By Jeff Kamikow
Performance marketing has gotten bad rap in recent years. Maybe some of it was earned: performance channels were fraught with fraud. Affiliate networks were filled with offshore marketers who seemed to have a penchant for illicit, black-hat tactics. Furthermore, bots and scams abounded in the space, leading to a fall from grace for this high-return marketing practice.
Performance marketing never really went away, though. Even when fraud was at its worst, some of the world’s best-known retailers and credit card companies, among many other businesses, were still working with partners on a CPA-basis. And why not? If you can ensure your ads are appearing on high quality sites and delivering results, why pay on a CPM basis if you have the option to pay per click, per lead or per sale? That’s why Amazon, Target, eBay and Walmart all offer affiliate marketing programs.
Performance Marketing Has Its Advantages
Per The Drum, “There’s no question that the channel is here to stay and provides remarkable, highly consistent ROI. Just last year affiliate marketing drove a 14 to one return for every $1 in marketing spend according to a digital adspend study by PricewaterhouseCoopers (PwC) and the IAB.”
The evergreen benefits of performance marketing haven’t changed over the last 12 years, regardless of the change in environment. Apart from the fact that it just works, those benefits include:
- Broad reach: Advertisers can extend their reach exponentially by partnering with trusted media companies, agencies or affiliate networks to place their ads across targeted websites.
- Accountability: As with all digital channels, analytics can tell you which ads are driving the most revenue, giving you the opportunity to optimize and continuously improve performance over time.
- Incremental revenue from diverse streams: Think of your affiliates as a virtual sales team working on commission. They will help drive up your sales, and often, they’ll come up with some great ideas to help your business – and theirs – increase revenue.
- Affordable acquisition: Whether your goal is sales, downloads, clicks or leads, you set the cost in performance marketing. When you only pay per action, every dollar spent is a dollar earned.
What’s Changed for the Better
In recent years, there have been two huge innovations in digital advertising that have led to the growth and improvement of performance marketing. The first is the influx of data into digital advertising. Data has become our new currency. With our own first party data and third-party data, we can learn so much about audience behavior – it practically becomes a roadmap to successful advertising. We can learn so much about customers who already buy our products, and find more people like them online. We can also learn a great deal about customers who are buying competitor products, and what it would take to win them over. Data is literally gold in digital marketing and advertising.
The other earth-shattering change has been the adoption of smartphones. Where, in the past, marketers have been limited to reach consumers in the time they were at their desks, we can now reach them anywhere and anytime. But that’s just one benefit! Mobile also gives us new data sources by which to find potential customers and exciting new ways to engage them.
Using location data, we can learn which mobile users go to Starbucks every day, who goes to the gym four times a week, and who frequents the mall. These behaviors help to build profiles that marketers can use to target new customer. (For example, the gym-goer might be an ideal target for Reebok or Gatorade ads.) We can also use location to target in real-time, so we can tell if someone is near a Starbucks, then target them with an ad aimed to drive them into the store.
Smartphones also deliver new advertising opportunities, including in-app ads. This is a fantastic way to reach an already-engaged user! Rewarded video is a huge trend (wherein game users are offered points or other in-game rewards in exchange for watching a video) that offers a great opportunity for advertisers. Interstitials, native ads and banners of all kinds can also perform well – and the best performers are always the ones that put data to good strategic use.
Fraud is Still a Concern, But It Always Will Be
Fraud will always be a problem in digital advertising – as it is in just about any industry. The good news is that the industry is getting smarter. For every bad actor, there is a technology company that’s got five really smart staffers tasked with staying ahead of fraud. And, in addition to the technology companies, media companies and publishers are also getting smarter. That isn’t to say that the big bad bots aren’t still out there – just that we’re catching them a lot sooner than we used to. The attack on fraud is coming from all sides, and as the industry coalesces around fraud protection, the networks will be harder to penetrate and the penalties will get stiffer.
Cross Audience is committed to delivering high-ROI mobile performance campaigns across a network of premium publishers. We use the highest-quality data – our own and others’ – to ensure campaigns are reaching the right audiences, and we work with industry leaders to keep fraud out of the campaigns we run. We believe that performance marketing is still good, and that for many businesses, it’s the absolute best way to advertise online. We’ve even got the case studies to prove it. Talk to us today to find out how it can work for you.