It might not be a new concept or the latest industry buzzword but, in an increasingly mobile-centric world, performance marketing is on the rise and set to play a bigger role than ever in marketing strategies.
Much of the reason for this is that the scope of performance marketing has grown. Instead of being purely associated with affiliate-centric efforts— an essential but not the only element of the marketing mix — it has become a far more transparent and trusted technique for interacting with audiences across the mobile ecosystem. When used as part of a wider range of sophisticated tactics and tools, performance marketing now allows advertisers to reach users in a dynamic, smart and highly engaging way. Indeed, it is so effective at driving ROI, marketers are beginning to take best practise from this method to use in brand advertising campaigns.
So what are the key trends driving the on-going growth of mobile performance marketing?
The supply opportunity of OEMs
Mobile is a strong platform with exceptionally high levels of engagement and a wealth of information, such as location data, which can be used for precise targeting and personalisation - providing, of course, advertisers adhere to new privacy regulations. As consumers spend an ever-increasing amount of time on their mobile devices, and smartphones evolve to include emerging technologies such as augmented reality (AR) as standard, demand for mobile advertising will continue to grow. But mobile advertising is being held back by a lack of in-app formats and touchpoints. Moreover, with advertisers continually competing for the same in-app placements, consumers are becoming blind to ads.
Original equipment manufacturers (OEMs), the sleeping giants of ad tech, provide the answer. By opening up new supply sources and interactions with audiences, OEMs bring new life to the mobile advertising opportunity. As well as delivering the supply necessary to meet growing demand, OEMs offer more opportunities for targeting and personalisation than in-app advertising due to their unique position on the device and unparalleled access to first-party data. Finally, OEMs offer a clean, fraud-free environment that is highly appealing to advertisers, encouraging them to invest budgets in mobile performance marketing.
The appeal of campaign measurability
Measurability is a major benefit of performance marketing, providing the key to its initial success and subsequent growth. When marketers can measure the effectiveness of their campaigns at a highly granular level to prove ROI it is far simpler to justify spend and get budgets approved.
Looking beyond ROI
Performance marketing is now evolving beyond the typical monetisation metrics it is best known for, such as clicks and downloads, towards more meaningful measurements that include user engagement. For instance, with interactive ad formats, marketers can understand how and when consumers are engaging with content, and which ad variations are proving most effective. These insights enable advertisers to continually optimise their campaigns based on the best performing variants to build long-term user engagement and achieve greater ROI. Furthermore, data about consumer habits and interests can also be shared with app developers, enabling them to make adjustments that create a better quality experience.
As measurement opportunities within performance marketing expand, it is becoming more relevant to a broader group of advertisers to look beyond ROI KPIs to areas such as subscription, monetisation and in-app purchase. This all encompassing approach to campaign measurement is inevitably leading to increased investment and growth. Additionally, performance marketing can also be used to drive KPIs with a longer-term emphasis such as Lifetime Value (LTV), which global industry leaders consider the most important ad spend optimisation metric according to Mary Meeker’s 2018 trends report. By analysing a user’s response to in-app advertising, marketers can estimate what that individual’s monetary value is and target them accordingly.
The convergence of mobile technologies
In recent years, standalone mobile technologies have proliferated and driven development in mobile advertising, but these tools are now being brought together to dramatically improve the effectiveness of mobile performance marketing.
For instance, with playable ads it is difficult to generate effective campaigns when creative development and distribution via programmatic are done by different parties and take place in isolation. This disjointed approach can cause technical issues, preventing smooth delivery, and resulting in a conflict of interest where data and information is not shared. When the two elements of creative and media are brought together, however, marketers can gain far more from their campaigns, leveraging highly personalised creative to explain their products and services to consumers and achieving high conversion rates as users engage more deeply with the ads.
As a further example, app installs and retargeting to maximise time in-app, two techniques that traditionally take place in silos, are also being brought together within a single platform to enable data sharing and generate higher ROI. As these types of mobile performance marketing techniques are brought together within single platforms the opportunities to drive success for advertisers will increase, boosting demand for performance marketing.
Performance marketing is on the ascendency, shaking off its reputation for questionable supply and short-term metrics to become a trusted and transparent marketing technique with a longer-term focus. As supply increases, targeting and personalisation opportunities expand, KPIs become more varied and meaningful, and mobile ad technologies converge, mobile performance marketing is going to be bigger and better than ever.