Predictions for 2017 from performance and affiliate marketing experts

Performance marketing is a living, breathing, ever-changing thing, as anyone in the industry can tell you. Keeping up with the latest trends is an absolute must in order to stay at the top of the game, for advertisers and networks alike. To discover what’s hot now, you need look no further than HasOffers’ recent Performance and Mobile Marketing Meetup, the first of its kind held in mid-November on the rooftop of London’s Shoreditch House.

With the fire burning and the TUNE and tonics handed out, the crowd of over 60 people turned its attention towards the main event; discussing the way everyone could mutually benefit and, ultimately, build a stronger market. Major topics of conversation included how to use data to make a business stand out, looking beyond the (mobile) install, re-engagement, re-targeting, and capitalising on that mobile moment by using the right native, video, and content-led ad.

Emcee Stephanie Emmanouel of SomoGlobal started the night’s panel of local performance and affiliate experts Ami Spencer (VoucherCloud), James Little (TopCashBack), and Max Pepe (Mozoo/Surikate).

The evolution of affiliate marketing

Stephanie’s first question asked how affiliate marketing has shaped the evolution of business. Ami, an early employee of her company who has tracked many changes throughout the years, had an insightful response:

“Similar to most digital industries, we’ve seen a great deal of change within affiliate marketing over the past few years, and as a business we have had to adapt to this. Taking a more creative and content-led approach to working with clients has allowed us to grow brand partnerships and deliver more engaging campaigns across all of our channels, especially mobile. As we [Vouchercloud] continue to support brands’ mobile strategies, we are starting to see more budget allocated to the channel…whether this is using location-based data to drive mobile engagement or target customers more relevantly. At Vouchercloud we see mobile as an important channel to focus on in 2017.”

Ami’s response was a strong one, explaining that using targeted and up-to-date messaging in the right moment drives engaged users, which in turn leads to increased budgets.

Capturing those (mobile) moments

Another topic the panel discussed regarded “mobile moments,” the point when a user gets on a device and decides to execute the purchase of a product or service. More specifically, they discussed how customer expectations on mobile are evolving faster than advertisers can develop best marketing practices, agreeing that this makes designing a successful advertising campaign more challenging than ever.

James Little shared that he believes the best way to capture the customer at the right time is with content, coupled with the right technology, data, and not too many KPIs.

We tend to agree with James since most successful campaigns we’ve seen this year from European clients are those who are proactive, have anticipated their users’ needs, and have included personalised content around that user’s events. These clients then use data to measure, analyse, and optimise in real-time to iterate and duplicate “look-alike moments,” using their own intellectual property (IP), or what HasOffers call secret sauce.

Adding value

The more value you add for an advertiser the more likely they are to work with you instead of another network. Being more transparent and teaching how to better optimize is a win for all involved parties.

Max Pepe gave the audience an excellent perspective on how best to solve the problem of which advertising campaigns are driving tangible results and how he believes these results should be measured (other than using rulers and inches.) He quoted his CEO’s recent comments.

“Let’s take out the laziness in the industry by reducing the amount of produced non-targeted advertising content. How many times have you found yourself interrupted by an interstitial that takes up the whole screen, even before you’ve had the chance to begin reading your article? To prevent the situation getting worse, we must take the opinions of users, using technology to gather this feedback, with other key data to continuously improve our campaigns. My question is: when are we going to see more responsible advertising [on an industry level]?”

Pepe’s company Mozoo truly knows how to use marketing to capture those moments and get users converting to consumers for both the advertiser and the publisher. His position allows him to achieve a three-way win.

The key to success

What we learned from all of our panelists is that affiliate marketing isn’t dying, it’s evolving. This evolution is naturally developing from the advertisers who build their marketing strategies to focus more on performance and business objectives than anything else. When companies proactively search for answers by balancing their interaction between data, KPIs, technology, and messaging, they find success. It’s these elements that worked in 2016 and will continue to see success in 2017.

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How to Measure the Success of Mobile Video Ads

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With developments and demands on the rise, video is becoming an increasingly popular format for advertisements and is poised to take over the more traditional static format.

Static ads still currently dominate ad placements, but one in four media professionals believe video adverts will become “the norm” in the digital ad-format world. Recent ExchangeWire research supports this perspective, reporting that video is predicted to become the standard within the next two years.

With most consumers viewing videos on their mobile phones, what should advertisers and traffic partners be using as key metrics to measure success?

