12
STATE OF PERFORMANCE MARKETING 2017 1
www.adroll.com
CONTENTS2
4
6
8
10
12
14
16
18
EXECUTIVE SUMMARY
METHOD
PROGRAMMATIC ADVERTISING
RETARGETING
MOBILE RETARGETING
EMAIL MARKETING
ATTRIBUTION
FULL-FUNNEL PERFORMANCE MARKETING
CREDITS
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STATE OF PERFORMANCE MARKETING 2017 3
Introduction
In previous editions of this report, our primary focus was on how industry professionals approach the concept of programmatic advertising. While this is still important, the industry, as well as marketer knowledge and skill sets, have evolved. This year, instead of focusing solely on programmatic advertising, we expanded our research and interviewed 350 performance marketers across Australia, New Zealand and Singapore to understand how they’re advertising to each stage of the marketing funnel and how they they utilise and coordinate various channels and technologies in unison to achieve their goals.
Attribution is king
It was clear from last year’s State of the Industry Report that marketers had a long way to go with attribution. That all changed during 2016, as attribution was one of the most discussed topics in digital media. Industry professionals have intensified their interest in marketing measurement, in order to better evaluate their efforts and optimise their decision-making process. While the majority of marketers currently rely on first- or last-click models, 74% reported that they plan on changing their approach in 2017. To underline the importance of this point, 30% of Australian marketers reported spending the majority of their budget on measurement alone.
Email marketing becomes dynamic
Originally, email marketing consisted of drafting one piece of content and sending it to a large, varied batch of recipients. Over time, marketers evolved to more behaviourally triggered campaigns which grouped users into similar audiences. Now, this trend is being taken even further with campaigns that include dynamic content personalised to the individual user. In fact, the majority of marketers stated that their email campaigns are now dynamically based on user behaviour, meaning their email sends will populate with specific content based on the actions a person has taken online.
EXECUTIVE SUMMARY
Programmatic continues to shine
In addition to these new insights, some of the trends from years past persist. For example, marketers have continued to embrace a programmatic approach to digital marketing with over 30% responding that they are currently investing more than half of their budget in programmatic initiatives alone. Additionally, over 80% of marketers state that programmatic advertising results in a greater return on investment (ROI) than traditional media buying.
Conclusion
One way to characterise the overall trends we’re seeing is that the technology is actually starting to line up with the promise and the vision marketers have had for many years but didn’t necessarily have the tools to deliver. We’re seeing real world applications of machine learning, automation and data-driven decision making. So where are we in the evolution of technology and its ability to solve marketer challenges? What attribution models are marketers moving toward? How are strategies changing to ensure ads reach prospects at each stage of the sales funnel? What challenges are marketers seeing when creating mobile campaigns? We’ve compiled the answers and provided even more insights into how modern marketers are approaching digital advertising in 2017.
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STATE OF PERFORMANCE MARKETING 2017 5
METHOD
PRIMARILY MID-SIZED COMPANIES
l <100 Employees l 100–500 Employees l 500–1000 Employees l > 1000 Employees
40%23%25% 12%Saas/Software/Technology
Retail
Financial Services
Travel
Healthcare
Media And Entertainment
Education Or Government
Agency
Other
TYPE OF COMPANY
27%
5%
5%
13%
26%
6%
5%
9%
4%
68% Primarily B2B
32% Primarily B2C
65% Agency
35% Brand Direct 35%21%
APAC MARKETERS SPEND THE FOLLOWING AMOUNTS OF THEIR MARKETING BUDGET ON DIGITAL MARKETING:
28% 15%
l No budget l Under 25% l 25–50% l 50%–75% l 75-100%
1%
marketers, business owners and executives.350 of respondents spend over half of their marketing budget on digital marketing.Over 40%
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STATE OF PERFORMANCE MARKETING 2017 7
PROGRAMMATIC ADVERTISING
PERCENTAGE OF MARKETERS WHO EXPECT THEIR PROGRAMMATIC BUDGET ALLOCATION TO INCREASE IN 2017
APAC Marketers69%
Australian Marketers77%
New Zealander Marketers49%
Singaporean Marketers61%
of APAC marketers report that programmatic advertising results in greater ROI than traditional media buying.82% of APAC marketers are familiar with paid social
advertising.99%
Programmatic advertising involves the buying and selling of advertising space in real time. Companies like AdRoll help automate this process, while optimising the placement and performance of these ads. With programmatic marketing technologies, advertisers can ensure that the right message is served to the right consumer at the right time, without having to pull all the levers themselves.
