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THE DRUM DEC.14.12 www.thedrum.com pERfoRMancE03

W elcome to The Drum’s review of the performance marketing scene, or should that be the affiliate industry sector? How the industry defines itself

has become one of the major challenges it faces.Kevin Edwards of Affiliate Window – one of this

supplement’s sponsors, along with A4u – told The Drum: “This year has fostered a growing debate about the affiliate channel and whether it’s time to rebrand ourselves within the broader church of performance marketing.”

It seems like a semantic distraction, but many argue it is also conceptually important. Said Edwards, “Performance is what we’ve always done and now everyone else wants in, so perhaps we should rebrand to something that’s instantly recognisable. Affiliate marketing has suffered in the past from reputational issues largely due to lack of investment in the channel. But all of a sudden it finds itself flavour of the day, representing a transparent and extremely cost effective route to market.”

He also argues that in these tough economic times,

accountability and measurability have also forced their way further up the agenda and traditional affiliate marketers are well placed to capitalise on both.

He said: “Performance marketing as a term also fits well with a couple of other trends. The industry is growing up and with maturity comes professionalism. We’ve created an exceptionally strong self regulatory framework for the channel via the IAB’s Affiliate Marketing Council as well as launched our own initiatives to address wider digital legislative moves.”

And of course another key trend, which we also highlight in this supplement, is the publisher brands who are moving centre stage as they capitalise on the years of hard work invested in building large, engaged databases of consumers. They now represent mainstream, retail brands in their own right.

So it might be time for advertisers who have neglected performance to take a fresh look, as it’s a channel burgeoning with confidence and infinite opportunities. You can see more of Edwards’ analysis overleaf.

timE to rEthink pErformanCE?

conTEnTS

04 performance changing shapeAffiliate Window’s take on the changing landscape of performance marketing.

07 Value and awarenessChris Johnson, content director, A4u, writes on the increased recognition of performance.

08 Trusted brandsThe Drum explores some key issues from a branded affiliate perspective.

13 Industry Q&aAgencies and networks gauge the key trends affecting the performance industry.

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04performance www.thedrum.com DEC.14.12 THe DrUm

Performance marketing is in many ways a digital chameleon, adapting and evolving according to the ever-expanding range of technology available. As a commercial

beast, it also keeps a very close eye on consumer trends with the ultimate aim of merging both.

The emergence of the incentivised consumer is probably the most obvious example of how performance marketing has fuelled innovation while responding or indeed creating a heightened awareness amongst consumers that the internet empowers them to make savvier decisions about how and what they buy online.

This has snowballed in 2012 with publisher brands cementing themselves in the wider public’s consciousness. Take Quidco, TopCashback, MyVouchercodes, VoucherCloud and VoucherCodes.co.uk for example: strong retail brands in their own

right, shopping destinations that boast engaged consumer databases in the millions.

They offer access to a rich vein of customers that retailers want to tap into and this year has seen them open up additional routes to market, so it’s now possible to run a controlled, targeted campaign with these publishers using one, some or all of the marketing channels available. This extends into traditional desktop through standard CPAs, tenancies, hybrid and lead based offers as well as mobile commerce and app based avenues, not to mention bridging the gap between offline and in-store.

This in itself is both an opportunity and a threat. The opportunity is in understanding the whole raft of promotional channels and aligning them with the ever-changing priorities many advertisers have. The threat is in getting it wrong or being unclear as to the benefits of each offer.

One of the key areas now much more widely understood within performance marketing is that controlled testing within a channel of infinite opportunities is of paramount importance. We have worked with several of our clients more recently for example to test cashback rates to appreciate where the ‘sweet spot’ is: the optimal amount that delivers both decent volume and customer quality.

As in everything, the data is the powerful element and the industry needs to get better at how this is shared and interpreted. A significant telecoms client of ours has been working with us for the past two years to provide granular insight about the top publishers on their programme. This has taken into account the path to sale and then what happens afterwards. They haven’t looked at the programme as a whole, instead recognising the promotional methods of their top partners varies and therefore the traffic cannot be

Performance marketing is constantly evolving and tying together the needs of advertisers and consumers alike. Kevin Edwards, strategy director, Affiliate Window, takes a look at the changing shape of performance.

PErformAncE chAnging shAPE

performance05THe DrUm DEC.14.12 www.thedrum.com

Performance marketing is constantly evolving and tying together the needs of advertisers and consumers alike. Kevin Edwards, strategy director, Affiliate Window, takes a look at the changing shape of performance.

PErformAncE chAnging shAPEtreated in the same way. Customers are at different stages in the purchase cycle and there is also an appreciation that publishers, even though categorised in the same group, tap into different demographics.

In doing so, they have found that customer churn at various milestones post-sale through all their key publisher partners is significantly lower than other digital channels. They have upweighted payments for publishers appearing earlier in the purchase cycle who may not ultimately be rewarded on a last click attribution basis in order to recognise contribution. They’ve also tested the impact of additional tenancies and coverage across publisher pages to show how they drive incremental sales as well as enforce branding. They concluded that the channel is one of the best at driving good quality customers who are receptive to being upsold to.

Data in this sense has been fundamental in targeting

budget to drive the right type of sale for this advertiser. The impact is two-fold: it increases the engagement with publishers as well as performing a great internal PR piece to secure additional channel funding.

It’s a source of frustration to us that more advertisers aren’t linking our data with other channels as well as overlaying customer quality metrics. It’s happening, slowly, and we have noticed the number of advertisers looking for this knowledge is ramping up. Companies shouldn’t be afraid to do it. Whilst the data can’t lie, it usually throws up some fantastic performance insights.

There is little doubt that 2013 will continue to see mobile shape the performance agenda. Our traffic and sales from handsets and tablets have jumped fourfold from middle of 2011 and it’s now a tangible chunk of revenue that only the most foolhardy advertiser and publisher should ignore. What’s fascinating is the

wildly varying patterns that are emerging based on publisher and advertiser, proving again the intricacies of the channel. We’re seeing the percentage of mobile sales for some travel advertisers barely scraping a single percent, whereas for some email publishers pushing daily deals, they’re comfortably tracking upwards of 20 per cent of their revenue from handsets. As we head into 2013, performance marketing is in rude health with new territories to conquer. Those who succeed will, as ever, be those who invest both time and effort in order to understand the infinite variety and changing complexions of the channel. Do both and performance marketing will continue to force its way further onto the digital agenda.

Kevin Edwards, strategy director, Affiliate Window

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performance07 THe DrUm DEC.14.12 www.thedrum.com

In the ten months since the last performance marketing supplement aired within this publication, the sheer pace at which innovation has continued to drive the industry

forward is almost at exponential levels. It’s pleasing to see more levels of dedication to the channel through the expansion of performance marketing departments not only at agencies but also internally at advertiser HQs. You need only view the winners of 2012’s Performance Marketing Awards ceremony to see the likes of Littlewoods, Flybe, The Body Shop, Argos, New Look, Phase Eight, Virgin Atlantic and Sky who have been rewarded for success with their performance-based partners. Even this year’s shortlists displayed over 60 advertisers and 20 agencies – a number that we fully expect to increase for 2013.

The rise of mobile related sales coming through the channel is not surprising following Deloitte’s forecast that £3.5bn of Christmas sales are set to be influenced or purchased on smartphones. Aside from the issues surrounding mobile affiliate tracking, which I’m sure you will hear about during this supplement, the opportunity to engage with the growing area of agile commerce is here and now.

Not only are we seeing significant traffic and ultimately revenue through mobile, but coupled with this mobile rise are new publisher-led innovations that are capturing consumers at later stages of the purchase funnel. Innovations that are encroaching on traditional advertising mediums and using sizeable data analysis to create fully personalised consumer experiences.

For example, Quidco are influencing purchase decision offline, targeting their users when shopping in the high street. How? Through offering in-store Cashback delivered with push notifications, targeted to select users following a combination of user profiling, data trawling and personalisation.

