Guest Post: Five trends in 2014 for performance marketing

by Dan Cohen, regional director at Tradedoubler

The impending start of a new year [2014] helps to spark the debate on what will be hot for the year ahead in performance marketing. Here at Tradedoubler, I believe that there will be five key topics of conversation in 2014. These will be: – the value chain; traffic; data; pricing models; and regulation & compliance. Below are the reasons why I think this is so.

The value chain

Indicators show that e-commerce spend will continue to grow. The impact of the smartphone and how it is supporting the change in consumer behaviour is indicative of this growth.

The smartphone is enabling the traditional in-store purchase journey of the persistently connected consumer to be hi-jacked at the last moment.

So, the future of performance marketing is bright. However, for the industry to reach fruition it must move up the marketing value chain.

It will be critical in 2014 that performance marketing is on the agenda of the C-suite.

“Advertisers need to know what ad medium consumers were influenced by”

Traffic

Unsurprisingly mobile traffic on the network will continue to grow.

What will be an interesting trend to watch, though, is the growth in integrated on/offline traffic which will become an integral part of the advertiser’s affiliate programme.

Consumers will continue to embrace social, video and offline (for example, pay-per-call). It will be more important than ever for advertisers to be able to track the diverse path that a consumer may take in making a purchase.

Add to this, the growing demand for local affiliate marketing with geo-targeted vouchers and deals, and understanding the user journey and their path to conversion better, is suddenly critical.

Data

Next year [2014] the big change for the performance marketing channel will be understanding the full customer journey.

Having the data to understand how the customer first started their engagement and where they ended it will be crucial.

Advertisers will need to know what advertising medium consumers were influenced by, to what extent that medium influenced them, and at what point in the purchasing decision.

For example, was it while checking out a promotion on their smartphone, watching a video, or participating in a social forum?

Likewise, advertisers will be able to use the data to analyse how to get value out of the consumer in the long-term.

This will be achieved by educating them through ‘long-tail’ channels (such as blogs and newsletters), as well as in the short-term (through initiatives like voucher codes and cash-back).

By having the data on the lifetime value of a consumer, advertisers will be able to make intelligent, insight-based decisions, so they can become more effective at new customer acquisition.

Pricing models

Performance marketing will continue to embrace the traditional pricing models. However, as advertising campaigns evolve we will need to incorporate CPE (engagement) and CPV (view) into the pay-for-performance mix, to accommodate consumer engagement trends.

Marketers are including a broader mix of marketing mediums into their digital advertising campaigns, to include video and social for example.

They are also keen to optimise campaigns with re-targeting. So, the technology needs to be in place to: – track variable traffic activity; set the parameters for the ‘cost-per’ type prior to the campaign commencing; and accurately charge for it.

For the advertiser it’s about being able to effectively manage their budget with maximum insight, have presentable metrics, and prove the return-on-investment through an increase in sales. It’s the responsibility of our industry to have the technology in place to accommodate this.

Regulation & compliance

The performance marketing industry has lacked formal regulation and this has been an issue for a while.

It stops advertisers placing their trust in performance marketing networks and publishers, while also preventing the industry from gaining its rightful credibility.

With a pay-for-performance payment model, performance marketing is one of the few marketing mediums where you pay based on the result.

However, it’s often seen as an afterthought in the marketing mix.

The industry must come together to create a blueprint for best-practice with a formal code-of-conduct, and implement an accreditation programme, with a regulated audit process for guaranteed compliance.

This will assure the future of our industry.

Author biog

Dan Cohen is currently regional director with Tradedoubler having held several other key posts within the company before such as Network director for the north west and head of the publisher development team. Cohen joined Tradedoubler UK in September 2011 to establish a new Publisher Development Team, which went on to win two publisher-voted prizes at the 2012 Performance Marketing Awards. With more than eight years of experience in digital marketing, he has held senior roles at dgm and TMP Worldwide, plus a variety of strategic roles across media companies such as ITV, Chrysalis Radio and GWR Radio.

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