“The Boundary Between Performance And Branding Is Starting To Wear Off”

Director of strategy Artics Internet Solutions Evgeny Parshin wrote vc.ru a column with a forecast of how a few years the market will look like digital agencies. The market of Internet advertising is not only growing rapidly, but is changing very quickly. If you look back and trace its development, we will see that over the last 10-15 years not only the media landscape but also the approach to online advertising has changed dramatically. Ten years ago, online advertising was bought mainly for CPM, and the approach to placements resembled the approach to television advertising. The key metric was cost per contact and coverage, and almost the only target was to assess the relevance of the audience platform, which advertisers are determined at best on the basis of data TNS.

Now for many businesses the Internet has become a primary sales channel, it is one of the most important points of interaction with the audience. While the market for digital marketing is divided into two areas. Branding and performance, duplicating the logic that a long-lived offline — branding and direct sales promotion. It is interesting to note that if a few years ago, digital branding budgets of large advertisers significantly exceeded performance budgets, but now the situation is rather the opposite. The Internet is definitely the sales channel, and the channel wide.

It would seem that agencies have relied on performance marketing, must be rubbing their hands and to keep an eye on other colleagues down, but I would at least not recommend. Digital market, as it is ambiguous may sound, is still in the stage of formation. In the next few years we will see serious changes, including in the ecosystem of digital agencies. And heres why. The popularity of performance marketing is growing, and, it seems, investment in the Internet sale of one cut is not going.

The cost of contextual advertising, which remains the main channel of performance marketing, growing from year to year (according to AKAR, in the first three quarters of 2016, the contextual advertising — the only online channel that showed growth). Rapidly evolving technologies like display advertising and associated Analytics. Advertisers want to be very targeted in their communications and point to communicate with the separate segments of the target audience, giving consumers exactly what they may be interested in a particular point in time. Changed branding tools — advertisers gradually, but has passed from buying seats on the platforms to the audience. And metrics, which advertisers measure the effectiveness of advertisements, no longer reach.

And performance and branding campaigns are becoming more targeted, personalized and optimized in real-time. So the boundary between performance and branding is starting to wear off. Campaigns aimed at informing and involving the consumer, flow into one another and are continued in campaigns aimed at stimulating sales. The last used data obtained in the result of the first, and the first optimized on the basis of the sales data. In addition, the dividing line between online and ofline.

Gradually the traditional offline channels become measurable and optimizable. Already appeared programmatic platform to advertise on TV; increasing the share of digital radio stations; outdoor advertising starts with the trigger data and technology of facial recognition. In the near future using the capabilities of mobile devices, advertisers will be able to address the message of the Billboard, if not a specific person, certain segments of the target audience in those moments when its concentration in the immediate vicinity will be sufficient. All this changes the approach to digital marketing in General. The strategy, which consisted of different sets of activities, mutual influence which often was not measured, leave in the past.

They are replaced by integrated solutions in which advertisers can track the entire path of the consumer and to evaluate the real impact of all advertising placements for sale, not only online but also in offline channels. The market already has many successful cases. For example, FMCG companies, which have historically focused on the development of brands, and not the sales launch online stores and implement communication strategies, which are based on the full path of the consumer — from the first contact with the message prior to purchase. In this regard, revealing the history of Loreal — his first online store, the company launched five years ago, and today own online stores have many brands of the company. Strategy Loreal is to establish a direct relationship with Internet users and increase the proportion in e-Commerce (how to use your own channels and partner).

Who do you think will help Loreal to solve the tasks. Performance Agency or a global partner with high creative and media expertise, but pretty average for the market ability to work with sales. Both candidates in the current coordinate system does not look like a superhero, able to cope with this task. But the chances rapidly increase performance-examination of a network Agency is more than the performance of the Agency to acquire the competencies in a complex customer service, which has a network structure. Moreover, the slogan “Who is not performance that is not digital”, which we asked the clients several years ago, it may be best heard of all this network of agencies, and now almost every one of the global players, a portfolio of performance-Agency or at least Department.

Yes, as long as they lose to those agencies, which have long focused on performance marketing and the years invested in the development of expertise (view any rating agencies performance marketing), but the experience will come with time. More important than the right direction and resources. Performance marketing is always working with data. Marketers understand this very well, but, unfortunately, very often Data Driven Marketing is to work with CRM data at the level of the complete sales. While still a relatively small proportion of advertisers use this data to attract new users, although the possibility is already there — look-alike-targeting allows you to search for users similar to your real customers.

And thats just the tip of the iceberg of possibilities. End-to-end tracking of consumers online and offline. Optimization of campaigns to improve brand metrics, based on the results of the conversion of the people was made a media contact. Increasing the personalization of communication from wide segments of the target audience (3-5) to these micro-segments (10-20) and deeper in fact, individual personalization. That is what is going marketing in the near future.