The most successful publishers in the space, those driving hugely significant revenue, are still the voucher, loyalty and incentive demographics. However what has changed over the past 10 months is a concerted effort by many publishers to firmly align their web properties to deliver an increased user experience that complements a brand’s core values. An increasing number are now assisting in the overall brand awareness, visibility within search and even driving an increase in in-store sales for brands.

Aside from the high-volume publishers, there is renewed hope for SME and content publishers to benefit from assisting brands with building awareness, running bespoke campaigns and generating content to engage and ultimately improve search visibility. When supplied with proactive ideas and content on how to promote a brand, success can be gained from working across a larger number of publishers who proved smaller amounts of traffic and revenue but added value.

This is something that Geidre Guntulionyte, customer acquisition manager for luxury brand Reiss, has to consider. Due to the brand’s representation within the market as an affordable luxury brand, it is unable to offer discounting via codes. The brand is still discoverable as a retailer on partner websites who do offer discounting, however Reiss is selective with its above-the-line advertising and digital marketing partners and therefore looks to publishers who can take into account the brand’s values alongside brand awareness to increase sales – both online and in-store.

Thoughts that are echoed in the majority by Mark Haviland, managing director of Rakuten Linkshare UK. As a network, Rakuten Linkshare focuses primarily on brands that need a performance marketing programme that communicates not just products, discounts and deals, but the full brand experience; replicating online what a shopper would see in-store.

Haviland said “The browsing experience that

shoppers now expect online is content-rich, diverse and sophisticated. Through a CPA (cost per acquisition) network, brands can utilise the latest technologies, techniques and partnerships to provide shoppers with an online shopping trip that they will enjoy – rather than a merely functional website. A performance marketing programme can add value here through its extensive network of publishers. Brands can ensure their content is appearing on platforms such as blogs, apps and lifestyle publications, helping buyers make decisions about what to buy by ensuring they see relevant content in the right place, at the right time.”

Knowing that there is a huge opportunity for commercially sensitive brands to engage with the channel, performance marketing is being taken more seriously than ever before at present day. A channel that offers a commercially viable, clever and astute business model of commissioning on a performance basis is a cost-effective solution that ensures all stakeholders involved are an integral part of the sales process. Whilst adhering to brand values, stakeholders are creatively harnessing data, technology, personalising user experience and delivering correct brand messaging, all sharing the same goal of acquisition.

A4u has been fundamental to the growth of where performance marketing sits within today’s digital mix. Over the past 10 years we’ve continued our passion to grow, professionalise and educate those involved with the market as a publication, research portal, discussion forum, organisers of the largest performance marketing events across Europe and, new for 2013, our inaugural performance marketing conference in the USA.

This industry doesn’t shy away from excitement, and the advances made year-on-year deserve the recognition it’s beginning to achieve at current day, as the wider digital mix fully warms up to performance based marketing.

Chris Johnson, content director, A4u, reflects on the advances made by performance marketing in the past year, resulting in increased recognition within the marketing sphere.

VAlue, AwAreness, DiVersity AnD sophistiCAtion

08PERFORMANCE www.thedrum.com DEC.14.12 THE DRUM

BRANDSThe increase of branded affi liates has increased consumer and advertiser confi dence in performance marketing. The Drum spoke to three such affi liates – Quidco, Savoo and VoucherCodes – to get their views on how the industry is evolving.

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The IAB Advertiser Affi liate Survey recently found that 61 per cent of advertiser respondents plan to increase their marketing spend in the affi liate channel in 2013, refl ecting growing confi dence in

performance marketing. The shift of affi liates becoming brands in their own

right is one potential reason for increased trust in the channel, with affi liate sites such as Quidco, Savoo and VoucherCodes becoming household names across the UK. Where previously performance marketing may have been seen as a niche channel, undervalued in comparison to the rest of the marketing mix, it is now becoming mainstream with the growth in popularity – and consumer trust – of affi liates. As a result, big name advertisers are beginning to understand the importance of an affi liate programme and the measurable, trackable results it can achieve.

So what role do branded affi liates play in future advertiser investment in the channel? Andreas Andreou, commercial director, Quidco, argues that branded affi liates are key to ensuring longterm investment from advertisers.

“Some advertisers, rightly or wrongly, tend to cap affi liate budgets. Branded affi liates will be key to unlocking these budgets. As Quidco expands and develops across other platforms, including mobile, in-store and social media, budgets can be unlocked from other areas of the business to help drive additional advertiser investment.”

Ed Fleming, head of PR and partnerships at Savoo.co.uk, cites the importance of Google in online brand building for affi liates.

“Google is paying less emphasis on EDM domains, which therefore means sites like Savoo andQuidco, that do not have a keyword in their name, now have more of an opportunity to build anonline brand and rank higher in SEO.”

Further to that, Fleming says, Savoo is seeing increasing amounts of brands paying tenancy – arefl ection that brands recognise the value with affi liates is “more than just CPA”:

“We are offering millions of eyeballs every week and advertisers don’t want to miss out on them.”

VoucherCodes.co.uk co-founder Max Jennings argues that “differentiation is key” in the highlycompetitive performance sector and that “sites that can successfully make the transition from a step inthe purchase cycle, to fully formed brands are in a great position to own the space next year.”

SHARING OF DATAData is key to the success of performance marketing, but what do affi liates see as a priority in terms of the data they have access to? Would they like to see more sharing of data from advertisers?

While many affi liates are proactive in sharing data with partners, “there are very few advertisers that share data with their publishers”, according to Quidco’s Andreou: “We naturally have a lot of data because we track data such as onsite user journeys, customer activity, usage and share of wallet. Advertisers are eager for this data as it can help shape their activity. What’s more, this data can become even more powerful when there is synergy of data sharing between both partners.”

Fleming argues that data sharing is essential because

affi liates are “not mind readers”. Understanding what’s selling well on a retailer’s site is vital for the affi liate.

“For a deal site like Savoo it doesn’t even have to be ‘big data’”, explains Jennings. “We are currently offering retailers deal intelligence reporting on a regular basis (so affi liates can share data too) which is offering retailers opportunities to refi ne and optimise deals to create better ROI and conversion.”

THE ROLE OF VOUCHER CODES & CASHBACKWhile they are very popular with consumers, can voucher code and cashback affi liate sites truly drive incremental value for advertisers?

Ed Fleming argues that the answer lies in the ability of such sites to control the user journey, increasing order values, cross selling and creating new customer acquisition. “But going a step further,” he says, “we [VoucherCodes.co.uk] are becoming more of a multichannel destination site; offering incremental reach via channels like e-mail, social, community and apps, all of which can help the advertiser when it comes to creating incremental value.”

Meanwhile, Andreas Andreou argues that the transparency of the channel means it is easy for advertisers to identify incremental value.

“Affi liate marketing is a very transparent market – far more so than TV, print or broadcast marketing. This transparency and the reams of data available within the industry make identifying incremental value a fairly straightforward process.”

With regards to driving new customers, increasing basket values and aiding customer retention, Max Jennings argues there is a lot of evidence that voucher codes “drive a considerable incremental value”.

WHAT’S NEXT?So what’s on the radar for affi liates going forward into 2013? Max Jennings highlights mobile tracking as a key issue.

“Mobile tracking will be a hot issue in 2013. Levels of traffi c to retail sites from smart phones and tablets continues to grow unabated, however the technology required to track across mobile channels has not kept pace with this growth.

“Over the next 12 months we’ll see smart new solutions to support traditional affi liate tracking models as mobile becomes an increasingly important channel for UK retailers.”

Another key issue for affi liate sites is keeping abreast of Google updates, as highlighted by Ed Fleming:

“For Savoo, SEO is crucial. We are always asking ourselves what Google’s algorithm is going to do next, and trying as hard as we can to ensure the changes we make to the site are what we think Google wants from an affi liate. To that end UX and design are crucial for us in 2013.”