Performance marketers have rapidly adopted this practice in recent years. In 2013, when this survey was run in the US, only 7% of marketers dedicated more than half of their budget to programmatic. By 2015, that had increased to 11% across ANZ and in 2016, 32% of respondents acorss APAC were spending over 50% of their budget on programmatic. What’s perhaps the most surprising is that the number of marketers reporting they spend less than 10% of their budget on programmatic has fallen from 40% to 6% over the same time period. Conversely, under 35% of Australian marketers spend the majority of their budget on search marketing efforts.
Programmatic ties your ads to the web, social, mobile and beyond
But programmatic isn’t just contained to the web; marketers are able to programmatically serve ads to customers via desktop, social channels like Facebook or even their inbox. In fact, 77% of marketers claim they are either very familiar or extremely familiar with programmatic advertising and 40% decided to run programmatic advertising across social channels.
32%61%6%
11%68%21%
YEAR-OVER-YEAR INVESTMENT IN PROGRAMMATIC ADVERTISING
2016 Marketers
l <10% of Budget l 10-50% of Budget l >50% of Budget
2015 Marketers
of marketers are very familiar to extremely familiar with programmatic advertising. No APAC marketers reported having no knowledge.
77%
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STATE OF PERFORMANCE MARKETING 2017 9
Retargeting stands as one of the most effective ways for marketers to convert their window shoppers into buyers and was the first breakout use case for programmatic advertising since it delivers such clearly measureable ROI. Retargeting leverages behavioural data from your site or app to deliver personalised ad campaigns. While it fits in well with any performance marketing tactic, advertisers reported using retargeting to fulfil multiple campaign objectives.
Following on from last year, the majority of marketers still view social media as the hottest topic in retargeting, while email follows closely behind. Looking into the next year, almost 90% of marketers are planning on either increasing or maintaining their retargeting spend.
RETARGETING
THESE WERE THE MOST COMMON OBJECTIVES FOR RETARGETING:
↗ Brand Awareness
↗ Lead Generation
↗ Social Engagement
↗ Lead Nurturing
↗ Driving New Sales
↗ Customer Retention
RESPONDENTS THOUGHT RETARGETING PERFORMED THE SAME AS, OR BETTER THAN, THEIR....
Display Campaigns79%
77%
Search Campaigns83%
76%
Email Efforts82%
70%
l AU l US
of marketers are using retargeting.100%
The average APAC marketer is spending between 25% and 50% of their online advertising budget on retargeting.
THE MOST POPULAR CHANNELS FOR RETARGETING
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STATE OF PERFORMANCE MARKETING 2017 11
Why so hesitant?
When considering cross-device campaigns, marketers can be deterred by several challenges, including a perceived lack of users converting on mobile and an inability to track campaign performance. Also, 23% of our marketers said that mobile advertising has yet to develop a good user experience.
Retargeting isn’t just limited to channels that perform well on desktop. Now technologies are enabling marketers to take their retargeting campaigns cross-device. The majority of marketers are already aware of how crucial mobile retargeting can be to driving net new conversions.
The majority of marketers we surveyed said they’re already taking their retargeting campaigns across devices. And over 83% of them plan to increase their mobile retargeting spend in 2017.