Start by understanding how people consume video

“World-wide, consumers are devouring nearly 20 minutes a day of videos on mobile devices compared to 16 minutes on fixed devices — smart TV and desktop devices,” according to a Zenith Optimedia study.

Users are consuming more video than ever, especially on mobile. In 2020, video will drive around 80% of the total global internet traffic. Advertisers want to produce more videos, while publishers want to provide more video formats and inventory.

An IAB report proves this, too. Average video ad spend has nearly doubled in the last three years to over $10 million, taking an anticipated 57% of total digital advertising budget in 2016.

This is being driven by social networks such as Facebook, SnapChat and even Pinterest, as their users soak up and engage more than ever with “live videos” and “stories.” With other technological advances such as 4G and 5G together and cheaper mobile data plans, help these social platforms overtake the likes of YouTube to battle it out to become our preferred mobile video platform.

As businessman Richard Branson has famously said, “Business opportunities are like buses, there’s always another one coming.”

The measurement challenge

This growth doesn’t come without its challenges. According to IAS, top challenges for mobile video are measurement, budget and ROI. This makes we wonder why viewability and engagement are being used for measurement.

Advertisers may be getting their measurement education from publishers that have a bias towards their own platforms. I believe the industry needs to look beyond impressions, viewability, engagement or clicks and ask one simple question, “What’s our objective for this ad campaign?”

Creating an objective and using it to measurement the effectiveness, with KPIs/goals along the way, will put advertisers and traffic partners in a much stronger position to warrant the success of; the traffic partner, the publisher and the campaign itself.

Becoming invincible: an objective-based approach

The Arsenal Football Club became known as “The Invincibles” in 2004, after completing an entire season undefeated. Video is well on its way to becoming the invincible format, especially as marketers allocate larger amounts of their ad-spend to video.

Revenue is expected to show an annual growth rate (CAGR 2016-2021) of 17.2% resulting in a market volume of US $7,463 million in 2021, according to Statista. UK alone will have a market volume of $2,533 million in 2021.

Especially with all the opportunities for innovation arising from 360-degree videos, location-based videos and virtual reality videos (which I’m looking forward to).

With an objective-based thinking approach for a mobile video ad campaigns, along with the right key performance indicators, we will see mobile video ads become “The Invincible” format in the advertising world.

Should European Advertisers and Publishers Be Worried About Mobile Ad Blockers?

Mobile-Ads

With the adoption of mobile devices growing twice as fast as the global population, 2/3 of the world population will own a mobile device in only 4 years. In 2020, more people will have mobile phones (5.5B) than electricity (5.3B), running water (3.5B), and cars (2.8B) – how crazy! How has this affected advertisers’ ability to market to users in this on-the-go mobile world?

By 2020, 70% of the world’s population will use mobile devices.

Consumers are savvy

Consumers now have the ability to block advertisers from tracking their online habits and even serving them ads.

TUNE’s mobile economist, John Koetsier, surveyed almost 1,000 smartphone owners in the U.K. He found that ad blocking installs are growing rapidly, with downloads spiking 3x in the last three months of 2015.

What TUNE found was that consumers are happy to spend money on gaming apps they enjoy but they don’t want to spend their hard-earned wages on paid content. Consumers are willing to pay to avoid mobile app ads, but the amount they’re willing to give is significantly less than the revenue publishers make with ads — less than 9%.

Screen Shot 2016-08-08 at 10.51.14 AMOnly 21% of consumers would pay to block ads

Worldwide mobile ad blocking installs grew three times in the last quarter of 2015. TUNE research suggests a little chunk of every age group is blocking ads. Teens are least likely to block ads, while women tend to block ads less than men. On average 28.6% of men report having installed more ad blocking apps, compared to 22% of women. In the U.K., 27% of people admitted they’ve installed ad blockers on their smartphones. The typical user to install an ad blocker would be a middle aged male, on their Android in the U.K.

Industry commentary on ad blocking

“Irrelevant and excessive mobile ads annoy customers…” Three U.K.’s CMO Tom Malleschitz told Three.

I agree with Malleschitz and find ad blocking comes about from badly placed or untargeted ads. Others call it laziness, bad sources of traffic, or shoestring budget advertising. The more unengaging, badly-sized, or cheap-looking ads people see, the more tired they become of them. Ad networks, agencies, and traffic partners should be seeing this as opportunities.