Lastly, education will be key for affi liates as they try to gain access to greater portions of the marketing spend. Ed Fleming says it’s important that “retailers understand the value and professionalism of businesses like Savoo”, while Andreas Andreou explains:

“Rather than spending budget in areas that drive little return and fewer incremental sales, our aim is to show our retailers how they can work with Quidco in a more measurable and effective multichannel way.”

Kate Hill, online marketing manager,Whittard of Chelsea

Why does performance marketing work for Whittard of Chelsea?There has always been a natural demand for the fi ner things on the Whittard of Chelsea menu, however as a business, we understand the need to engage in third party marketing activity in order to grow our consumer base and capitalise on this demand.

As a key digital channel, performance marketing can be a win-win situation whereby we incentivise the affi liate and in turn they incentivise the customer. We claim the sale, the affi liate claims the commission and the customer gets to walk away happy with their special Whittard purchase. Utilising the affi liate channel is also a quick and effective way to launch new products, ranges, promotions and news updates with minimum effort and large consumer reach. We work hard at Whittard to build relationships with all our performing affi liates so that at the end of the day everybody works that little bit harder and as a result we see a substantial uplift in clicks, impressions and conversions week on week and year on year.

How do you use data?All data is plotted, analysed and segmented on a daily, weekly, monthly basis so we understand who our customers are and which affi liates have brought them there. It is important for us to understand each affi liates channel and their ultimate reach and what promotions work. Sometimes activity works and other times it doesn’t – it’s a dynamic thing and we have to constantly test to understand the potential.

What do you think is the key issue for advertisers looking to increase ROI with performance marketing?Performance marketing is a fast moving channel which is prone to changing trends – it all depends on what the customer wants and how they choose to shop. Last year was a great year for voucher code sites, this year cashback sites have grown into their own and next year we could see a completely different picture. I think the most important thing is to really understand each type of affi liate, what their buying power is and how they target the consumer. Be careful how you incentivise affi liates – always work any spend back to return as a justifi cation and never keep all your eggs in one basket. Advertisers should always question whether tenancy will give the required return, they should manage CPA increases with caution and always ask themselves what value each affi liate can bring to their programme. It should always be a reciprocal arrangement.

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SPECIAL REPORTMODERN PERFORMANCE

SUPER SALES PIPELINEHOW PERFORMANCE IS DELIVERING

TAKE PART IN 2013Next year The Drum will be focused more than ever on Search and Performance Marketing. Beginning in February our quarterly dedicated Search and Performance Marketing magazines launch.

Taking a deeper look at industry trends, important updates and o� ering client advice these magazines will be the essential voice for the Performance and Search industry. Leading industry voices will determine where it is going, from the ever-increasing influence of mobile, to the emergence of digital technologies.

To find out more and make sure you are speaking to clients contact James McGowan on 0141 559 6072 or james.mcgowan@thedrum.com

THE DRUM DEC.14.12 www.thedrum.com pERfoRMancE11

The Drum puts the performance marketing industry to the test, with a cross-section of experts in the space commenting on the major trends and challenges on the industry’s radar.Q&A

What is the biggest challenge facing the industrygoing into 2013?

Chris Johnson, content director, A4uEducation. It’s always a challenge to push the success of performance based marketing

to others who don’t have knowledge of what is a fairly new industry. I believe advertisers need to attain a good grounding of the subject in order to become a channel advocate, promote it internally and gain more budget for their activities.

David McDermott, performance director, 7thingsmediaThe biggest challenge comes from within the industry itself. The performance channel has

campaigned relentlessly to (quite rightly) be viewed as an all-encompassing sector that brings multiple channel touch points and not to be viewed as a silo. This is now the case, but it cannot be viewed as another media buy; true campaign success is still as a result of hard work and understanding all the intricacies of the channel and how best fit to reach an advertiser’s objectives.

David J Brown,co-founder and CEO, Ve InteractiveIt’s two-fold, firstly, the role of agencies versus performance marketers, which is merging and

secondly, how both perform when more attributed and segmented data is available. The industry shape will be very different in a year’s time and the winners will be those who swim out to sea and then ride the surf all the way to shore, as opposed to those who are frightened to surf at all for fear of losing sight of the land they know.

Nicky McShane, managing director, AffiliateTraction UKThe key challenge ahead centres around accountability. With tag management and

attribution becoming more prevalent, the clock is definitely ticking on the value of all digital channels.

The growing focus on data will no doubt help us with this clarity, as although advertisers are regularly using attribution from an internal perspective, it’s only a matter of time before we see brands utilising data more strategically from an external viewpoint and that’s when it will be time for performance to stand up and be counted.

It’s therefore imperative we keep a balance on where traffic is coming from and specifically ensure there’s not too much reliance on certain affiliate types. The industry needs to be wise.

Richard Sharp, UK MD, ValueClick Media In our industry, attribution is always going to be an issue. With the different models

available, and publishers offering different things, we need to ensure we are getting attribution models right.

Another challenge is cross platform measurement. We need to ensure mobile strategy and affiliate strategy are tied together and there are no breaks in the path to conversion when one user uses multiple devices.

There is always a threat that brands will find themselves with dumbed down campaigns that are not delivering the performance and value for money that they could be achieving with the right level of investment in data analytics. So for brands, the biggest challenge is understanding what they are being sold and what the

best options for their particular requirements are.

Stephen Kerin, managing director, Webgains UKThe growth in big data has provided brands with a wealth of information on

consumer behaviour. For many brands however there is still something of a question over how best to use this data.

Over the next year, many advertisers and publishers are likely to invest their energies in finding ways to leverage the rich data available to improve end results. As this begins to happen we are likely to see campaigns become even more tailored for individual consumer behaviour.

12performance www.thedrum.com DEC.14.12 THe DrUm

THE CHANGING ROLE OF SOCIALSocial media’s role in the performance channel is open to debate. While clearly brands must have a social media strategy for brand engagement, what’s not clear is the role of social in the performance channel, and the level of return brands can or should expect, and indeed what, if any, metric or model can be used to measure the success of social. So, what opportunities does social media bring for advertisers?

What part does social media play in a performancemarketing context? How will this change in thecoming year? How can advertisers drive salesdirectly from the channel?

Dan Cohen, market unit leader, TradedoublerThe most forward thinking brands are seeing the benefits of social media. Customers,

employees and partners will always be the best

Is there a problem with brands not implementing mobile tracking?

Gary Bicker, managing director, affilinet UKWhen you consider that only 10 per cent of the top one million Quantcast domains are mobile optimised, I think the challenge is a lot bigger than just tracking. Statistics released across the industry on a daily basis regarding mobile sales clearly demonstrate that consumers are changing the way they shop, but unfortunately many businesses are not reacting quickly enough. It’s now become paramount that advertisers create mobile sites and ensure they include tracking to accurately report on mobile activity. Unfortunately it’s the tracking that is often overlooked in the initial development process, which means that advertisers are unable to reward publishers for driving traffic to their mobile sites. There is still a lot of education required about the necessity of doing this.

ambassadors for your brand. Harnessing the power of the consumer voice on social media can drive sales, boost revenues, reach consumer audiences that may lie beyond the reach of traditional digital marketing, support highly targeted marketing campaigns, deliver valuable consumer data, build and enhance brand reputation and allow a brand to quickly identify and respond to negative content.

It is a trend no marketing department can afford to ignore but one of the key challenges will be to really understand consumers’ ‘social voice’ and how it differs from our established marketing conventions.

Chris Johnson, content director, A4uThe debate around whether social media has sizeable commerce potential is still ongoing,

and I believe it will continue over the coming year. The main sticking point is the ability to fully measure the value of social activity; shares, likes, comments, fans – and judging their true worth as part of a full e-commerce outlook. We’ve seen a number of technology start-ups that are providing a social commerce tracking platform, but development is ongoing.

