Performance focus: What role does data play in the performance channel?

By Gillian West | Social media manager



Performance Marketing article

December 14, 2012 | 8 min read

Data is the foundation of all digital marketing strategies, and it is becoming increasingly essential for marketers both in-house and agency, to understand data's capabilities and glean insight from it in order to inform decisions. But what role does data play in the performance channel?As part of an in-depth look into the performance marketing industry The Drum caught up with some of the UK's leading performance marketing agencies including - Tradedoubler, 7thingsmedia, AffiliateTraction UK, ValueClick Media, Affiliate Window, affilinet UK, OMG and Performance Horizon Group.

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How can advertisers make better use of data in driving sales through the performance channel?Andrew Copeland, network director, North West, TradedoublerThe effective use of data is a skill which needs to be mastered before real performance increases can be achieved. Many advertisers rely heavily on one partner or agency to undertake activity in many specialist areas. This is where I think many advertisers fail in their planning of their digital campaigns. The effective use of data often requires a specialist and often this specialist is a third party. By relying too heavily on one provider to undertake all activity, many advertisers are not getting the best out of their data. Therefore, it is not about making better use of data but more about making better use of the data specialists available in the market.David McDermott, Performance Director, 7thingsmediaThe role of data is quite simple: provide the insights that allow for effective business decision making. Ultimately a marketer has to understand the role, and the effectiveness, of all their marketing strategies and the intertwining roles each channel has upon each other. Understand this and it will benefit all your marketing activity, not just the performance industry in isolation.Nicky McShane, MD, AffiliateTraction UKData is extremely topical currently, with growing numbers of advertisers now using tag management/analytics technology to get a much better understanding of where their traffic is coming from.Advertisers should be utilising data to understand the sales funnel better, and to really get to grips with how their customers are making their purchase journey, the touchpoints they are making and the decisions they are taking along the way.Data for affiliates is also currently quite narrow and centres around the last click. Advertisers must really dig into their analytics now, as the output will not only give them more strategic insight, but also allow them to understand the value of each of their channels and partners, and to focus on those that indeed add value.In response, the overall digital pie may be being nibbled by a much wider spectrum of channels now, but the performance marketing industry needs to be ready for this data driven inspection. There is currently a growing reliance on a certain type of affiliate and we need to keep an eye on this to ensure it doesn’t jeopardise the value of the industry.The clock might be ticking on the value of all digital channels now, but performance marketing in particular really needs to understand fast where it sits in the food chain.Richard Sharp, managing director, ValueClick MediaIntegrating and interpreting data across multiple platforms is now the key to performance marketing and matching that with the multiple stages of consumer behaviour in the transaction process is critical to building a complete picture of how individuals and audiences interact with brand messages online.But advertisers need to understand not just the value of their own audience behaviour, but the role different data sets can play and the value they add. RTB data can add scale and third party data can provide behavioural insight; but the data category that is likely to add most value and enable a brand to out-perform the market is unique, proprietorial data. Another exciting aspect of data analysis to drive digital performance marketing is the integration of off-line behavioural information drawn from multiple lifestyles, commercial and environment sources.However, while data-driven brand strategies can empower advertising, marketers must ensure that their strategies do not alienate consumer. Our research shows clearly that while people are happy to see relevant ads online, they want to know more about the process and will become less tolerant of poor execution.Kevin Edwards, strategy director, Affiliate WindowI think there are some key fundamental concepts that advertisers should be considering from the outset. No two affiliates are the same so please stop referring to your performance programme as one homogenous mass. Performance marketing is digital in microcosm with potentially hundreds of routes to market so the data will be varied.The advertisers who have been most successful in using data are those who have been clear about what they want to use the data for and developed a clear methodology. One of our largest telecoms clients for example wanted to demonstrate how publisher sales stacked up according to some core customer quality metrics in order to verify and potentially secure additional budget for the channel. They assessed their main volume driving publishers by using network, longer term customer and click path data to build a comprehensive picture from initial interaction through to customer value at various points after purchase.Gary Bicker, managing director, affilinet UKWith the wealth of data available to advertisers it would be futile to try and capture everything thing first and then later consider what is of value. It is much better to be focused from the outset about what needs to be achieved and gather data that is relevant to end goals. Giving these factors due consideration upfront will help advertisers to pre-structure the data, enabling them to not only utilise it more efficiently but also better communicate it. We find advertisers are particularly keen to gain insights into customer touch points, best-selling products, devices and channels as well as factors influencing total basket value or drop-off rates. Knowing this information can help to inform their strategy and ultimately optimise their performance marketing activities.Could data be shared more across the process? Could advertisers share more data with affiliates?Kevin Edwards, strategy director, Affiliate WindowWe’re always on the lookout for data to pore over. It’s surprising how few advertisers have internal resources to crunch the numbers and we see it as an extension of our service. Plus there is still confusion about the precise quality of publisher traffic and sales, so getting inside the data usually helps to dispel these myths. We’re happy to take general digital data, not just performance, and produce insights both leading to the sale and post-transaction. One of the big challenges is then what we do with this data and how we use it to optimise campaigns. There is a general truth though in the more data we have the greater the number of ways we can cut it to produce better targeted promotions and offers. However it’s important advertisers see this as a chance to optimise rather than reduce commissions!Gary Bicker, managing director, affilinet UKIn short, yes. Often different marketing disciplines 'hold' different segments of data, meaning that in many circumstances a picture may only be at best half complete. Many brands are now seeking to create a more collaborative environment across the marketing mix in order to try and fill in the gaps to generate better insight. The tricky part is that working collaboratively together is reasonably new and many rightly view the data they hold as their competitive advantage. As an industry we need to recognise the value in sharing information and how it can drive up the value of what we do. Carla Arrindell, client services director, OMGAbsolutely. There’s a level of MI that is integral to enabling an affiliate strategy to effectively support the wider digital mix, but this is not always forthcoming. It can mean that the performance channel doesn’t benefit brands as effectively as it could. Also, as the need for quality customers increases, the level of data required to truly optimise increases too. Everything from mosaic profiling right through to conversion at each touch point, and lifetime behaviour of the customer are really key for publishers to be able to deliver the best results possible for a brand. In many cases, the issue is not the willingness to share the data – many brands can’t easily access the level of MI required, which prevents robust optimisation.Matt Bailey, commercial director, Performance Horizon GroupThe increased use of data is essential and inevitable within performance marketing. Firstly for advertisers to truly understand the true value of sales being driven by partners; simply saying that all sales are the same is no longer good enough. Data will need to be viewed in conjunction with the brands internal data as well as across different media channels. In addition, brands will have to start sharing data with affiliates. Brands will start to embrace increasingly sophisticated strategies and ask affiliates to do different things for them. Access to data is an absolute necessity for this.These questions were asked as part of a performance supplement with the 14 December issue of The Drum.

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