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Mind the Gap: Why performance marketing still has so much more to give

13 Mar 2017

Chris Blower

Inspired by the latest musings on PerformanceIn, as well as flicking through articles of old where many of us within the industry have reminisced how performance marketing has evolved over the years, I thought I would threw in my tuppence worth and highlight a few areas where I feel the channel requires more resource and investment.

Whilst there’s not a one-size-fits-all silver bullet, there are 5 areas distinct areas highlighted below that – if as an industry we progress on – then perhaps we’ll witness a significant paradigm shift where the channel will fully kick on and change its perception for the better.


The Bigger Picture

We’ve seen a greater amount of transparency over the years including some improvements to affiliate tracking, including mobile, cross-device, assisted sales, and so forth, but we’re still a long way off seeing how affiliate and media partners fit within bigger picture. As an agency, we’re trying to bridge that gap; therefore we’ve invested heavily in ‘Single View’, our proprietary software which looks at all customer flow within each sale generated for our clients. Continual hypothesis testing allows us to see how specific changes have an impact on the whole business, rather than just affiliates in isolation.

Expert knowledge

This is a two-fold gap: Talent and specialist knowledge. Being in such a dynamic, ever-changing environment, we need to encourage more creative thinking and innovation from all stakeholders within the channel; from the new graduate to the industry stalwart. The recent closure of the PerformanceIn forum is a shame because we should be encouraging more conversation and debate, ensuring all affiliate/performance managers are bought up to speed with the latest developments to the channel.

Regarding specialist knowledge, there’s a lack of skills in conquering attribution and I don’t feel like there are many networks/agencies/clients that are truly confident in knowing what is the best attribution model to reach their online goals. This comment is attested by the recent ‘state of attribution marketing’ handbook, which had two key outputs:-

  • 58% of those recording attribution have a lack of knowledge when interrogating the data
  • 60% don’t action the insights that they get from attribution.

Last click

Could it be that the issue with the previous point is intrinsically linked with the one-size-fits-all last click model? I don’t have the answer, but what I do know is that there are Head of Digital marketers out there who are moving over to different models and remunerating channels in a more holistic way. I’ve read fairly recent from varying ‘attribution specialists’ that last click is in its last days. This is by no means a direct threat, but if we don’t adapt and consider other models other than the default last click then we – as an industry – run the risk of getting left behind.

CPA

Slowly within the agency there’s a shift. 100% of all activity 5 years ago was on a CPA, but we’re seeing more and more investment in CPC, CPM, CPE and the re-birth of CPL campaigns. CPCs aren’t anything new as this is what aggregators and key financial sites have used for a while now, but we’re having a lot of conversations with partners such as Outbrain, Taboola, Linking Mobile etc.. who don’t work to a CPA. As the breadth of performance marketing grows, we must be in a position to try new things and not get stuck in the CPA rut; providing KPIs are determined and that it helps towards the client’s goals there’s no reason why these partners – away from a CPA – shouldn’t be a pivotal figure in the performance arsenal.

Budgets (and requiring additional spends)

Because affiliates has already been regarded as a channel that is heavily publicised as a channel with one of the best investments (IAB noted in 2014 that the channel brings £14 profit for every £1 spent), it’s often tough to claim more budgets than just the CPA that is paid out to our partners. More than ever voucher code, Cashback, content sites, bloggers – most genres in fact – are asking for additional budgets to run activity.

Personally, I think this is because we’ve positioned performance marketing as a channel that will provide great returns on sales, rather than additional performance metrics which can be reported on and may have been important for the particular campaign, such as a new product release (Impressions, click, app download, and competition entries). Media buying with non-traditional affiliate types such as Time Inc, Tech Crunch and other key authoritative sites have so much more to give than just sales. With one of our clients we have invested heavily, some have broken even; some have failed, some won, but until the messaging of the channel changes (as per £14 profit for £1 spent) then we’re always going to find it tough as a channel to loosen those purse strings.

What do you think the channel needs to do to push on? if you’re interested to discuss any of the points raised in this article about your performance campaign, please contact me on Chris.blower@roeye.com