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Performance Marketing – The Value and Perception Debate!

17 October 2012 BY

It was established early on during the session that there has been a massive shift in the performance marketing industry over the last few years. This has manifested in performance marketing ‘changing shape’ in the digital marketing mix, and media agencies are very much more aware and inclusive of this in their spend. Currently, 20% of digital marketing spend in the UK goes to affiliate marketing but could this be more now we are considering this under the term ‘performance marketing’? Below we have summarised the pertinent points raised during the discussion:

a4Uexpo Performance Marketing the Value and Perception Debate

 

What are the key challenges that the performance marketing space over the next 12-18 months?

  • This economic climate it’s fuelled the advances in performance marketing, ‘eat what you kill’ and take the opportunity available to you
  • Agencies have started to understand the value of the network and they are increasingly buying into them
  • There should be greater consideration of consumer touch-points available to us (digital screens, NFC…) and how performance marketing can access and use these. Performance marketing must innovate and own these places
  • The networks need to make performance marketers more aware by raising the level of sophistication in the affiliate space e.g. you could offer 5% return if you drive conversion on a certain asset, but what about if you’re offering 10% to drive traffic and conversions to a specific asset or specific product, during a specified day or timescale
  • Something that performance marketers need to focus on is understanding and communicating the power of the performance in a language that those who need to know, can understand

Are affiliate marketing and performance marketing really the same? – How do we define ourselves?

  • “The affiliate model itself is ultimately a way of driving sales”
  • In all of the big advertisers you have a affiliate team
  • Sometimes the affiliates sit in the sales team, other times in the marketing team
  • Where does the budget you’re after reside and what kind of money pot are you trying to attract?
  • The sales and the marketing budgets are likely to be different
  • What really is performance marketing? Surely, every marketing spend should be about performance?
  • ‘Affiliate marketing is about a story’ – its about every stage of the process.

The creator of the brand often fail think about the relationship between performance marketing and the basket (end goal). It is the role of performance marketers to educate the clients, this is currently an area that is being missed out of education for clients. Without approaching it appropriately, performance marketers are at risk of end up becoming a ‘do for me’ not a ‘think for me’ industry and that’s incredibly dangerous.

Recruiting & retaining in performance management 

When recruiting the crowd contributed to say that “you should be talking about performance” (no longer affiliate) but this is an overarching term that includes: SEO, PPC, display, planning and buying, mobile… affiliate is just one aspect of this. This could be seen as why there has been a trend of people moving from affiliate to in-house roles.

  • The panel advised us to looks towards the US, Germany and Sweden as inspiration when considering career progression/recruitment, we have a lot to learn here
  • Remember that salary will not keep someone in a job – it needs to be more than this, individuals must also be inspired
  • Throw out the standard network model of promotion Exec > Manager > Director > Head of Department – it is a predictable and slow progression, people will get bored and they will move on
  • You need to reward your affiliates on a multi-level basis (of higher sophistication) when you work with an affiliate approach them on a brand basis rather than price. Don’t just look at commission

Closing Thoughts

  • Co-opration is key. Agencies could work better with performance marketers by communicating the underlying clients business objectives in full, together they can then work better at aiming to fulfil these
  • There are many disparate groups in the performance marketing space, however the lines of communication in performance marketing have strengthened, the industry is changing toward a more communicative stance
  • Remember that “an affiliate is a temporary custodian of a merchants brand”, ensure you treat it this way and manage all parties involved
  • Fear breeds discomfort – understand the stigma of being called affiliates, this may be a reason that agencies/networks are protective and are scared off, communicating the benefit is essential
  • Focus on what you’ve achieved and don’t under value yourself
  • Innovate

One of the major issues with the value and perception of performance marketing is looking in too finer details. We must remember that TV budgets get assigned based on a small percentage, such as a 1.6% uplift in brand retention from this medium. Digital marketing can offer a higher level of trackablility and value over and above this, to communicate this to those that matter we need to start talking these peoples language.

The perception and value of performance marketing is in our hands to change. By communicating with our clients such as thinking about the campaign mechanics that you’re offering (cashbacks and coupons have dominated over the last 2 or so years) and think about the innovative ideas that you can sell to them. Make those you’re selling to believe in it, proving it to them will create buy-in and help force others to engage on a far more sophisticated level.

AUTHORED BY:
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Ned Poulter is the Co-Founder of AvitaDigital, a Digital Marketing Consultancy based in Copenhagen, Denmark. He specialises in all aspects of SEO, digital marketing consulting and PPC, amongst many other things.
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