The performance marketing industry continues to grow in both size and stature. With performance-based advertising now comprising 66% of all online advertising in the United States according to the IAB, it’s safe to say that performance marketing has become a mature and influential part of the online advertising ecosystem.
The coming year will see a number of new growth opportunities for performance marketing companies. Here’s an in-depth look at what to expect in four key growth areas of performance marketing in 2014.
What Advertisers Really Want: Multichannel Marketing Solutions.
Advertisers’ growing preference for multichannel marketing solutions is the one trend that is sure to dominate performance marketing in 2014. Marketing in the digital age is a complex, resource-intense endeavor. In a competitive business environment in which many brands are experiencing decreasing marketshare, CMOs need the assurance that their marketing partners can provide a holistic, multichannel solution to their digital marketing challenges. They want a single gateway that will help them engage, acquire and retain customers more profitably while also building awareness and affinity for their brands.
Advertisers need scale, speed and simplicity in order to achieve true results from their online marketing campaigns. A lot more performance-based advertising budgets are bleeding into multichannel campaigns, instead of being focused on one specific media channel.
To take my own organization as an example, in the last year we accelerated our focus on building a multichannel business via smart acquisitions, first with the U.S.-based performance media company MediaWhiz, then with mobile affiliate network MobAff and finally with our acquisition of Adquant’s social advertising agency, formerly known as Adotomi. Each of these acquisitions gave us additional scale, expertise and clients to compete in key markets and verticals. But, more importantly, they allowed us to offer advertisers, networks and publishers a range of online marketing opportunities integrated through one gateway.
Mobile is Everywhere.
Marketers have long been predicting that this (insert year) will be the “Year of Mobile.” We’re well past that point. Mobile is now everywhere, and it should be incorporated in every performance marketing campaign you run in 2014.
Mobile is in social, it’s in search, it’s in social and it’s rapidly spreading across email. Simply put, mobile is reshaping the performance marketing industry in ways we haven’t seen in many, many years.
Advertisers are projected to spend $25 billion globally on mobile advertising in 2014, compared to $15.8 billion spent worldwide in 2013. EMarketer estimates that North American advertisers will spend just over $12 billion in 2014 on mobile ad campaigns (52% of the worldwide market), while their western European counterparts will spend $6.4 billion on mobile, or 25% of the total worldwide mobile ad spend.
Clearly, the demand for mobile advertising is moving in the right direction. However, several issues persist, including quality and effective metrics to measure the performance of mobile campaigns.
The mobile marketing ecosystem enters 2014 at an interesting and exciting phase in its evolution. Gone are the “Wild West” days of anything-goes tactics, having been replaced by a more sophisticated, focused brand of mobile advertising. But quality and control issues remain, which could make some advertisers hesitant to invest in performance-based mobile marketing.
In order for 2014 to truly be the ‘year of mobile’, several things need to happen: the industry needs to mature; better measurement and tracking; maturation of programmatic buying; and consolidation among smaller players must take place.
Email Isn’t Dead. It’s Thriving.
Email is poised for another strong, if not bumpy, year. Today, practically every business does some form of email marketing. Let’s face it: Email isn’t going anywhere, despite numerous predictions in recent years that email is dead.
But how effective are your email marketing campaigns? That is the question every marketer should ask in 2014. More precisely, are your email campaigns helping you acquire more customers or just aimlessly filling up consumers’ inboxes?
Success in email marketing in 2014, will require a mix of great creative and a strategic customer acquisition email strategy. Here are five strategies you can use to improve your email campaigns in 2014:
1. Add click-to-call to every email.
Click-to-call should be in every performance marketer’s toolkit in 2014. This form of search marketing enables consumers to easily contact your business via a one-step dialing process. By implementing a click-to-call feature in every email, you ensure that consumers who want to take an action now with your business can do so and don’t have to find your phone number within the email and dial it themselves.
2. Use mobile wisely.
One of the best ways to improve your lead generation and customer acquisition efforts is to mesh mobile and email. Our internal analytics show that for many merchants, between 30 and 60% of their marketing emails are now being read on a mobile or tablet device. Marketers should take advantage of this by segmenting their subscribers by device and operating system and sending messages that include specific keywords.