MOBILE RETARGETING
TOP KEY PERFORMANCE INDICATORS (KPIs) FOR MOBILE RETARGETING
App Installs27%
Mobile Conversions20%
Increase In Overall Reach
Extension Of Social Strategy To Mobile User Base
17%
11%
Integration With Other Digital Campaigns13%
WHY AREN’T YOU RETARGETING ON MOBILE?
Mobile advertising has yet to develop a good user experience.23%
My customers aren’t mobile.23%
Mobile analytics are not reliable.
I don’t know how to measure attribution.
20%
11%
I don’t have an app.13%
of APAC marketers are currently retargeting on mobile.77%of marketers plan to increase their mobile retargeting budget in 2017. (US 75%)83%
Debunking the myth of mobile ads
While many people may worry that the mobile advertising experience is detrimental to their brand, user behaviour is beginning to debunk this myth. As mobile sites and mobile-first social apps like Instagram rise in prominence, ads are beginning to gain widespread acceptance across the mobile landscape.
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STATE OF PERFORMANCE MARKETING 2017 13
The resurgence of email
As marketers are applying programmatic technologies originally developed for paid media into email, they are extending the reach of their advertising efforts. Many are looking to capitalise on the high ROI this channel provides in new and interesting ways. In fact, 80% of marketers surveyed in this year’s report claimed that their email campaigns are dynamic based on user behaviour, expanding their aims beyond traditional batch sends.
Most marketers choose to run campaigns with multiple marketing objectives and each objective typically varies from business to business. Loyalty sends are the most popular, with lead generation and cross-sell offers coming in close behind.
One thing marketers had success with in 2016 was figuring out how to integrate their email campaigns with their other marketing efforts. Over 80% of all those who were surveyed said that they are either integrated or very integrated.
EMAIL MARKETING
IS YOUR EMAIL MARKETING DYNAMIC BASED ON USER BEHAVIOUR?
Yes80%
70%
No17%
23%
I Don’t Know3%
7%
THESE ARE THE PRIMARY MARKETING OBJECTIVES FOR APAC MARKETERS’ EMAIL CAMPAIGNS:
Loyalty41%
Lead Generation33%
Cross-Sell/Up-Sell
Customer Retention
Customer Education
26%
15%
7%
Lead Nurturing16%
WHAT DOES A SUCCESSFUL EMAIL CAMPAIGN LOOK LIKE?
35%
27%
14%
13%
11%
34%
26%
20%
9%
9%
2%
35%
27%
14%
13%
11%
34%
26%
20%
9%
9%
2%
ANZ 2015
APAC 2016
l AU l US
Engagement
Direct Revenue Generated
Open Rate
Cross-Sell And Up-Sell Sales
Leads Generated
Engagement
Direct Revenue Generated
Open Rate
Cross-Sell And Up-Sell Sales
Leads Generated
Open Through Conversions
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STATE OF PERFORMANCE MARKETING 2017 15
Attribution is critical to marketing success because how you measure the impact of your advertising determines if you spend more efficiently. And in the digital paradigm, almost everything is measurable.
Trends year-over-year continue to show that marketers are placing more and more importance on marketing analytics and attribution. When we surveyed our customers, we heard this point loud and clear. Of the marketers we spoke to, 79% believe attribution is critical or very important to marketing success. Over 30% of Australian marketers said that they spend over half of their yearly budgets on campaign measurement. Despite this, we’re still seeing many marketers place too much importance on the seriously outdated single-click attribution models.
The solution
While many marketers still value single-click attribution models, these models are problematic in that they only measure a portion of your audience—those who click. They discount altogether the much larger audience of internet users who make a habit of never clicking on advertising.
A simple alternative to last-click attribution is blended attribution. This incorporates customer touchpoints, including both views and clicks of ads, before the purchase. This metric retains the simplicity and immediacy of click-based attribution, while accounting for the cumulative effect of views.
ATTRIBUTION
↗ 76% of marketers use a third-party attribution partner to measure campaign success.
