC study of the performance marketing industry proves once again that affiliate marketing and lead generation are consistently strong players within the digital marketing mix.

What’s more, the steady growth we have seen in these techniques, year on year, reflects their maturity and proves that they represent highly significant practices for today’s digital marketers.

The latest study shows that some 4,500 advertisers were spending £1.3 billion across 12,500 publisher sites in 2015. To illustrate the consistent popularity of performance marketing, this is up from 4,000 advertisers spending £1.2 billion across 12,000 sites the year before – so an increase of 9.3% on a like-for-like basis. What we are seeing – and continue to see – is a steady widening of the performance marketing universe. Each year, more advertisers are deploying the model and recognising its value. 

Once again ROI is very strong, too. For every £1 spent £13 are generated via these techniques, according to the survey results. Few marketing techniques can claim such strong performance.

And with mobile now being viewed as a conversion platform, and marketers able to benefit from ever-improved tracking technologies, we are only just scratching at the surface of what’s possible with performance marketing. There is enormous diversity within the in this universe, too, with brands deploying it in a variety of ways, even within sectors. 

Widening opportunities

But what’s sometimes overlooked is the impact of affiliate marketing and lead generation techniques on brand awareness. The 2015 figures show that performance marketing resulted in some 4.7 billion clicks. Clearly, this is an extremely significant volume of interaction. This figure therefore serves to highlight the wide-open opportunities within the model. 

Indeed, performance marketing is a part of consumers’ lives. It generated some 13 million clicks a day – or 150 clicks a second – in 2015. Along with the amazing ROI affiliate marketing and lead generation can lay claim to, this provides further evidence that performance marketing is a very strong player within the overall digital marketing toolkit. And it also offers potentially huge brand benefit for the advertiser – because those 150 clicks per second are brand interactions. 

With performance marketing, it’s therefore important not to focus entirely on the resulting data or sale – because this is an interaction which can produce a brand benefit, too. As soon as there’s a click there’s an interest. The consumer has clicked to find out more.

Integration, both on and offline, is also key to success. The performance marketing levers must be seen as part of the overall marketing mix. Those who fine-tune in this way will steal a march on their competitors. 

We found that performance marketing represents eight to 10% of UK digital marketing spend and circa 10% of UK retail e-commerce. That’s 1% of UK GDP. There may be an absence of dramatic headlines about it, but this is no niche advertising model and it’s certainly one which pragmatic marketers would do well to adopt – if they aren’t already.