Carla Arrindell, client services director, OMGRight now, social media remains unproven as an acquisition channel, but as the

performance model continues to mature, and retention becomes equally important, social media will make a significant contribution.

The power of social is all about engagement, and we’ve already seen market leading brands like AVIVA engage their customers through incentive campaigns via social media, achieving improved retention rates as a result. We see this as a trend that is likely to grow.

Richard Sharp, UK MD, ValueClick MediaSocial media continues to offer both huge potential and significant challenges. Twitter’s

new offering of campaigns tuned by user interest is an interesting development, but Twitter and Facebook are spaces where consumers remain far more sensitive to commercial messages; any unsolicited communications runs the risk of being treated as an intrusion of privacy.

However there is no escaping the fact that the audience reach is vast and the potential for brand engagement is huge if the right combination of targeting and tone of voice can be achieved.

Brands need to be clear about the different roles Twitter and Facebook play. Twitter is broadly speaking a news platform. Facebook is ‘personality’; it can be more thoughtful, retrospective, creative and tonal. It is therefore more of a brand-building platform. Twitter is about impact and tactics.

The big challenges to face over the coming year or so will be measurement and analysis of social media performance. Measuring social media engagement in the same cookie space, paid media can enable brands to analyse the value of a fan/follower/like and the inverse of this. The incremental value of engaging with Facebook and Twitter fans could then be integrated in marketing strategies and consequently it would be possible to analyse the value that social media has on customer journey paths.

performance13 THe DrUm DEC.14.12 www.thedrum.com

affiliate statisticsDATA AND PERFORMANCEData 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?

How can advertisers make better use of data indriving 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.

Nicky McShane, managing director, 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 are focused on accountability, which means data is becoming increasingly important.

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.

The clock might be ticking on the value of all digital channels, but performance marketing in particular really needs to understand where it sits in the food chain.

Richard Sharp, UK MD, 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 consumers. 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.

Gary Bicker, managing director, affilinet UKWith the wealth of data available to advertisers it would be futile to try and

capture everything 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?

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!

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14performance www.thedrum.com DEC.14.12 THe DrUm

MOBILE – NOT JUST ANOTHER CHANNELIt’s been said for years, but 2013 is finally looking like it will shape up to be the ‘year of mobile’. From a digital marketing perspective, brands need to ensure their mobile strategy fits across all platforms and devices, ensuring brand consistency.

What opportunities does the growth in mobile present for performance marketers?

Gary Bicker, managing director, affilinet UKWith £3.5bn of 2012 Christmas retail sales to be purchased on or influenced by

smartphones according to Deloitte, it’s impossible to ignore the potential of the channel. Indeed some of the companies we work with were early adopters and are already reaping the rewards. Ebay, for example, expects to drive over 10 billion dollars’ worth of mobile transactions globally in 2012.

As a network we are definitely witnessing a shift in the way consumers interact with brands online and in particular we see the potential of mobile in closing the loop between on and offline.

One of the key challenges – and opportunities – associated with mobile is making a connection via the small screen. However, if done correctly, mobile offers a great opportunity for advertisers to engage with their customers in a more personalised manner and in a relevant context. Those that deliver the most seamless experience, via no matter which channel, will be the most successful at driving sales.

David J Brown,co-founder and CEO, Ve InteractiveWith mobile now recognised as a significant channel for online commerce, the

opportunity to develop true multichannel campaigns is now greater than ever before. Interfacing with a potential customer across multiple devices is now the new standard. So many merchants are ill-prepared to deliver content, analyse data and react to the channel through which consumers finally transact or meaningfully interact, so the performance marketer who is armed ready to perform for their merchants across all channels is the performance marketer that will prove to be the most valuable and will therefore win business.

Tina Judic, managing director, FoundThere is a huge amount of opportunity in this space, and we’re already experiencing

this. In some ways, the simplicity of mobile campaigns is the ability to mimic performance marketing models that have worked for years on desktop and take them across to mobile.

However, it doesn’t just stop there. Mobile presents so many unique opportunities in its own right, particularly in the adoption of models that harness new customer intent, such as local, and the integration of models with mobile functionality, such as the ability to call and download apps.

The key thing to understand with mobile is that it’s still growing, it’s still new, it’s not saturated and there are so many opportunities to harness. Mobile is very much on the move, instant action-focussed with more and more transactions occurring online.

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.

What impact is the beta launch of Universal Analyticshaving on the performance marketing industry?

Richard Sharp, managing director, ValueClick MediaUniversal analytics allows publishers to see the data from their sites across all devices,

meaning businesses can get a better understanding of their marketing investment and performance of content across all digital channels. However, in a marketplace where data delivers trading leverage, brands might be about exposing all their data to one entity.

Stephen Kerin, managing director, Webgains UKGoogle Analytics’s release of Universal Analytics does bring benefits to brands

using performance marketing. Through collecting data on user behaviour across multiple devices, Universal Analytics offers brands greater visibility over consumers’ paths to purchase and can further evidence the value publishers can add. It also offers valuable insight into the usage of mobile and tablets and demonstrates the importance of a comprehensive cross channel approach when it comes to achieving an effective online strategy.

What part does social media play in a performance marketing context? How will this change in the coming year? How can advertisers drive sales directly from the channel?

Tina Judic, managing director, Found

The advancement of paid media in social will begin to open up similar opportunities to those that we are currently seeing in paid media across the rest of the digital landscape. Maturing social companies such as Facebook and Instagram will no doubt push to monetise their assets even further, however the only way they can do this is to give advertisers the ability to further exploit functionally that could assist them in driving traffic that will actually convert. As these improvements are made, performance CPAs will become more and more achievable.

Merchants can work hand in hand with performance marketers to truly establish themselves in this space.

Chris Johnson, content director, A4uMobile has become an outlet for performance marketers to be able to influence the

customer journey at new stages of the purchase and decision-making chain. The ability for publishers to use mobile to drive footfall into high street stores whilst still being paid a CPA for offline sales is a strong proposition today in the area of ‘agile’ commerce.

Carla Arrindell, client services director, OMGCustomer engagement is one of the key opportunities that mobile presents. We’ve

helped our clients leverage mobile activity primarily to drive more customers in-store or to the call centre, which is especially pertinent for brands in finance, telecoms or utilities sectors, where products can be complex and there is a growing need for transparency and the ability to build trust.

We’ve worked with a number of clients to leverage mobile activity, through pay per call campaigns for example, in line with their wider marketing objectives. The ability to cross sell and upsell typically means acquisitions through this channel drive a greater ROI, with some clients reporting 40 per cent higher ROI here compared to other digital channels.

Dan Cohen, market unit leader, TradedoublerMobile devices are transforming the way consumers interact with brands. This has

opened up a new world of opportunity and challenge for marketing departments everywhere, with attention focused on issues such as mobile apps, mobile wallets, NFC and rich media. For some reason, the concept of mobile affiliate and performance marketing seems to have been left in the shadows.

Yet mobile affiliate marketing significantly extends the reach and influence of mobile advertising and marketing campaigns. It generates new and highly qualified leads and underpins highly targeted and tailored promotional campaigns which can be accurately tracked, measured and analysed for business benefit.

Richard Sharp, UK MD, ValueClick MediaAs with any new platform, mobile presents a compelling range of opportunities to

brands. First, we cannot ignore the fact 28 per cent of internet access now comes from mobile devices. But mobile also enables brands to engage with consumers in a much more personalised way and play off the context of where they are at a particular time and how they’re using their handset or tablet.

Social, geo, time of day and the weather, along with desktop browsing and purchasing history, are amongst the many variables that could inform sophisticated display targeting strategies on mobile and could create highly effective campaigns.

But mobile also challenges performance marketers to think more subtly about brand engagement. Mobile devices are a far more personal space so targeting, timing and usefulness are critical themes that should inform our strategies.

performance15 THe DrUm DEC.14.12 www.thedrum.com

Is there a problem with brands not implementing mobile tracking? What are the challenges of mobile tracking?