↗ Over 70% of marketers are still using a single-click attribution model, but 74% plan on changing their attribution model in the next 12 months.
↗ 99% of marketers track view-through conversions.
↗ Over 30% of Australian marketers spend over half of their budget on attribution and measurement.
WHAT WEIGHT DO YOU ATTRIBUTE TO VIEW-THROUGH CONVERSIONS?
l 0%–9% l 10%–24% l 25%–49% l 50%–100% l We don’t count VTCs
ANZ 2015
25%39%18% 12% 6%
APAC 2016
29%33%5% 32% 1%
HOW FAMILIAR ARE YOU WITH MARKETING ATTRIBUTION?
l I use a multi-touch attribution model and analyse how channels contribute to the overall marketing mix.
l I track attribution on most of my campaigns and analyse the results.
l I track attribution, but I’m not sure how to effectively analyse the results.
l I think attribution and analytics are important, but I’m not sure where to begin.
l I don’t know anything about attribution or analytics.
ANZ Marketers 2015
22%42%17% 12% 7%
APAC Marketers 2016
16%39%39% 4% 2%
Australian Marketers 2014
18%48%23% 8% 3%
PERCENTAGE OF MARKETERS WHO FIND ATTRIBUTION IMPORTANT OR CRITICALLY IMPORTANT TO SUCCESS.
2014 2015 2016
AU ANZ APAC AU NZ SNG
74%81% 78%79%62%36%
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STATE OF PERFORMANCE MARKETING 2017 17
The full-funnel perspective gives marketers the opportunity to adjust the approach to and measurement of their campaigns according to where a prospect is in the buying cycle. Because customers require a different approach at every stage of the funnel, it’s important to adjust your marketing strategy accordingly.
The customer journey refers to the path that prospects take from brand awareness to conversion. Although each customer’s journey is different, you can generally break it down into upper, middle and lower funnel. Upper-funnel campaigns consist of brand awareness and prospecting campaigns. Campaigns that move down through the middle of the funnel aim to convert prospects and activate up-sell opportunities, while campaigns at the very bottom of the funnel aim to retain and grow existing customers.
FULL-FUNNEL PERFORMANCE MARKETING
HOW DO YOU ALLOCATE YOUR MARKETING BUDGET ACROSS THE CUSTOMER BUY CYCLE?
Prospecting For New Customers36%
21%
Paid social media 35%
Organic social media40%
Programmatic display advertising 36%
Traditional media buying15%
Paid search16%
Organic search10%
Events11%
Converting Prospective Customers26%
46%
Activating/Up-Selling Existing Customers18%
24%
Retaining Existing Customers/Driving Loyalty20%
9%
l ANZ 2015 l APAC 2016
WHEN TRYING TO ATTRACT NEW CUSTOMERS, THESE WERE THE MOST SUCCESSFUL CHANNELS FOR MARKETERS:
Marketers use many different channels in order to attract and convert customers at each of these different stages.
While certain channels may work best for certain customers, the important thing for marketers to remember is that they should try to extend their reach to as many different customers as possible. This includes running campaigns across multiple channels and across many devices.
Organic social media9%
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STATE OF PERFORMANCE MARKETING 2017 19
Sources
AdRoll, State of the Industry: A Close Look at Retargeting and the Programmatic Marketer, 2014.
AdRoll, State of the Industry: A Close Look at Retargeting, Programmatic Advertising, and Performance Marketing, 2016.
CREDITS
About AdRoll
AdRoll is a leading performance marketing platform with over 30,000 clients worldwide. Its suite of high-performance tools works across devices, helping businesses attract, convert and grow their customer base. The company is home to the world’s largest opt-in advertiser data co-op, the IntentMap™, with over 1.2 billion digital profiles. AdRoll’s goal is to build the most powerful marketing platform through performance, usability and openness.
AdRoll is headquartered in San Francisco, with offices in New York, Tokyo, London, Dublin and Sydney. Learn more at www.adroll.com.
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