3. Design your emails for mobile.
Seventy-six percent of consumers use their smartphones to sort emails before viewing on a computer, according to BlueHornet. Your email campaigns should be designed and optimized for mobile since more than 80% of non-optimized emails will be deleted without being read and 30% of consumers will take the additional step of unsubscribing entirely. A clean, simple email design is more likely to produce an action from a consumer using a mobile device than a complex, multilayered email that will eat up the battery life of a consumer’s mobile device.
4. Use compelling creative.
While too many images in your email is a recipe for disastrous clickthrough rates, having compelling email creative is a must. Inboxes are highly cluttered these days. It’s important to make sure your email stands out by employing creative that complements the “from” and “subject” lines. Email creative should compel a subscriber to take a specific action, hopefully one that the creative has specifically highlighted. Once the consumer opens the email, make sure the creative follows what the “from” and “subject line” promised. Consumers will quickly delete your message, or unsubscribe to your offer/list, if you falsely advertise in the subject line.
5. Implement real-time replies.
One of the great things about email marketing is that the data it yields often can be collected in real time to create new customer segments. In 2014, invest in a real-time email marketing capability, or partner with a company that can help you do so (such as Matomy), to achieve better email marketing performance through more timely and targeted emails.
Get Ready for Performance-Based Social Advertising
We’re witnessing the beginning of the performance-based social advertising era, especially in mobile. Look for Facebook and Twitter to continue to make additional inroads in providing marketers with more advanced performance-based ad solutions in 2014, just as they
did last year with the addition of CPA ad buys (Facebook) and direct response cards (Twitter).
Twitter’s recent acquisition of MoPub means advertisers now have new mobile targeting capabilities to play around with on the social network. Twitter expanded those ad targeting capabilities even further in November by allowing marketers to more granularly segment audiences on mobile (iOS and Android) by operating system version, device, and Wi-Fi connectivity.
Facebook is now mobile. Forty-nine percent of its Q3 2013 ad revenue came from mobile, an increase of 8 percent from the second
quarter, and a giant leap from early 2011 when it had no mobile advertising revenue. Facebook mobile advertising gives marketers an
unparalleled ability to target consumers with quality content-based ads, increasing engagement and ultimately improving performance
Social will play an increasingly important role in performance marketing in the future (full disclosure: we made a social acquisition in 2013 when we acquired Adquant’s social advertising agency in October). The combination of mobile and social is still maturing but you can already see the possibilities emerging. The ability to mix mobile’s real-time marketing capabilities with social’s customer engagement and emerging customer acquisition capabilities is a digital marketer’s dream.
Look for mobile social campaigns to become an increasingly important part of advertisers’ online marketing mix in 2014.
Digital Video Advertising Gets Its Moment
Video has historically not been perceived to be a “performance” marketing channel for many of your typical performance
advertisers. Historically, it has been reserved for advertisers looking to make a branding splash without necessarily a call-to-action. This
outdated perception will change in 2014.
Digital video advertising will explode in 2014, with U.S. advertisers projected to increase their spend 40% from 2013, to $5.75 billion,
according to eMarketer. Considering performance-based advertising makes up more than 60% of all U.S. online advertising spend, it is
a safe bet that performance-based digital video ads will be a big market in the performance industry in 2014.
Don’t think of video ads as only a desktop opportunity. eMarketer expects mobile video ad spend to surpass $1 billion in 2014 and
exceed $2 billion by 2016. Make sure your digital video ad marketing strategy includes mobile.
Video can and should be promoted with some sort of incentive attached to it. At a recent Appnation conference it was reported that when there is a “hook,” incentive or virtual currency (choose the word you think most accurately describes the incentive) to digital video ads more than 80% of consumers will video an ad in its entirety. When there is no “hook” just 20% of digital video ads are viewed to completion. These figures, coupled with the fact the prior method of video ad buying is often less expensive, makes it hard to resist performance-based digital video advertising as a marketing strategy for 2014.
Here are three quick tips to make your digital video ad campaigns more performance-oriented:
- Add click-to-call
- Add a lead-gen form at the end of the video or ad
- Ensure you have social media signals (Facebook, Twitter and LinkedIn shares) embedded at the end of the video.
2014 is sure to bring a number of new opportunities, speed bumps and surprises in performance marketing. Companies and networks that adapt to advertisers’ growing demand for multichannel marketing solutions and the emerging power of mobile and social media will be well positioned for success and growth in the coming year. Those that hew to outdated business models, or fail to provide a multichannel gateway of performance-based advertising solutions, will see their marketshare erode at the hands of more nimble and savvy competitors.