Chris Johnson, content director, A4uIt’s not necessarily a problem of implementing mobile tracking, but more an understanding

of the need to do so in a timely fashion. Many networks are pushing the need to implement tracking and yet they seem to be met with considerable lethargy by advertisers surrounding the subject. Previously branded as a ‘chicken and egg’ situation, without the publisher traffic going through mobile, advertisers don’t see tracking implementation as a high priority.

Why should publishers send through mobile traffic if it’s not going to be tracked? A change in priority to implement tracking is needed.

Kevin Edwards, strategy director, Affiliate WindowFor Affiliate Window, this has been our absolute number one priority in 2012. If we

don’t get this one right, every other mobile proposition a network talks about is just fluff. We’ve invested substantial resource in ensuring tracking is in place after we estimated publishers stood to lose out on £2m in commission this year through mobile sites not tracking publisher sales. The frustration for networks and publishers alike is the tracking required is a

How can advertisers make better use of data in driving sales through theperformance channel?

David McDermott, performance director, 7thingsmedia The 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.

carbon copy of their standard performance marketing campaign tracking and just needs to be added to any dedicated m-commerce sites. We’ve managed to mitigate the vast majority of revenue loss but there are still some significant advertisers on our networks without mobile publisher tracking in place.

It’s also important to remember that any sales from sites relying on responsive design or advertisers yet to roll out mobile sites will continue to track. The only occasion when they won’t is if a separate mobile platform is created and tracking left off. Advertisers wouldn’t expect to get Google AdWords clicks for free, or not to pay a supplier for work they have done for them, so why should a publisher go unrewarded for their efforts in driving traffic and sales?

Tina Judic, managing director, FoundYes, there’s a huge problem. This slow adoption is already impacting the traffic that

can be driven through this channel for many merchants, limiting the ability for performance partners or affiliates to be truly innovative within the channel. Unfortunately, a lot of merchants back off from mobile site adoption due to cost, complications and effort however, as the traffic and conversions rise through mobile, the sooner those brands who have not embraced mobile will need to react, or risk miss losing out.

The biggest problem that mobile currently faces is tracking and insight. As the channel grows and as users start to switch between multiple devices, the issue clients face is following that user across devices, not just across the web, to understand their path to conversion (or non-conversion). Tag management is becoming simpler and cheaper however we’re still not in a place where a user browsing on a mobile and converting on a desktop is captured as a full journey. Google and Facebook are best positioned to facilitate this understanding in the market but we’re not there yet.

Carla Arrindell, client services director, OMG There certainly is, and it seems to be a common misconception that implementing

mobile tracking is more complex than other tracking configurations, which is simply not true. However, a bigger challenge that brands seem to face is the build and deployment of mobile ready sites, which of course is a key component in ensuring that mobile activity is properly optimised. There are a number of brands out there where mobile tracking is enabled but the user journey is not mobile ready, so conversions are low. Affiliates are becoming less inclined to invest efforts in driving traffic to these campaigns, choosing to focus their efforts on those that have mobile capabilities.

Richard Sharp,UK MD, ValueClick MediaMobile devices do not use cookies in apps and consequently any in-app activity is very

hard to track. It is very difficult to measure a path to conversion through apps, and therefore it is hard to have anything other than a last click attribution model. However, advertisers have started using mobile advertising as a brand-building channel and mobile publishers are developing specific mobile apps for consumers to use which can therefore be tracked.

16performance www.thedrum.com DEC.14.12 THe DrUm

Could data be shared more across the process?

Matt Bailey, commercial director, Performance Horizon GroupThe increased use of data is essential and inevitable within performance. Firstly for advertisers to truly understand the true value of sales being driven by partners. Data will need to be viewed in conjunction with the brand’s 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.

PERFORMANCE PERCEPTIONS/PREDICTIONS

Is there still a perception that performance marketing is ‘grubby’? If so, how can the industry shift this perception?

Carla Arrindell, client services director, OMGThe ‘grubby’ perception is one that we’ve moved a long way from, but it is still true

to say that the channel isn’t yet consistently treated with the respect it deserves. As an industry we need to continue working to convince brands to give adequate resource, expertise and attention the opportunities that

performance marketing delivers, and the work that the IAB is doing is crucial to reaching a broader audience and raising the profile of what the performance channel can achieve. And we’re seeing this having a positive impact – some of our leading brands have already established teams focused on ‘test and learn’ budget specifically for the affiliate channel, which we support across a range of initiatives, and we anticipate more will adopt this methodology.

Matt Bailey, commercial director, Performance Horizon GroupAmongst senior marketers at large brands and agencies there is still this perception. It

is changing but we need to become more transparent and become more proactive in attempting to shift this mindset. For too long, performance marketing has isolated itself from others and subsequently doesn’t have a seat at the top table when discussing strategy. Personally, I think agencies will play a big part in putting the spotlight on performance and driving innovative strategies, thereby debunking the grubby perception.

Stephen Kerin, managing director, Webgains UKThe tag of ‘grubby’ is these days redundant. Performance marketing not only offers

brands a substantial increase in their reach, but crucially enables marketers to see exactly where their sales are coming from. The reporting offered by performance marketing endows brands with full control over the activity their affiliates are undertaking. Furthermore, if marketers choose to run their paid search or retargeting through the affiliate channel, the same level of monitoring can be applied. Performance marketing allows marketers to demonstrate a tangible ROI and can now deliver up to 30 per cent of a brand’s online revenue, so is an increasingly significant channel.

David McDermott, performance director, 7thingsmediaNo, I do not think that there has been a

perception of this term for a number of years – except when referencing the original comment. We are fortunate to work in an area with potentially unlimited boundaries and the pace of innovation (good or bad) is forever trying to be caught up by regulation. By this very nature the performance marketing industry drives more good than harm, which is referenced by the largest brands (Apple, Ebay, Amazon, Dell, Nike and even ASOS to name a few) all having performance marketing campaigns.

How can performance continue to innovate?

David McDermott, performance director, 7thingsmediaPerformance marketing is continually

innovating; whether this is quantifying the value of the partnership or developing new ways to reach consumers. Technology is ultimately driving innovation and, as consumers, our media consumption is continuing to fragment with new ways to experience media. Therefore innovation will continually develop to reach these new audiences – remember the App (iOS) store is only four years old and this has spawned thousands of innovative approaches; the key is not innovation but to find a way to link everything together.

Chris Johnson, content director, A4uThere are more opportunities to influence the customer journey across the many

channels within performance marketing than ever before, and naturally there are companies filling these gaps with technology solutions. We’re at a stage where commerce is becoming more agile on a daily basis. More mobile sales, more agile-driven offline sales (rewarded with CPA) and more analysis of data to increase personalisation are just a few

performance17 THe DrUm DEC.14.12 www.thedrum.com

avenues that performance marketing is innovating on year-on-year, and I don’t see that changing over the foreseeable future.

Gary Bicker, managing director, affilinetI think the very nature of the performance industry attracts innovative people and

businesses, which is what makes it such an exciting space to work in. Naturally networks, publishers and new players in the market will continue to innovate with technology, however I think the most interesting innovation to come will be in the way that we work. This will largely be driven by the use of data to create insights in order to ultimately drive valuable sales and acquire new customers. As alluded to earlier in the article this will require a degree of industry collaboration.

Matt Bailey, commercial director, Performance Horizon GroupPerformance marketing will continue to evolve, that is not what we need to worry

about. New marketing models will invariably gravitate to performance as it’s an easy way of getting a foot in the door with brands. The challenge for me lies in examining data to get a full understanding of how to cope with new models, integrate them with existing ones and make full sense of it for brands.

Richard Sharp, UK MD, ValueClick MediaThe three strands upon which performance marketing is built are technology, data and

service. Data is very much at the core of what we do and I see some of the biggest innovations over the coming year and beyond being in this field.