I believe investing more time getting direct relationships with advertisers, and less with middlemen, brokering deals from other networks, the more traffic partners can understand their client’s target audience. This will result in ad networks creating more targeted and exciting ad types consumers will engage with. In turn, this will lead to less users installing or using ad blockers. At the end of the day, consumers don’t want to pay for content.

In TechCrunch, AOL CMO Allie Kline expressed that it’s still early for the ad tech industry to grapple with the mobile’s rapid growth.

“ … while I think it’s absolutely an issue we need to address and spend time on, I also think we need to give it the time to do that. We need to be really careful about the thoughtfulness and investment we make to right-size how we fund content,” Kline said.

I’m not sure I agree with Kline here. I think this creates an opportunity for traffic partners (networks, agencies, and publishers), to come up with ways to market content to mobile users in a way that they don’t hate. It’s something advertisers will never have time to address and so traffic partners need to step up and create these solutions.

The price of ads

Are you as a content reader aware that ads fund free content? Less than half of British adults are aware that ads fund free content. Only 44% of British adults online are aware that most websites are free thanks to advertising revenue, according to an IAB report. Men (52%) are more likely to be aware of this than women (36%), and 18-24 year olds (59%) more so than people over 55 (36%). TUNE’s research study found that nearly 80% of UK consumers wouldn’t want to pay for content.

Google’s Benjamin Faes, MD, media & Platforms, argued at MWC that ad blockers risk the free content ecosystem and blocking all ads is “diminishing” the overall experience. He also pointed out that four of the top 10 videos on YouTube in 2005 were ads.

Final thoughts

I don’t think there is anything to worry about for European publishers and advertisers about ad blockers, but I do think there need to be advances in ad types and better targeted ads. Traffic partners can put an end to the intrusive unengaging ads. They can do this by creating new ad types, use more sophisticated technologies to track and collect as much data as they can from ad performance to then better target their users, using this big data collected in more real-time, using programmatic solutions with more relevant and delightful creatives.

Ad Blocking in UK: Here to Stay or Gone Tomorrow?

With Europeans often regarded as being more sensitive to information privacy, are United Kingdom consumers any more likely than their American counterparts to install ad blocker software on their mobile phones? According to TUNE research, the answer is yes, but just by a tad.

U.K. smartphone users are about as likely — or unlikely — to use ad blockers to shut down mobile adverts as Westerners, according to a TUNE survey that included 1,000 U.K. consumers. While 23.9 percent of Americans report using ad blockers on their smartphones, only 26.8 percent of those surveyed in the U.K. said they had used ad blockers. That leaves about 73 percent of U.K. respondents reporting they haven’t installed an ad-blocker or weren’t sure if they had.

A Shifting Trend?

The trend may be shifting in the direction of greater use by U.K. smartphone owners.

Installation of ad-blockers is growing in popularity. Twelve percent of respondents had installed an ad blocker more than a year ago, and 3 percent in the last six-to-nine months. But then, in just the first quarter of 2016, there was a three-fold spike in the number of people installing an ad blocker app or browser. The installs are coming disproportionately from males, with 62 percent of those favoring ad-blockers being men using an Android device.

Males were more like to have installed the mobile app/software generally on their smartphone, which interestingly correlated with our U.S. survey results too.

An Age Issue?

Banks, insurance companies and other brands targeting seniors with their online ads might want to rethink their strategies. The 65+ age group reigned victorious for having installed more ad blockers than any other age group we surveyed, with a third reporting installing ad blockers.  What’s interesting is that out of those who said yes, about 20 percent had installed them a over a year ago. With the topic trending in late 2015, installs were on the rise again, with more people installed an ad blocker within the first quarter of 2016 than they were the prior 6 months.

People age 25-54 (split into two categories, 25-34 and 45-54) reported installing ad-blockers equally, at 30 percent saying they had. Interestly, 54 percent of men across both age groups said they hadn’t installed, with only 27 percent saying yes they had (others not being sure).

Younger demographic-audiences appear to be more tolerant of ads, if ad-blockers are any indication. Only 10 percent of 18-24 year olds and 25-34 year olds in the U.K. said they had installed an ad blocker. U.K. teens aged 13-17 were least likely to install an ad blocker at only 4 percent.

What Now?

While ad-blocking is clearly on the rise, and predicted to continue to increase in popularity, U.K. advertisers should not panic just yet.

