Transparency is key for the continued growth of performance marketing

Digital advertising is relentlessly fast-moving. The potent mixture of sophisticated technology and endless creative thinking on how to make money from it has created an ecosystem where new models emerge, are tested to the extremes, and systematically reinvented as lessons are learned and applied.

Digital display advertising is a perfect example – the starting point of static banners on websites has spawned an array of increasingly complex opportunities for advertisers. That market has grown, tested the threshold of users’ tolerance, seen advertiser appetites wax and wane, and undergone manifold iterations in an effort to remain relevant and solvent.

And from the straightforward principle that digital technology can be used to capture sales leads for brands, an increasingly complicated performance marketing sector has sprung up – so complicated that it risks alienating the very customers it seeks to serve.

Lead generation and affiliate marketing are disciplines that have suffered, perhaps justifiably, from a reputation for being somehow shady or unintelligible.The source of this problem has been a perceived lack of transparency as traditionally agencies and networks who controlled performance marketing budgets were reluctant to explain their methods, or to disclose their use of technology to deliver results.

Things have since changed. Over the last few years a seemingly convoluted set of processes and relationships between clients, third-party technology suppliers, agencies, networks, publishers, and the end user has slowly been revealed. Such complexity might appear to befuddle the advertiser, but actually belies a growing trend for transparency in the space.

Agency and network dominance is a thing of the past. Like Pandora’s box, once advertisers had a glimpse of the machinery of performance marketing there was no turning back. We now operate in a market rich in advertising technology options available direct to advertisers.

This breadth of choice comes hand in hand with increasingly complicated decisions and it can be hard to know which route to take. But the benefits for the industry and its reputation are significant. Such an open atmosphere increases competitiveness and drives improvements in quality. No one can afford to be complacent in the new world of performance marketing.

According to Jeremy Mandell, CMO of Liquid Invest, advertisers have nothing to fear from the apparent complexity of the performance marketing space.

“Advertisers don’t need to understand the inner workings of the technology,” he says. “They just need to understand the new importance of data and software.

“All marketing is performance marketing – the advent of digital technology has driven a metrics-focused approach to marketing which isn’t going away.

“The approach is now technological. All marketing is lead generation to some extent – when you consider that, high quality CPA and CPL delivered directly through data platforms represents a better business decision from all aspects – ROI, branding, engagement and so on. Advertisers should be looking for sophisticated technologies that can deliver them high-quality solutions.”

For the savvy marketer, the new atmosphere in performance marketing presents major opportunities for success. Knowledge of the options available is a benefit to the advertiser, but there is still work to be done to make sure user data is handled responsibly.

Clare O’Brien is industry programmes consultant at the Internet Advertising Bureau (IAB) and has been instrumental in setting up the Lead Generation Council, a trade body similar to display advertising’s IASH (Internet Advertising Sales House).

“A clear set of standardised best practise guidelines gives advertisers security in the channel, and improves the reputation and overall success of the sector,” she says.

“Advertisers need to know what they’re buying, and companies in the industry need to work together to ensure high standards.”

User data is a potentially valuable asset to advertisers. That value is soon diminished when it is passed between third parties, packaged, resold, and far-removed from its original source. There is an increasing groundswell of appetite for premium data, directly attributable and passed directly to the advertiser. The industry needs to respond.

Melanie Mack, group acquisition director at luxury travel company Abercrombie and Kent, sees the potential for synergy across the complicated performance marketing ecosystem: “Transparency throughout the media chain is absolutely crucial. Most marketers, agencies, technology companies and publishers ultimately want the same thing – to find the best route to market in the most efficient way. The issue is often that the stack of technology, targeting and data capabilities grow faster than the advertiser’s ability to combine the results for actionable insights. Meanwhile, each link in the chain is gamely battling to make their part work well, but without the context that builds the bigger picture, often with less than ideal results.

“We need to treat each other as partners rather than adversaries, and share the seeds that will improve performance for all our benefit. It should also go without saying that this straightforward business approach is also paramount in looking after our customers’ privacy, who will be justifiably appalled if we lose sight of the importance of their data.”

Mary Keane-Dawson (@marykeanedawson) is a digital business strategic advisor and CEO of performance marketing technology company Convertr Media

This piece was first published in The Drum's Performance supplement, sponsored by Affiliate Window. The supplement is available for purchase, or download for subscribers.

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