Performance Marketing is Here to Stay: 3 Important Tech Questions for the C Suite The data is in. Performance-based pricing continues to dominate as the preferred model for Internet advertisers. According to the recent IAB Internet Advertising Revenue Report conducted by PwC: “Performance-based pricing, the most prevalent pricing model since 2006, has maintained a strong sequential growth rate, reaching 66 percent in 2012.”
Enterprises are investing heavily in digital advertising, and odds are that performance-based advertising is already part of your overall marketing mix. However, the landscape is changing quickly, and there are important things that C-level executives should ask both internally and externally about the technology and resources required to capitalize on this rapidly growing advertising model.
1) CEO to CMO: What marketing technology investments are required to unlock our potential to reach consumers in new markets and to scale globally?
From a top-level strategic perspective, it’s important for CEOs to understand the technology platforms their CMOs require to optimize the company’s overall marketing efforts. Performance-based online advertising has gained popularity due to a company’s ability to accurately measure its ROI—something of great interest to CEOs.
Consumer habits continue to change, including where and when shoppers respond to ads that convert sales, downloads and other completed actions. Reaching consumers, driving sales and taking products to new markets are top of mind for CEOs. Tools that enable a company to measure and analyze the results of performance campaigns continue to improve, and CEOs need to make sure CMOs are advising them on the required resources to leverage performance marketing in a way that best supports business objectives.
2) CIO to Marketing Technology Vendors: What types and levels of services are included as part of your entire technology solution?
Marketing programs require a lot of resource investment—especially at the enterprise level. Brands that invest up to 30 percent of their digital marketing budgets in performance channels need to maximize the spend value. Many performance marketers have relied on the technology of traditional affiliate networks, and this solution may continue to work for certain brands and campaigns. However, Google recently shook up the industry by closing its Affiliate Network, which demonstrates that if a vendor’s services don’t evolve, it will eventually lose pace with the needs of brands seeking increased control over key marketing channels.
CIOs should not look simply for a marketing technology vendor, but an ongoing partner. Today, technology that is scalable and centralizes and manages real-time data is a must. However, for companies with global operations, the ability to make payments to performance partners in any time and in local currency, as well as receive on-demand technical support and training are invaluable—and this goes beyond remote call centers with answers provided from scripts. Competitive solutions can include the ability for local offices to receive real-time support in local languages from people who understand the technology inside and out.
3) CMO to Advertising Agencies: What is your role in using technology to help us achieve maximum success with our performance marketing campaigns?
There has been a lot of talk lately about the changing relationships between brands and agencies. Tighter budgets and technology advances are leading CMOs to re-evaluate their agency relationships. Online marketing missteps can damage a brand’s reputation in an instant, and CMOs need to know that campaigns are run on sites that align with their brand’s values. In order to directly manage partner relationships and secure data, many brands are now looking at technology that allows them to bring performance marketing campaign management in-house on a private network in a brand-safe environment.
Many forward-thinking agencies are already on top of this question about their technology role and are lining everything up to enable direct support of the CMO. These agencies are strengthening client relationships by stepping in as the “contractor” for a brand’s in-house performance marketing technology. Digital agencies that can indentify, recommend and/or manage a software platform that addresses the changing needs of CMOs at global brands will gain a competitive advantage when it comes to retaining and winning business.
Internet advertising in expected to continue to gain media market share and is second only to broadcast television in terms of revenues. Within the larger online environment, the year-over-year statistics indicate that performance-based advertising is growing due to the attractiveness of measurable outcomes. Global brands in sectors such as retail, travel, financial services and telecom require technology to stay on top of big data and turn insights into action. Performance marketing is here to stay. Is your C-Suite asking the right questions?
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