Why? When asked if they would pay to block ads, nearly 80 percent of U.K. consumers said they would pay nothing. Almost 7 percent said they would pay less than $1/year, and less than 5 percent said they’d pay $1/day. This is obviously not enough for publishers to make a living from their site, nor maintain their sites with fresh, new content and employees wages.

If publishers did look to charge for their content, then according to the research, they should zero in on 35-44 year olds, as they said (28.26%) they would spend $1/day on blocking mobile ads during their nearly three hours a day on mobile with over 80 percent of that being in apps. I don’t think publishers need worry about that, as I think once the consumers understood more about the business models behind most of these ad-blocking companies, then they would be less inclined to install them.

“The business model of ad-blocking is a pretty unsavory one,” Simon Fox, CEO of Trinity Mirror (a subsidiary of Daily Mirror) told The Guardian. “They offer software for free (to consumers) and then come to us and say ‘your site’s OK, so if you pay us we will ensure ads on your sites get through.’ There is something extremely unhealthy about this business model.”

How to set up a winning mobile marketing campaign

This year, users worldwide have spent more than 2.8 of their 9.9 hours of their digital media time a day on mobile. That’s equivalent to watching the entire series of Breaking Bad in just over 20 days, or all 10 seasons of Friends in a month!

Nearly everything we do is on the go (as you read this on your mobile device) and nothing is telling us that this trend is slowing down. It’s quite the opposite. Here are some stats to consider:

  • According to Gartner, there will be over 2 billion mobile devices in 2016.
  • eMarketer predicts 2016 is mobile’s breakthrough year, claiming 51% of the digital market
    • 50% growth from 2015
    • Penetrating through the $100 billion mark
    • An incredible 430% increase from 2013
    • Going on to nearly double by 2019 to account for over 70% of total digital ad spend  

I’ve been working in the mobile space since 2009 and sales and marketing for 14 years, tasked with developing and implementing opportunities within agencies and  networks, app developers, and startups that help them succeed with their challenges and expand their business.

Since starting at HasOffers by TUNE, leading their sales in Europe, I’ve had the pleasure of visiting my clients all over Europe; sipping espresso with the Italians, paella with Spaniards, croissants with the French, waffles with Belgians , bratwurst with the Germans, and of course, a nice cold beer with my fellow Englishmen.

Some say Europeans are all very different, but when it comes to the conversations I’ve had in 2015, they were very much in sync. Here are my top three hot topics for 2015 and what I see trending next year:

Mobile Tracking: Do I need an SDK for that?

App developers now understand the mobile ecosystem enough to know that they don’t need to install a network’s SDK to receive their traffic—that was just a way to look for the network to deter them from moving away with the extra resources and costs in switching them out.

The roles were finally reversed and networks had to find a way to run mobile campaigns without additional SDKs to keep track of their conversions. Their options were to build in-house or use a third-party solution.

The amount of conversations I’ve had over espressos, wine, and beers about in-house solutions versus third-party solutions made me slightly light-headed and slur my words.  (I swear it’s the complexity of the subject matter, and not the alcohol!) But one thing that I do remember was that for the very few who did opt for their own solution, I always recommended they ask themselves “Will it cause me to deviate from my main business? Is the amount of time and resources it will take to build and maintain an in-house system worth it? Will I have all the features I need to analyse and optimise in real-time?” If the answer to one or more of these questions is “yes”, then the short-term solution to trying to build in-house could prevent you from scaling your business.

When looking for a third-party solution for your mobile tracking, mobile apps, or mobile web, it’s important to find a provider that moves away from the traditional pixel-based tracking we’re used to seeing on desktop. Why? Pixel tracking relies on placing a cookie on the user’s browser and when the conversion occurs, the pixel will look to collect information from the cookie. The problem with the pixel tracking method is that users have the ability to delete their history, not accept the website’s cookie terms and conditions, and some browsers even have private or incognito mode, which have their own tracking prevention built-in. These pixel tracking issues are even more prominent in the mobile space. Similar to private browsing or incognito mode, mobile browsers are notorious for blocking or deleting cookies. Pixel tracking for apps is just incredibly messy and a total fail on the user-experience side.

The best form of tracking is server postback, as it’s the most reliable and accurate. This is also what HasOffers by TUNE recommends to their clients for mobile tracking. Sam Armour from BluePod Media told me they  have “seen an uplift in conversions of between 15-20% just from using a more reliable tracking solution.” Also known as postback tracking, server-side tracking, server-to-server tracking (S2S) tracking. Why is it more reliable? This form of tracking doesn’t rely on any cookies being dropped on the user’s browser, a postback URL is fired from a Web server directly.