The performance marketing sector is constantly changing, with new technology such as augmented reality and geo-targeting, and with platforms continuing to innovate and provide new areas for affiliate to move into, this is an incredibly exciting time to enhance performance marketing returns.

As publishers become bigger, they are investing more into the research and development of their platforms to maximise their ROI, and ensure they are growing with the market. But experience and know-how is much under-rated in our industry. Businesses that focus purely on automation may find they lose out.

Stephen Kerin, managing director, Webgains UKThe performance marketing model is inherently innovative in as much as it is

driven by a network of affiliates each finding their own solutions to the challenges of the market. Many of these affiliates are specialists and can do a great deal to advance a brand’s strategy in different areas, including paid search, mobile, retargeting, remarketing and social media.

Every year is heralded as the year of the mobile, and while we’re perhaps tired of hearing this, there is in fact, more truth in that statement each year. The role ofmobile and tablets will become more significant, and we’ll no doubt see a huge increase in the number of actual sales taking place on mobile devices. Thisopens up a wealth of opportunities for publishers to innovate and it’s important that they embrace this.

What is the next big thing for performance marketing?

David McDermott, performance director, 7thingsmediaClearly mobile is playing a large part within

the performance marketing industry and will continue to be the focus in 2013 as more advertisers understand the various roles that mobile devices play. Augmented reality and near field communication (NFC) will spark further innovation linking the high street to online.

Nicky McShane, managing director, AffiliateTraction UKFacebook and Twitter have become part of our everyday culture, and now not only

represent respected forms of communication, but useful business networking tools, trusted opinion former mediums and most significantly, hugely influential lifestyle forums also.

It is here where performance and social could now successfully come together, responding to consumers’ more savvy approach to purchase where they actively investigate best deals, locate cashback or voucher discounts, and specifically take other’s recommendations into consideration.

The rise and popularity of social media has created one of the largest untapped aggregators of engaged consumers, and for marketers focused on their return on investment, performance is the perfect transparent and highly effective marketing discipline to tap into the huge sales potential of ‘word of mouth’ recommendation.

The challenge for the industry will be how it can monetise social without turning it into another commercial advertising platform and possibly tarnish or even lose the very informal, welcome and open ‘word of mouth’ existence that glues the whole channel together.

Kevin Edwards,strategy director, Affiliate WindowWithout wanting to sound non-committal, the next big things are the things that other

channels and disciplines are exploring. We’re seeing a raft of new mobile opportunities. It’s fair to say new performance ideas tend to be packaged as a variety of opportunities across multiple platforms and channels rather than a single big idea. Aside from this, the work that some of the more engaged advertisers have been carrying out around data will ramp up. We’re seeing more and more requests for better insight and if an advertiser is willing to share the raw data with us then we’ll willingly offer some context for the channel in order to help them make more informed decisions.

Gary Bicker, managing director, affilinet UKWe have seen some marked changes in the online world this year, most notably the

increased discussions around the subjects of mobile and big data. Both of these topics still have some way to go, but in particular I see the use of data to create insights as the most exciting change we’ll witness. Crunching the numbers will enable advertisers to gain intelligence on what products are performing well, at what time of year and with which partners, thus enabling them to negotiate their commercials accordingly and gain a maximum ROI on their budgets.

Will cashback eventually spell the end of performance marketing as we know it?

Kevin Edwards, strategy director, Affiliate WindowThere exists a belief that there was a golden age of performance marketing. I’d

counter it’s a fabrication to say there ever was one. Performance marketing is a movable feast, adapting and evolving according to the digital trends.

It’s also true to say the pool of publishers available to advertisers is larger than ever before. Six or seven years ago publishers were (quite legitimately in some cases) bemoaning how paid search affiliates were stifling their business. PPC as a widespread, viable part of the performance channel waned and a new phenomenon emerged. What people fail to mention is that these publishers have massively grown the slice of pie that performance marketers can tap into whilst driving our channel ever more mainstream. It’s fair to say cashback has changed the landscape, but certainly not to the detriment of the channel.

Clare O’Brien, industry programmes consultant, IABCashback, like vouchers and coupons, is all part of the evolving performance

marketing landscape, which is getting increasingly complex and sophisticated. The IAB’s recent Affiliate Advertiser survey, which we published at the end of November, revealed that the cashback, coupon and voucher sector is now accounting for almost 50 per cent of affiliate advertisers’ prime revenue sources. This is great news for the sector which is attracting significant growth as more advertisers initiate affiliate programmes as part of their online spend. Branded affiliate sites such as Quidco, VoucherCodes.co.uk, Nectar and Savoo have really established themselves in the minds of UK consumers and so it’s no surprise we’re seeing more and more advertiser spend in this sector, increasing performance’s overall share of marketing budgets.

Andrew Copeland, Network Director, North West, TradedoublerI don’t think cashback will result in the end of performance marketing. At the end of the

day, it is the consumer who demands cashback on their purchases, not the affiliate. We’re seeing more of the ‘deal hunter’ mentality, where consumers are becoming progressively less brand loyal as times get tougher.

What will happen, and we’re already seeing the first examples of this, is that brands will use the cashback channel more strategically than they do currently. By this I mean that brands will begin to make a distinction between new and existing customers with the emphasis being placed on new customer acquisition.

Matt Bailey, commercial director,Performance Horizon GroupNo it will not, unless it becomes the be all and end all of performance. I grow increasingly

frustrated that the performance channel is viewed by marketers as a discounting channel, and this is something that needs to be addressed. Cashback has a place but brands should not be over reliant on it, and they should study data to fully understand the impact it has on them.

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THE DRUM DEC.14.12 www.thedrum.com KNOWLEDGE BANK19

The Drum’s performance marketing Knowledge Bank has a wealth of insights waiting for you to tap into. To share your insights in future Knowledge Banks, contact james.mcgowan@thedrum.com.

The Drum’s performance marketing Knowledge Bank has a wealth of insights waiting for you to tap into. To share your insights in future Knowledge Banks, contact james.mcgowan@thedrum.com.

The Drum’s performance marketing Knowledge Bank has a wealth of insights waiting for you to tap into. To share your insights in future Knowledge Banks, contact james.mcgowan@thedrum.com.

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The Drum’s performance marketing Knowledge Bank has a wealth of insights waiting for you to tap into. To share your insights in future Knowledge Banks, contact james.mcgowan@thedrum.com.

20KNOWLEDGE BANK www.thedrum.com DEC.14.12 THE DRUM

Matt BaileyCommercial DirectorPerformance Horizon Group

PERFORMANCE HORIZON GROUPTel: 020 7078 4280Email: matt.bailey@performancehorizon.comWeb: www.performancehorizon.com

As we approach the end of what has undoubtedly been a pivotal year within the affi liate/performance marketing space in the

UK, I wanted to take this opportunity provided by The Drum to look ahead and outline what we at Performance Horizon see as the key trends that will shape the market in 2013. These span widespread recognition, changes in the landscape and a welcome increase in sophistication within the channel by marketers.

Performance marketing goes mainstreamSet to be released in January 2013, the inaugural study from the IAB and PWC aiming to measure the true value of online performance marketing in the UK will provide an incredible shot in the arm for our industry. Having had some insight into what it will demonstrate, I predict that this piece of work will garner headlines far and wide and put performance on the same level as search, social and display within the minds of senior marketers and big brands.

A welcome side effect of this survey will be to fi nally draw a line under exactly how we defi ne ‘performance marketing’. For too long considered either a catch all term for all online direct response activity, or even more damagingly just a rebadge of affi liate marketing, establishing a boundary around performance will succeed in focussing attention and resource.

Networks out – agencies inAs the wider marketing landscape changes with channels that were previously viewed in silos now converging, the ecosystem will change irrevocably. With advertisers now having previously unavailable access into the interaction between different media and consumer touchpoints the role of an agency begins to look very different, which has serious implications on performance marketing.

