As part of The Drum's series looking into performance marketing trends, a cross-section of industry experts comment on how changes in the online world will affect performance marketing in the coming year.
David McDermott, performance director, 7thingsmedia
Clearly mobile is playing a large part within the performance marketing industry and will continue to be the focus in 2013 as more advertisers understand and optimise to the various roles that mobile devices play. Augmenting reality along with near field communication (NFC) will spark further innovation linking the high street to online.
Nicky McShane, managing director, AffiliateTraction UK
It would be boring to say mobile again, although recent figures from the IAB showed that 80 per cent of all smartphone owners now use their devices to shop, so we’d be mad not to ensure we’re not optimising performance revenue here.
However, performance marketers have always led the way in terms of innovating and developing digital marketing opportunities, and the potential of social media must surely be on everyone’s radar now. Facebook and Twitter have become part of our everyday culture, and now not only represent respected forms of communication, but useful business networking tools, trusted opinion former mediums and most significantly, hugely influential lifestyle forums also.
It is here where performance and social could now successfully come together, responding to consumers’ more savvy approach to purchase where they actively investigate best deals, locate cashback or voucher discounts, and specifically take other’s recommendations into consideration.
Social media has given purchasers a massive shop window for seeking out best prices, best products and best suppliers – all backed by personal recommendation or warnings from their ever-growing peer group. Nielsen’s Global Trust in Advertising report substantiates this key trend further, discovering that the voice of fellow consumers continues to be strongly heard when it comes to the most trusted forms of advertising. In fact, 92 per cent of consumers around the world said they trusted earned media such as word-of-mouth or recommendations from friends and family above all other forms of advertising.
The rise and popularity of social media has therefore created one of the largest untapped aggregators of engaged consumers, and for marketers focused on their return on investment, performance is the perfect transparent and highly effective marketing discipline to tap into the huge sales potential of ‘word of mouth’ recommendation.
The challenge for the industry will be how it can monetise social without turning it into another commercial advertising platform and possibly tarnish or even lose the very informal, welcome and open ‘word of mouth’ existence that glues the whole channel together.
Kevin Edwards, strategy director, Affiliate Window
Without wanting to sound non-committal, the next big things are the things that other channels and disciplines are exploring. We’re seeing a raft of new mobile opportunities. It’s fair to say new performance ideas tend to be packaged as a variety of opportunities across multiple platforms and channels rather than a single big idea. Aside from this, the work that some of the more engaged advertisers have been carrying out around data will ramp up. We’re seeing more and more requests for better insight and if an advertiser is willing to share the raw data with us then we’ll willingly offer some context for the channel in order to help them make more informed decisions.
Gary Bicker, managing director, affilinet UK
We have seen some marked changes in the online world this year, most notably the increased discussions around the subjects of mobile and big data. Both of these topics still have some way to go, but in particular I see the use of data to create insights as the most exciting change we’ll witness. Crunching the numbers will enable advertisers to gain intelligence on what products are performing well, at what time of year and with which partners, thus enabling them to negotiate their commercials accordingly and gain a maximum ROI on their budgets.
Tina Judic, managing director, Found
Fully offline commission models that reward conversions tracked through technology platforms such as NFC (near-field communications). Whoever comes up with the best affiliate model to utilise the Square payment app will no doubt be onto a winner.
Matt Bailey, commercial director, Performance Horizon Group
I think we will see third party developers begin to look to monetise their work through performance marketing. With more brands opening up APIs and facilitating development using their assets, we will see some innovative uses of brand data, be this mobile apps, social widgets or using emerging platforms and technologies such as NFC, interactive TV and whatever comes next. Monetisation of this using performance models seems inevitable.
Dan Cohen, market unit leader, Tradedoubler
Accountability and transparency are key to this industry; however marketers have hardly scratched the surface regarding how the data can be used. It is incredibly likely that the most innovative publishers, networks and advertisers will find inventive ways to track and use data to deliver an engaging, personalised consumer experience. Undoubtedly, the continuing debate around attribution will remain. There must be a call for an industry standard definition for attribution, which includes how it can be measured and used.
2012 has been ‘the year of mobile’ for performance marketing, with double digit traffic figures and clients working closely with affiliates to drive consumers in-store. For example, during a peak seasonal promotion, affiliate mobile sales accounted for 69 per cent of affiliate sales for one of our advertisers. Furthermore, we’re convinced that app marketers are going to embrace Tradedoubler’s technology, which builds an accurate picture of the best performing affiliates from app downloads and track in-app purchase behaviour, revenue generated and engagement levels.
We are also predicting that the performance marketing arena will see a continued rise of new traffic sources. These include social ‘share and earn’ schemes, virtual currency, video engagement, re-marketing and re-targeting all falling within the remit of performance marketing.
Richard Sharp, managing director, ValueClick Media
The integration of data across all platforms, to develop a holistic approach to marketing will make a difference to all channels within online advertising.
As data becomes the driving force behind even more campaigns, programmes and marketing strategies, we’re going to see an evolution in attribution strategy. Advertisers have tools to track user’s offline and online at scale, but in order to continue to learn about their audience they will need to be able to de-duplicate the effect of advertising across TV, print and online. This will allow marketers to tailor their marketing strategy accordingly; allocating ad spends more effectively.
This feature is part of the performance marketing supplement published with The Drum's 14 December issue.