To solve such problems we need a serious change in approach to marketing in General. Yet, as practice shows, advertisers are just not ready for the changes that are required for a complete transition to the new paradigm of marketing. Big business is often faced with internal problems — limitations and inability or unwillingness of it services to integrate with CRM systems, the legal difficulties associated with the ability to process and upload data, and simply the inertia of established organizations. Small and medium business, usually another problem — there is no possibility to allocate the necessary resources for this task. This situation requires from the Agency of forming a new pool of competences in the field of consulting related support to clients in the task of building an effective approach to digital marketing, performance-approach.

In other words, the Agency needs to deeply integrate into the clients business. Be responsible for the development and implementation of advertising campaigns (quality work with all channels, including non-standard, SMM, working with special projects, and so on), but also to influence a range of internal processes and help transform the work of marketing departments and sales. To promote the formation of performance-expertise inside the business, based on a dense bunch of it, marketing and sales. In my opinion, it is the ability of the Agency as a partner and consultant, able to provide support in the changes that will be soon demanded on the market. Ready specialized performance-agencies become for the clients of such advisers.

Most of them do not. The development of such competencies is now more possible network of agencies than the specialized on performance marketing. For those who are familiar with the subject superficially in the head is likely to come the following answer. “Clients pay for results in sales”. Actually there.

Rather, the customers, of course, pay (sometimes), but those readers who regularly participate in performance-tenders of large customers, could not fail to notice the tendency of the Commission paid by the client to zero. The Agency proposes to capitalize on those commissions that pay site. But the site gradually begin to move away from the practice of payment of Agency commissions. The Commission paid to its partners Google is 0%, and in the case that a partner wants to use, for example, the DoubleClick platform, he will be forced himself to pay Google a Commission, and quite a significant. “Yandex” is likely in the medium term will also waive commissions to agencies.

Obviously, this requires performance-agencies to review the approach to work and seek opportunities to earn beyond the management of advertising channels. Again, the Agency should provide customers with partners that will help to build a performance-processes on the side of the advertisers. Along with those trends, about which I wrote earlier, the situation is a subtle hint to the players in the market of performance-marketing that should not rest on our laurels — the evolution continues, and those who dont adapt will not survive. So everything is changing. However, when it was otherwise.

Changes in the external environment, if the changes are not of critical nature, almost always bring new opportunities, the main thing — time to consider them. Analyzing such opportunities, I have identified several strategies that in the near future can be demanded of performance-agencies: If you look at another segment of the digital market — development of advertising materials and websites, you can see some remarkable and successful production studios that create outstanding projects, but it is almost never working with clients directly. And this is also the way, why not. Remove the need to client services, reduce costs of non-production personnel (at least an account management) and concentrate solely on effective campaigning.

Come on, tell the brand Manager of fmcg about how you optimize the campaign with a focus on data. You listened very carefully, but are unlikely to understand. Yes, customers dont always understand performance marketing-level marketers ecommerce projects, and marketing approach, many campaigns are not yet ready for a deep orientation to the data. Again, the market for digital marketing is changing very rapidly, and the corporate structure does not. Marketers on the client side are often multitasking and not physically keep up with all the changes.

The task of the agencies to help develop and train. And to provide services in the most convenient format. For example, you can offer customers a turnkey product that solves a specific task. Combine context -, targetirovanie placements in social networks and other channels, to optimizing the conversion rates on the landing page and Analytics on the entire funnel from clicks to active participation in the contest. Call it “the required number of registrations with the optimization of the cost of activation” (a little sarcasm).

Product approach is convenient for the customer and therefore will be in demand. The mission of the Agency to understand the needs and properly packaging their services into easily understandable products with the obvious advantages. We are not talking about expertise, about which I spoke earlier, to cultivate in-house. It is about the ability to act as superaggregation all of these examinations. The ability to manage all digital activities, based on the data and optimizing in real time to the business KPI.

The path is hard, but its the one we chose at Artics Internet Solutions. And not only do we. I know at least three performance Agency in the market which look in the same direction. The market offers more and more opportunities for managing and evaluating the effectiveness of advertising campaigns, advertisers seek to be more effective not only in classical performance-channels but where before the optimization actually was not. It is quite understandable that in such circumstances, customers are looking for a digital partner who has a comprehensive expertise.

In fact, paths, and much more. And the choice depends not only on those trends that are on the market, but also the internal situation in a particular Agency, already acquired competencies and, of course, desires to develop in one direction or another. One thing is clear — digital-marketing becomes smarter decisions more difficult, and thus the success awaits those who continuously develops not only on the level of deepening expertise, but also its expansion. Send your speakers and case studies about advertising and marketing on [email protected]

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