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Performance marketing: the common currency online activity can be traced back to


By The Drum Team, Editorial

February 20, 2012 | 5 min read

It’s a discipline that’s been around for a while, yet many people still aren’t clear on how it really works. In a special report published by The Drum, we seek to explore the benefits of and challenges posed by this channel, looking into what it can offer marketers.

Perhaps one of the most important questions we could ask our contributors – key figures in the industry – to consider was to justify the statement that performance marketing is the discipline of the moment, because it delivers transparent ROI. Here are some of the responses to this statement. Tina Judic, managing director, FoundFound has always championed performance marketing as a discipline. Whilst we will work with other business models we are fully aware that getting outsourcing right for any merchant is about accountability; something that can often get lost in retainers, management fees and percentage of spend contracts. Performance marketing allows us to build our services around our clients’ needs, demands and budget and, most importantly, deliver results to a guaranteed Cost per Acquisition.For clients where ROI represents their core KPI, performance marketing is a model that works exceptionally well and can achieve significant sales uplifts either as a standalone campaign or cleverly combined with other on and offline activities.Matt Bailey, commercial director, Performance Horizon Group“Performance marketing, if carried out effectively, is the discipline of the moment” would be my take on this. Whilst the model of only paying when a sale is made is ideal from a marketer’s point of view, we shouldn’t kid ourselves that it is without risk. Managing your partnerships closely and thoroughly interrogating the resulting data is key to ensuring that maximum value is derived. Doing performance marketing for the sake of it without clear preset goals holds significant danger.Kevin Edwards, strategy director, Affiliate WindowI’d actually say performance marketing isn’t a discipline it’s a common currency that ultimately all online activity can be traced back to. That’s not to say the ROI will be the determining factor in whether activity is carried out but it is obviously a useful guide to an associated cost for delivery. But it’s more complicated than that. A big shift within affiliate marketing has been from volume to value: that is, advertisers know that certain affiliates can deliver customers, but are they the right type of customers? This extra layer of insight is more complex but should be overlaid with the bare data for ultimate transparency. Sales’ volumes and an associated cost only tell part of the story.Gary Bicker, UK country manager, affilinetThe opportunities presented by performance marketing for advertisers are significant. Without a doubt one of the key reasons why performance marketing has, and is, attracting so much attention from advertisers is that unlike any other marketing discipline, it offers unrivalled levels of return on investment as the whole model is based on performance and there are no hidden costs. Another attractive element of performance marketing is the level of insight it provides advertisers, enabling them to see who the publishers are, who has contributed to purchasing journey, which publishers are driving sales in which areas e.g. fashion or beauty, and tailor their programme accordingly in order to maximise results. Moving forward, this transparency will only continue to grow in value as the data it provides is used to add an additional layer of insight and intelligence to performance marketing programmes. The insight that performance marketing provides generates exceptionally powerful data that can not only feed back into marketing strategies, but also be used in the creation of benchmarks across verticals and products. This is something that we are increasingly being asked about by both publishers and advertisers because it will allow them to more effectively test and trial different channels without having to give away too much of the budget. This in turn will drive innovation across the industry, something that is always welcomed by brands as they seek to acquire new, grow or maintain their customer base.The clue as to why performance marketing has risen through the ranks to become one of the most effective marketing disciplines is really in the name. Everyone is paid by performance. The key to driving up that performance, and therefore growing revenue, all comes down to data. The more data you have at your fingertips the more agile, creative and successful you can be. When you combine this with the right mix of publishers and an attractive consumer proposition it becomes a very powerful discipline indeed. Sponsored By: As a subscriber you are able to download the full report below for free.Coins on Kitchen Scales image via Shutterstock

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