Performance Evolution: Putting the Brand Budget to Work

While there’s little doubt that last click is still the most-used attribution model, performance marketers are trying multiple models on for size.

Brands are thinking globally and performance marketers are following by not just running campaigns in their own country … or even continent.

Increasingly, mobile is the default mode of consumption for anything digital. Affiliate marketers are a little behind the curve here, but catching up quickly.

Overall, only 62% of all performance marketing offers — coupons, promotions, banners, or even long-form content — are mobile-optimized.

That’s somewhat surprising, given that social media, mobile apps, mobile web, and email are the top four channels respondents are using … and two are completely mobile, while the other two are mostly mobile.

But it’s understandable given that affiliate marketing came of age in the desktop web era — and that models of measurement and tracking can be more challenging in mobile apps than on the web.

It’s clear there’s some work to do here yet.

One thing that becomes extremely obvious when looking at performance marketing: teams are small and lean, and that has implications. A critical one: placing more importance on using great technology with automation tools and strong partner management functionality.

We’re not talking exactly “set it and forget it,” of course.

Performance marketers will always need to pay attention to their campaigns, their metrics, and their partners. But given the time constraints many performance marketers have, affiliate management tools that automate fraud detection, capping and spend limits, and automatically optimize campaigns, can significantly help.

These enable smart teams to focus on relationships, partnerships, and creative execution, rather than all the metrics every hour of the day.

It’s clear that brands are taking performance marketing into places it hasn’t been before.

A quarter of the performance marketers we surveyed are working directly for brands. Many of the quarter that are working for agencies will manage some of their campaigns for brands.

And we’re seeing the change too, at HasOffers. “We’re seeing our customer composition diversify,” says Cameron Stewart, Chief Operating Officer at TUNE.

This new relationship allows brands to do what they do best while enlisting the aid of performance marketers who are experts in multiple niches.

One particularly interesting use we’re seeing a lot of recently is brands employing a performance marketing solution like HasOffers to manage their customer loyalty programs.

Rewarding customers for activities that result in new customer acquisition is a no-brainer, but rewarding customers for increasing share of wallet is also part of the mix. Many of these programs are managed internally, but if external partners can help brands, enterprises, and retailers find new ways of delivering more value from existing customers for brands, that unlocked value can be shared.

Interestingly, loyalty programs are the fastest-growing partner type right now, according to the performance marketers we surveyed.

It’s important for brands considering using loyalty programs as part of their affiliate marketing mix to monitor them for truly incremental revenue, whether from existing customers or new customer acquisition, and whether it’s an in-house program or one with external partners.

Loyalty programs can significantly enhance profitability, but programs that are poorly managed, constructed, or monitored can simply result in cannibalization, and therefore reduced margin.

This is just one place where a real relationship — and the right management platform — can help.

Business development programs, once the sole domain of high-end and expensive BD reps, are starting to take advantage of scaled, performance-based partner-driven activities.

Fourth on the list of fastest-growing partner types, business development services use affiliate-style techniques to shake up the slow, expensive world of high-value deals. We see this working especially in the development of two-sided marketplaces, like car sharing services or accommodation platforms.

Marketplaces like these exist to bring demand and supply together, and performance marketing-style business development can help achieve both at scale and at speed.

Influencer platforms are clearly hot. But they’re only fifth on our list of fastest-growing partner types, which highlights a certain ambivalence in the performance marketing space.

One potential reason is measurement. Or, rather, the lack thereof.

While affiliate marketing lives and dies by measurement, influence campaigns have historically proven challenging to track. In some cases, this is due to platforms — Instagram is the most popular platform for influencers, at least for consumer products, and Instagram’s long-standing lack of linking ability might be part of it. And some influencers have resisted direct measurement, saying that the act of linking removes some of the organic appeal of the micro-celebrity endorsement.

Moving past these issues will be key in enabling influencer marketing — which really, has been around for a very long time under different names — to achieve its full potential.

In fact, the same could be said for virtually any channel.

For more on how marketers and ad networks develop their influencer channel into a valuable and measurable revenue source, watch this webinar recording.

Performance marketing has a strong growth record and is continuing to accelerate. But there are five key requirements that brands, enterprises, and performance marketers need to consider to keep that trend going.

Marketers need to know that they can engage in affiliate and performance marketing initiatives with strong protection against fraud. Advertising fraud and marketing fraud will never be 100% eliminated, but marketers need to be assured that the vast majority of their spend is warranted, safe, and fraud-free.

Managing partnerships at scale requires attention to detail and care, but automation can help. Knowing which partners are meeting, exceeding, or failing to meet acceptable parameters is great. Automatically setting levels at which affiliates are warned, turned off, or dialed up is even better.

We’re long past the days of affiliate marketers operating in the darkness. Brand safety and accountability are critical features of the future of performance marketing.

If performance marketers are simply incentivized to provide traffic, leads, or other top-of-funnel inputs, they will do exactly that. But if they are incentivized to drive actions that result in provable ROI — and can be properly measured to do so — then incentives are aligned between partners and brands.

When brands own their platforms, they set the rules. That enables transparency, alignment, and fraud protection. It also ensures that brands don’t pay more than they need to for services rendered.

TUNE surveyed 2,274 performance marketers in the U.S. and U.K. in March and April of 2018, including 400 in the U.K. and 1,874 in the U.S. Of all respondents, 82% are under the age of 44, 54% are women, and 46% are men.