Optimising performance marketing partnerships in ‘the year of the customer’

In 2014, I wrote about a ‘groundswell’ of change underway in digital partner (cost-per-action) marketing and how savvy business-to-consumer brands were manoeuvring to future-proof and dramatically increase their growth in the space. Over the past year, I have seen more and more enterprise companies catch this wave – bringing their digital partner marketing programmes in-house and connecting directly to their digital marketing partners at scale globally, for easier management and increased profitability. Companies riding the crest of this wave have a competitive advantage, as they are able to better understand and invest in their most valuable partners while marketing more precisely to a critical customer base – those who are ready to buy.

Dr Natalie Petouhoff, vice-president and principal analyst at Constellation Research, has focused on 2015 as ‘The Year of the Customer’, with strong research reminding marketers that true north is, and always will be, the customer. She smartly opines:  “Software has the potential to create and drive revenue when it’s attached to the right strategy. Technology without the right strategy just means we do more of the wrong things faster.” At Performance Horizon Group, we are focused on the right strategy – one that enables enterprise companies to market one to one with their online and mobile digital marketing partners at scale – locally, regionally and or globally.

Growth and shifts in internet advertising

Research points to continued massive growth and spend for internet advertising. In the US, Q3 2014 revenues set an all time record of $12.4bn, a rise of 17% year on year, according to the IAB. Magna Global, a media research unit of Interpublic Group, forecasts that global digital ad outlays, driven largely by social and mobile campaigns, will catch up to TV by 2019. This is significant, as TV has held the top position since 1999. Research group ZenithOptimedia predicts mobile ad spend will increase 38% on average through 2017.

This shift to digital has brands hyper-focused on performance and their ability to understand the exact effect an ad has on a customer’s path-to-purchase through every channel and on every device. Increased spend means today’s marketers are under more pressure to bridge digital marketing efforts to business outcomes and the bottom line. Therefore, they are becoming more obsessed with measuring return on investment and they understand how critical it is to utilise technology to market in a way that focuses on the consumer’s preferences, purchase behaviour, needs and wants – all in real time. We have said for a long time now that the preferred model for all advertising will be on a performance basis, and this is fast becoming a reality.

Rise of contextual marketing

It is only natural that customer-centric marketing yields better customer data. This requires being present where, when and how customers find and buy products and services. As a practice, targeted marketing based on demographics and psychographics has been around for years. More recently though, many software firms are focused on providing solutions that allow for real-time contextual marketing based on factors such as a customer’s location, device and the time of day – ensuring every touchpoint is timely and relevant to each individual. Some firms such as SAP are building comprehensive multichannel platforms, while others are focused on a specific channel such as email or social media.

For many channels, the path-to-purchase is becoming shorter. Social networks such as Twitter and Pinterest are working to integrate and perfect ‘buy now’ buttons, turning social media into a marketing platform to reach those customers at the bottom of the sales funnel. There has been a long-standing gap for retailers between their online and in-store marketing data. To bridge this gap, retailers, banks and other consumer brands are partnering with mobile loyalty apps and adopting technology such as beacons to better understand and reach customers. Even traditional direct marketing channels such as email are being leveraged for contextual marketing, driven by real-time data.

For companies, this data is becoming just as valuable as physical currency in driving competitive advantages. As digital marketing becomes overwhelmingly performance based, it is technology like our ExactView digital partner management application that enables companies to be more customer-centric by combining performance metrics with their own product, site and consumer data. If your challenge is to market one to one with consumers at scale, then leveraging technology to market one to one with your digital marketing partners is a must. In-depth performance metrics give brands a more complete view of their customers via their partners and answer questions such as: ‘Who were my repeat customers?’, ‘What was the total or average spend per visit?’, ‘Did the customer buy on desktop, mobile or tablet?’.

Rise of partner marketing

Digital partner, or performance, marketing has traditionally been synonymous with the term affiliate and categorised as an online channel alongside display and search. Today, the channel has emerged as a top-level online marketing model, applied across channels that allow for context such as social, mobile, video and
to a certain extent, premium display partners. This new model is driven by advertisers that want more transparency, preferring to work directly with premium partners at scale with a focus on driving real business growth and not just driving top line.

In partner marketing, attaching software to the right strategy means aligning closely and building mutually beneficial relationships with marketing partners that share your vision and understand the greatest value comes with a primary focus on the customer. While it is true that technology allows advertisers and partners to better understand each other, the true value lies in the ability to deeply understand the tendencies and behaviours of customers and use data collaboratively to drive margins and growth for both parties.
In order to support this shift, advertisers and their partners need the right infrastructure in place. While digital marketing continues to confuse, we have opted to remain laser focused on partner marketing, valuing an open and flexible product design for companies looking for a future proofed custom approach.

Sir Martin Sorrell, CEO at WPP, cites three forces that are disrupting the advertising world: fast-growth markets such as Latin America, Asia and Africa; new media; and the application of technology to the business of advertising. How brands apply technology to strategy, and specifically their performance-based efforts, is paramount to success. As digital partner marketing continues to ascend as the primary means of acquiring new customers and driving profitable sales growth outside of paid search, we remain focused on disrupting the status quo by enabling marketers to apply the right software to the right strategy, all with an eye on  the most important asset of all: your customers.