Whilst agencies were previously focussed on planning and buying which is now largely automated, there is a defi nite shift towards agencies being the analysts; having an overview of the huge amounts of data and making sense of it for clients. How does this affect performance? With a credible technology

solution like PHG’s ExactView available, which allows brands and agencies to take control of their performance marketing strategy, the role of networks starts to be brought into question. With agencies increasing focus on performance and bulking up their resource, we see a continued shift towards brands and agencies working directly with affi liates and direct partners.

Data is the new oilAs Spiderman was once told “With great power comes great responsibility”, and with the increased focus on performance marketing will come a greater requirement to prove the value of the channel. While this activity has been viewed in isolation and advertising is paid only when the money is in the till, it is easy to believe that all sales through the affi liate channel are good for the advertiser.

This is clearly not the case, and into 2013 brands and agencies will demand access to more information to begin to understand the true value of sales delivered by affi liate partners to their business. They will require more access into product data, as well as cross referencing internal data against affi liate sales to begin to determine metrics such as whether partners are driving new or existing customers, the lifetime value of consumers driven by different partners and the margin delivered by each affi liate partner.

This data will also by meshed with customer journey data in order to get a full view on how marketing spend should be attributed. This will have considerable impact on certain types of affi liates, with cashback and voucher code sites having to work hard demonstrate their worth and should see

the ability of traditional content based publishers, eg big newspaper groups, reigniting their interest in this method of monetisation.

Spotlight on fraudWith performance marketing traditionally being such a broad church, it is inevitable that some will attempt to circumvent the rules for personal gain. Affi liate fraud is a big topic of discussion in the US, where admittedly it is more prevalent, but for too long it has been something that is swept under the carpet here in the UK. I foresee, and hope, that this is going to change in 2013 with big advertisers and agencies starting to ask questions and demand answers around exactly what is happening on their campaigns.

There are two types of malevolent activity that occur in this space. The fi rst is criminally fraudulent, such as orders placed with stolen credit cards through affi liate accounts to win commission. The second is activity that is against merchant T’s and C’s, such as brand bidding and delivering forced clicks. Both need to be stamped out in order to give brands the confi dence to invest in the channel.

We have already seen brands cull affi liates on their programmes due to concern about activity amongst the ‘long tail’ of affi liates and in order for this strategy not to spread we need to clean up the industry.

As we look forward, 2013 promises to be an incredibly exciting year and I hope that in 12 months’ time I am able to write a similar article about an industry that has grown in recognition, increased its levels of professionalism and pushed forward to even greater levels of success.

2013: What’s in store for performance marketing?

“AS THE WIDER MARKETING LANDSCAPE CHANGES WITH CHANNELS THAT WERE PREVIOUSLY VIEWED IN SILOS NOW CONVERGING, THE ECOSYSTEM WILL CHANGE IRREVOCABLY.”

THE DRUM DEC.14.12 www.thedrum.com KNOWLEDGE BANK21

Nurturing partners is key for networks

Kevin EdwardsStrategy DirectorAffi liate Window

AFFILIATE WINDOWTel: 0844 557 9240Facebook: www.facebook.com/affiliatewindowWeb: www.affiliatewindow.com Twitter: @Affwin

This year has represented a period of continued growth for Affi liate Window as we consolidated our position as the leading performance

marketing network in the UK. Our advertiser reach has continued with publishers now able to partner with nearly half of the top UK retail brands through our network. Similarly, our advertisers can take advantage of the biggest publisher base with a signifi cant number of exclusive publishers proving day in, day out why the performance industry is such a compelling proposition.

Continued investment in our technology has seen additional focus on some key areas. Compliance controls are something that every publisher and advertiser should expect as standard and too often we see unscrupulous activity go unpunished elsewhere. It damages our industry and holds us back which is why we now have the most comprehensive compliance checks and procedures in the industry. This will remain a critical focus for Affi liate Window as we continue to signifi cantly invest in a range of proprietary and third party solutions.

Mobile commerce as the fi rst frontier of handset performance marketing will also be our primary focus. December 2012 will see us tracking about £15,000 of revenue every hour of every day across the month. Numbers like this are guaranteed to sharpen the mind as to the huge wealth of opportunities mobile offers. Failure to invest isn’t an option and is something we’re pressing daily with our partners. We expect them to focus more keenly on specifi c mobile campaigns, which is why we were the fi rst network to roll out device reporting. Without this information it’s impossible to track the success of any campaign.

2013 will see us introduce additional mobile tools and technologies as we consolidate ourselves as the leading mobile marketing network. As the only network to publish handset and tablet performance across the network through our monthly tracker reports and white papers, it’s imperative that awareness of how performance is at the forefront of mobile marketing is heightened.

One area we’re passionate about is data. As a

network recording millions of sales a month for our 1,700 advertisers we have access to seemingly infi nite rows of information. Stitching that together presents every business with a challenge that only increases with every passing year. With that in mind we remain the only network with a strategy and insight team who have been beavering away for the past three years to share the nuggets that help shape future planning.

It’s fair to say there are many pre-conceptions about performance marketing in the wider digital world. Some of these are less than complementary and in turn we’ve generally been pretty bad as an industry in showcasing our successes. That’s why we’re committed to sharing this data as widely as possible. We’ve been able to explode some myths about voucher coding, demonstrate that consumers transacting through affi liate links are some of the highest quality out there and address concerns about channel cannibalisation. We plan to continue this work in 2013 using additional third party tools to delve even deeper into the data. It’s what clients are now demanding and without it the channel will be marginalised.

We’re always challenged with fi nding the ‘next big thing’. Voucher codes and cashback are now dominant in the channel, so where is the innovation? Dozens of new publishers join our network every day, and while most of them will never break into the big time, it’s imperative we take time to understand and nurture new partners. This is no mean feat; it requires legwork and hours of ongoing support from our publisher team. The largest in the market, the team

is targeted with growing our base of publishers. A network clean up last year helped remove numerous dormant accounts and so while we don’t proclaim to have the largest publisher headline fi gure we know we can partner our clients with quality. That also extends to in excess of 600 publishers who don’t work with any of our competitors. 2013 will see us focus our attentions on helping publishers with potential to partner with our advertisers. We’re

also starting to see a raft of new tablet and handset opportunities launch. It seems no new serious publisher model is complete with a mobile element so expect this to be forefront of everyone’s mind next year.

Partnering with our European sister network, zanox has also allowed us to help our advertisers satiate the growing hunger for British brands overseas. Rarely a week goes by without a native retailer announcing its plans to tackle Europe and beyond. European traffi c for some of our advertisers is already achieving dizzying heights so we’ll be redoubling our efforts in order to offer a natural launch pad for interested advertisers to reap the rewards.

So the industry continues to evolve and Affi liate Window is determined to be at the coalface helping to shape the next chapter in performance marketing. The challenges are daily and networks are being kept on their toes with the threats and opportunities Google, mobile and commercial pressures throw at us.

We believe we’re well positioned heading into 2013 to tackle these challenges with vigour and the passion that has helped cement our position as the number one, natural home for performance marketers.

“THE CHALLENGES ARE DAILY AND NETWORKS ARE BEING KEPT ON THEIR TOES WITH THE THREATS AND OPPORTUNITIES GOOGLE, MOBILE AND COMMERCIAL PRESSURES THROW AT US.”

22KNOWLEDGE BANK www.thedrum.com DEC.14.12 THE DRUM

Chris BishopFounder & CEO7thingsmedia

7THINGSMEDIATel: 020 7017 3190Email: hello@7thingsmedia.comWeb: www.7thingsmedia.comTwitter: @7thingsmedia

Industry The IAB recently released figures stating that this year has seen a 45% uplift in investment from brands in their affiliate programmes. The channel is developing and advertisers are taking note, but there are still many untapped opportunities, Chris Bishop Founder & CEO of 7thingsmedia explores.

