Performance Marketing - Still grubby after all these years?

“At its origins, performance was largely unregulated and highly lucrative – a perfect storm for pirates on the high seas of emarketing. Stories of kids in their bedrooms turning £100K per month by brand bidding were as common as the pop of champagne corks at affiliate network events. If ever an industry needed tidying up!’

Out of this wild frontier emerged a number of reputable companies, which understood that true ROI is reciprocal and should work to the maximum possible benefit for both partners. Being paid solely on performance metrics certainly sharpens the desire to improve every part of the sales process. It also creates innovation, a fact clients are increasingly aware of.

Tim Jessop, Tesco Online Marketing Manager confirms this: “There are important benefits to working in performance marketing as it provides access to small nimble businesses that can help drive innovation in areas such as mobile and social media. Through projects such as Tesco ARC and the Zoo Project we’ve been able to discuss ideas and meet small businesses that can help us provide exciting new services for customers. I think there are some particularly strong ideas being developed in the affiliate space in location based services, social sharing and recommendations"

Hardly surprising then that performance marketers are also among the pioneers of multivariate testing, web analytics and have taken bid management software to a new level. Every big agency now has dedicated “Performance” divisions and acquisitions are more commonplace - Publicis’ recent purchase of Resultrix being a good example.

As marketing requirements have moved away from scattergun brand exposure to more defined sales and lead generation, and most recently, to targeted social media campaigns, it seems inevitable that clients increasingly turn towards performance based solutions. “Paid on Performance” should surely be the mantra of a true marketing meritocracy?

One of the ‘Brainiacs’ working out the true value of performance is Seth Richardson, CEO of DC Storm. I asked him is performance really ‘grubby’? In his view ‘technology will save us’. “Attribution is the key for performance marketing to be truly valued by advertisers and for partners to be rewarded fairly. The days of last click wins and for performance cannibalise the final click before conversion are coming to an end. Smarter advertisers are scrutinising their performance partners more than ever. We haven’t yet seen a wholesale shift to paying performance partner based on attribution, but it will come.”

Ellie Edwards-Scott, MD of QUISMA UK agrees. “When it comes to performance it’s the fact that it's a pay on results model - the risk free model marketers have been asking for.

In an economically challenging market such as this advertisers have had to look at all their marketing channels and see how effective are they. At Quisma we help decipher not just whether a channel is delivering or not but the value of that channel within the overall marketing mix.”

Times are changing, attribution is now becoming far more wide spread, standardising terminology and approach and this is helping trust grow between partners. Best practice is emerging, driven by technology, as well as new levels of industry professionalism.

This is most clearly demonstrated by the new broom approach of the networks, the growth of a4u and the proposed Performance Marketing Study from the iab.

I challenged Marie Dalton, of Trade Doubler, does performance still have a ‘grubby image’? Her response? She wasn’t having any of it.

“The ‘grubby image’ is now ‘The Changing face of Performance Marketing’. Some brand advertisers affiliate marketing contributes up to 30% of their online sales. No channel should be considered grubby when it makes that amount of revenue.”

Is another reason for the resistance is that performance can often speak in a code and be very introspective? I believe performance needs to be more open and engage with the wider media community.

Gary Bicker, Affili.net MD concurs, “Performance marketing has long been misunderstood. Seen as complicated or some kind of ‘dark art’ it simply hasn’t attracted the same investment as other digital marketing channels and has failed to generate the level of excitement or passion associated with the likes of mobile and social. Rather than bemoaning this, I think it’s time that as an industry – networks, advertisers and publishers – we did more to promote its virtues.”

In my view the Performance Marketing industry is a too silent giant. Its position bears little relation to its origins as advertisers have woken up to the benefit of working with a measurable attributable marketing sales channel. The technologies deployed by the networks are sophisticated and they are enabling business to grow and innovate – and often create – disruptive sales channel. That makes this business really interesting. It’s why I’m really excited about the Performance Marketing Industry Study – for the first time we’ll be able to really measure its considerable economic contribution and give it a real voice.

If you still think performance marketing is grubby I would suggest you take a second look and get your hands dirty.

Mary Keane-Dawson is an independent digital business consultant and Board member of The Zoo Project