December 2013 Archives
Defining The Next Generation of Performance Marketing
What exactly is performance marketing? Historically, it has been easy to define. Its objective was to drive a specific action, and advertisers only paid when that action, such as an acquisition or sale, was completed. Performance marketing included search advertising, pay per acquisition, email marketing and more. This was in contrast to brand advertising where the objective was to build awareness and payment was typically based on impressions (CPMs) or sponsorship.
Recently many different types of campaigns and programs are being called “performance.” This is in large part due to the development of programmatic buying and other technological platforms that allow for more opportunities in real-time measurement and optimization. As many have pointed out… in the future all digital marketing will be classified as “performance.”
As a result, a new vision is emerging of what is performance marketing. A group of more than 15 members of IAB’s Performance Marketing Committee have put together what we believe to be the new definition of performance marketing in the context of today’s digital landscape.
Here is a preview.
Requirements for a Performance Marketing Campaign
- The intention of the campaign is to drive consumer action, as opposed to raise awareness
- The cause and effect between the advertising and consumer action can be clearly measured
- The buyer can optimize their buy in real or near real-time based on the measurement
- In many cases payment is made based on consumer action (this is not necessarily required if the other three criteria are met)
The closer the performance action is to a sale or transaction, the more accountable is the outcome.
The most important component of a performance marketing campaign is the performance action that is being measured, optimized and potentially monetized. The closer that consumer action is to the sale or final transaction, the more likely it can be used to calculate a true return on investment. For example, a lead form or phone call is closer to a sale than a social engagement.
Real-Time or Near-Time Optimization is a key ingredient to continued growth in performance marketing.
Real-time bidding (RTB) has been a part of search engine marketing for a decade, and is a growing quickly in display advertising. It is now a central component in today’s digital marketplace, growing to more than $3 billion (estimated) in 2013 and expected to more than double again in the next few years. We expect that real-time performance optimization will move in lockstep with RTB over the next few years.
Download the full IAB Digital Simplified: Defining Performance Marketing in Today’s Digital Landscape PDF here.
On behalf of the IAB’s Defining Performance Marketing Working Group, we’d love your feedback.
About the Authors
John Busby, Senior Vice President, Marchex Institute and Co-Chair of IAB Performance Marketing Committee
In a din of daily tweets, press releases and stories covering the media space, some stories deserve more attention than others. Here are 8 signs of the times that digital publishers should peruse and ponder as they head into 2014.
It’s been widely anticipated that mobile will overtake desktop traffic for most publishers in 2014. One by one you see brands like ESPN announcing that this milestone has already occurred. Publishers need to be ready for the implications of a mobile first world. New ad solutions and new business models are required. If you don’t have a strategy for mobile yet (and you should), it’s critical you get one before 1/1/14.
With this move YouTube should be poised to capture a large amount of the volume of investment spent on video advertising since they are now being seen as more friendly by marketers and their agencies. Anybody in the video advertising space knows that transacting on Nielsen OCR or comscore VCE is not an easy proposition since it can result in serving ads against impressions that don’t count towards the advertiser campaign goals. YouTube’s move is a big signal that these forms of currency are fast becoming the norm.
It’s important to ask if Yahoo thinks Couric will drive more 18-to-34-year-old news hounds to Yahoo News? Probably not. However it will make it easier for Yahoo News to earn a place in the White House press corps, secure big news gets, and help to continue to position Yahoo as more than an aggregator. Ditto with Maria Bartiromo. Her presence may not drive immediate ratings or hurt CNBC, but it will certainly attract high level exclusives and in the long run, potentially switch momentum.
The expansion of Rolling Stone content into country music is a sign that all publishers (online or off) are looking at new ways to get into businesses that are adjacent to their core business models. Every publisher should be going through the same exercise and making similar moves into adjacent businesses. As other examples of this, CNN recently launched a platform to share Instagram photos direct from the field, called Scenes, and dozens of publishers are publishing their content directly through Flipboard. These are the kinds of innovations each publisher should be seeking out.
In August Google quietly announced that it was going to transact with viewable impressions. The current proposed viewable impression definition is still only a recommendation from the Making Measurement Makes Sense consortium made up of the IAB, ANA, and 4A’s. Google’s running ahead with what they’re calling ‘active view’ as a currency that viewable impressions are something that every publisher needs to pay close attention to because it is absolutely going to become table stakes for ad campaign budgets moving forward.
When hundreds of people descended on Washington to attend the FTC’s review of native advertising it signaled not only that native advertising was big (eMarketer estimates say it’s a $2.36 Billion market) but that it’s something the industry needs to get its act together on and self-regulate. Publishers should go out of their way to make sure readers are not confused on the difference between editorial content and advertising content. Proper labeling is the key. If publishers label paid content as coming from an advertiser, there should be no more confusion. If they do that, there should be no more FTC hearings. The IAB recently released their native advertising guidelines which is a first positive step to tackling this problem/opportunity.
Early in December in New York City a first of its kind summit around the visual web occurred. The “Visual web” feels like it’s the new new thing. One only needs to look at the rise of Pinterest, Instagram, BuzzFeed, Tumblr and others to know that a picture is worth more than 1000 words. Publishers are actively redesigning for feed and gallery formats. Native advertising can be simplified with and an embrace of images over text is a way to communicate this. The emergence of the visual web is a big deal.
While CES is only a few weeks away it’s safe to assume that the Internet of things is going to receive a tidal wave of attention coming out of this massive gathering in sunny Las Vegas. It’s hard to predict what digital publishers will do in this new ecosystem but it’s safe to assume that marketers will be looking for ways to bring their products and services into the home and workplace and non-conventional, non-media driven ways.
Andrew is the CEO and a co-founder of Studio One and co-chair of the IAB Content Marketing Task Force. Previously, Susman was an executive at Time Warner and Young & Rubicam. In addition, he serves on the boards of the Advertising Educational Foundation, and Business for Diplomatic Action. A native of Missouri, he is also a certified sharpshooter and is a major supporter of the ASPCA.