The channel has never been in better health. Growth has been as such that affiliates – brands within their own right – now, in some cases, have a bigger marketing budget than the advertisers they represent.

However, despite the year-on-year increase the affiliate channels contribution, share of the marketing mix is still relatively low compared to search and display; why is this?

Perhaps it could be viewed that the channel’s own internal lobbying to be known and seen as a performance channel is limiting the channels role within the digital mix.

For a number of years the affiliate industry stated that it is a virtual risk-free channel where you only pay for what you receive. When financial hard times hit UK brands the industry stated that the affiliate channel was the only true performance channel where brands should invest their last pound because of the revenue return.

And herein lies the problem: if you only view a channel as providing a particular ‘worth’ or ‘role’ within your digital mix, your return will be limited. If affiliate marketing is viewed only as offering a voucher code, people will only use the channel if you offer them a voucher code. Similarly, if performance marketing is only viewed at driving sales at the bottom of the purchase funnel, you will only use the channel to close sales.

The channel can appear complex due to the type and variety of stakeholders. However this factor offers the opportunity for brands to explore partnerships and reach new audiences that they might not have been able to reach with traditional digital advertising.

Henry Ford once said “If you always do what you’ve always done, you’ll always get what you’ve always got.” This can be directly applied to your digital advertising and, more specifically, the view towards the role that each channel plays.

Reason why value might be low Research conducted by Forrester this year found that the majority of people perceive they get a better deal online, and this perception is reason enough to leave their car in the garage and shop on the internet.

Deal shoppers are often considered lower value customers; however this is a common misconception. Salary level bears no correlation to the likelihood of a shopper to use a deal site.

Where we see the value Brands need to see online channels as virtual shopping shelves, just as merchandisers in a shop will ensure every shelf is strategically filled, so should brands view their online campaigns. It is imperative that brands do this and failing to do so could be extremely damaging.

Forrester also found that a third of online shoppers surveyed actually began their online shopping process from an affiliate site, this highlights the influence that affiliate sites hold, being able to influence consumer shopping habits prior to intent.

Branding and direct response Performance is defined by paying on a Cost per Action (CPA). The CPA does not always have to be due to the net result of a sale taking place.

By understanding that CPA does not have to be associated with a sale the channels reach and opportunities can become limitless and underpin the entire marketing mix – online and offline.

Branding can happen within a direct response environment. The only thing that needs to take place is the stake holders understand what the direct response metric is for remuneration.

Where our clients see the value Within the agency our ethos is to challenge assumptions by letting data lead the strategy and not let assumptions lead the strategy.

This means that we do not just focus on one particular channel to achieve the end result but focus on each individual touch point within the purchase funnel – all the time challenging assumptions of a channels role by reviewing the data.

The end result is devising a truly integrated strategy for our clients that do not shoehorn the brand into any one channel, or a channel reporting

to only one set of performance metrics.Our clients now find themselves being able

to immerse their brand more creatively into the performance marketing channel whilst still commonly seeing triple-digit year-on-year revenue growth.

So herein lies the solution: challenge your own perceptions of what the performance channel can provide for your own marketing activities because the opportunities can be limitless.

Otherwise: meet the new boss, same as the old boss.

Meet the new boss, same as the old boss

“IF YOU ONLY VIEW A CHANNEL AS PROVIDING A PARTICULAR ‘WORTH’ OR ‘ROLE’ WITHIN YOUR DIGITAL MIX, YOUR RETURN WILL BE LIMITED. ”

knowledge bank23 THe dRUM DEC.14.12 www.thedrum.com

Rewards don’t need to be costly to implement

Carla ArrindellClient Services DirectorOMG Performance Marketing

oMg PeRfoRMance MaRkeTingTel: 01603 697700Email: carla.arrindell@omgpm.comWeb: www.omgpm.comTwitter: @OMGPM

We know how effective rewards marketing can be and any brand not offering an incentive to customers is likely to miss out on some fantastic

potential to boost sales and engage more effectively with their customers and partners. With a well thought out campaign you can improve customer acquisition and retention or encourage referrals through recommendations. However too many advertisers are passing up the opportunity to improve ROI and customer relationships as they assume an online rewards campaign is too costly and time consuming. This simply isn’t the case.

It’s not just your customers who are rewarded – you are tooAt OMG we’ve created OMG Rewards, a unique incentive marketing platform that is quick and easy to implement and truly affordable. It provides an online rewards management product suite, with a technical solution to support customer incentives & customer retention. Thanks to OMG Rewards any brand can now afford to launch their own incentives campaign. Everything is taken care of for you – from customer registration right through to the fulfilment of rewards, as well as design, build and hosting of content, pages and widgets. There really are no excuses for not running an incentives programme now.

OMG Rewards will enable you to leverage the power of incentive based publishers, regardless of your technical capabilities or user level tracking. It allows you to differentiate, refresh or tailor your offer with little effort or cost. It lets you promote exclusive consumer offers in competitive and crowded sectors and enables you to develop deeper, loyalty-based relationships with your partners and customers direct. The OMG Rewards platform can handle a variety of incentive types including cash-back, own-brand discounts, voucher codes and third party vouchers (e.g. from a high street retailer). OMG Rewards also gives you the ability to offer, track, verify and easily fulfil consumer incentives for purchasing a new product. OMG manage the entire process for you.

The results are the ultimate incentive to run a reward campaignClients across a wide range of sectors have enjoyed phenomenal success with OMG Rewards including brands such as Vistaprint, Lloyds Banking Group, O2 and AVIVA. Here are some success stories to inspire your own reward ideas:

• Leveraging Incentive based affiliates: a leading high-street bank ran a cash-back campaign to encourage the uptake of their current accounts. OMG Rewards ensured the entire customer journey was branded accordingly and provided bespoke data capture fields. The results were impressive. On average the two cash-back sites involved delivered

340% growth quarter on quarter.• Increasing exposure in the Aggregator space: another leading financial services brand were keen to improve their exposure through Moneysupermarket. They offered an exclusive £25 Amazon.co.uk Gift Certificate when customers opened an account via MSM. The new offer was launched by OMG Rewards for a tactical two week campaign. There was a significant uplift of 210% in application volumes. Sales volume increased too by 256%. • Developing a USP in competitive sectors: a well-known publisher in the telecoms sector were keen to differentiate their offering, reinforce their USP to consumers and increase sales volumes to their partners. OMG Rewards developed, hosted and fulfilled the entire reward process. They delivered a co-branded widget to capture data and track activity for an exclusive offer of a £100 Amazon.com voucher when purchasing an Android contract. Sales volumes increased by around 80%.• Leveraging Social Media as an acquisition channel: a leading car insurer ran a particularly engaging reward campaign via Facebook. Existing customers were asked to recommend friends they thought were good drivers and were then rewarded with M&S vouchers. Alternatively customers could upload an image of their car displaying the client’s car insurance sticker and receive vouchers. The solution delivered hundreds of

new customer conversations and contributed to increasing customer retention by 10%.

What should you think about at your next marketing meeting?It’s time to get creative and start thinking about how a rewards campaign could transform your online performance. Now you know OMG Rewards can make it happen for you, there are few basic questions to think about first:

• What do you want to achieve? Is it more sales, referrals, better customer retention? • What reward or incentive will you offer? OMG Rewards lets you offer any reward you want, fulfilled online or offline. Vouchers, cash-back, gifts, you name it. • Are you keen to exploit more than one channel? Do you want to leverage more from voucher code affiliates, gain increased exposure through direct partners, optimise your mobile presence or tie in your call centre or other offline activity?• Why not engage even more with customers and run competitions, leveraging your social media presence?

If you would like to find out more about the possibilities open to you with OMG Rewards call Mark Solway at OMG on 01603 697721 or email mark.solway@omgpm.com. Find out more at http://uk.omgpm.com/rewards/