Manuel Jaffrin, Founder & COO of GetApp mentioned that HasOffers tracking allows his team  to stay focused on our core business. He said, “We have no worries about tracking reliability or accuracy. We trust in the HasOffers platform—It has given us peace of mind and provided us with the stability we needed over the years to grow our business. We feel very confident about the future.”

Business Models: Look beyond the install

During my last trip to Berlin, I took a client out for a few drinks, which then turned into dinner. We started window shopping a couple of restaurants’ menus, both had similar dishes, similar prices, and similar ratings on travel review sites. How do we decide which to go to? We decided to flip a coin. We realized neither of us had any cash and the restaurant we stood outside of had a sign saying “CASH ONLY!”. No need to flip that coin now; the decision was made for us.

It got me thinking: Do advertisers flip coins when deciding between similar ad partners?

There’s thousands of ad partners out there and without industry standards, it’s difficult to know which of these ad partners would be best to work with, especially if they all agree to work on their cost per install (CPI). TUNE developed a list of mobile marketing best practices for integrated advertising partners to adhere to. It provides marketers the visibility into which advertising partners support mobile marketing best practices, enabling them to make informed decisions and achieve their marketing goals. It’s  called the Certified Partner Program. Playdot’s (developer of DOTS) head of marketing, Christian Calderon told us, “The TUNE certified partner program helps provide unbiased mobile marketing standards that I can use to ensure I’m always working with quality advertising partners.”

With install costs continuously rising, advertisers are forced to compete for the best quality users in order to meet their ROI targets. Ad partners are now comfortable with offering cost per install (CPI) as a business model. I always suggest that my clients come out their comfort zones and look beyond the install as a way of understanding their clients’ needs more.

There’s estimated to be around 180 billion apps downloaded from app stores worldwide in 2015 and over 167 billion of those apps are free to download. For most mobile advertisers, the install is yet another stage in the sales funnel. It might be closer to their objective than an impression or click, therefore worth more, but it’s still no guarantee that install will drive an engaged user that will achieve their objective (like an in-app purchase). Being as transparent as possible with your partners shows commitment and helps you stand out from your competition. As Calderon told TUNE, “As a data-minded marketer, working with multiple marketing sources, I need to be able to make immediate data-driven decisions to meet my ROI goals.”

A third-party solution can provide ad partners the flexibility to offer any mobile business model they please, not just CPA or CPI. This means the third-party solution needs to be able to track and collect post-install data, including the in-app purchases to work on cost per sale (CPS) models.

Having the ability to create end points for any goal that you or your advertiser are looking to achieve from an app install, in-app  or mobile web purchase, are therefore essential.

I mentioned transparency, and it is key to achieving a successful mobile campaign. In order to provide transparency, you need data. In order to collect data, you need a tracking solution that can collect, measure, and pass as many mobile data points as possible upon both click and conversion. Why? The further down the funnel you go, the bigger the cost risk you put upon yourself, rather than your client—they appreciate that. If you have all the conversion points along the way, you can optimize your campaigns to achieve better conversion rates and increase your return on investment (ROI).

Mobile Optimisation: Data, data data

When speaking to companies this year it was quite common to hear that they’re using a system that only provides them with a click ID, which relates to the offer and the publisher. They didn’t have access to see statistical data about their conversion rates from click to action or any additional touch points they want to track leading up to that conversion, nor did they any receive device data.

Optimising campaigns is essential in order to increase performance. The difference between one ad partner’s ability to drive better results can come from the ability to analyse data. It sounds obvious, but the more data collected, the deeper the ability to analyse and optimise to increase performance, leading to a better ROI.

My most successful clients are utilising all of the above to make sure they’re running successful mobile marketing campaigns for their clients. The main things to think about are:

  • Use a reliable mobile tracking protocol — This is essential to reduce discrepancies and get paid out on all your conversions.
  • Be flexible with your business models — understand your client’s objective and think beyond the install.
  • Collect as much data as possible — This will help you to optimize and increase performance. ROI is the name of the game!

Looking to take your mobile campaigns to the next level in 2016? I think the trends we’ll see next year are:

  • TV app and other social apps opening up for monetization; Snapchat and Pinterest.
  • YouTubers and social influencers will become more utilized by ad partners.
  • More widespread view-through attribution.
  • Multi-touch attribution will become much more of a reality for ad partners.