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Programmatic advertising out-performs direct ads in UK as affiliate marketing evolves

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With Affiliate World Europe in Barcelona taking place this week, Paul Skeldon takes a look how programmatic advertising is starting to out-perform all others. Here’s why

The UK’s programmatic advertising market took a significant step forward in the second half of 2018, with programmatic viewability rates outperforming publisher direct buys across desktop and mobile web display for the first time.

The result comes as confirmation that programmatic ads are now no longer seen as low-quality inventory and are being used by some publishers to market high value content via private marketplaces and that decreasing amounts of brand damage are being done via this form of marketing.

According to the Integral Ad Science (IAS) UK Media Quality Report for H2 2018, programmatic UK desktop display ads meeting the minimum viewability standard rose by 8.2% from 63.4% to 69.1% in the second half of 2018. In comparison, publisher direct ads rose from 65.1% to 67.7%.

Meanwhile, 62.4% of programmatic mobile web display impressions met minimum viewability standards, having increased 16.6% year-on-year from H2 2017 to H2 2018, reflecting the industry’s demand for higher standards in the programmatic inventory from the buyer side.

Affiliate marketing evolves

The figures not only point to how affiliate and programmatic advertising are moving on, but also how they are set to evolve in 2019. Where 2018 has seen them gain acceptance and become a vital part of the whole advertising mix, they are also setting the scene for the development of the whole digital advertising market.

According to Matthias Stadelmeyer, CEO of Tradedoubler, “Affiliate marketing is one of the most exciting disciplines in digital marketing. It is predicted to be a US$6.8 billion industry in 2020 and has always been an incubator for new disciplines.”

For 2019, Stadelmeyer believes there are four main trends that are going to further transform the market: influencer marketing, the growth of voice search, data driven insights and mobile domination.

“Influencer marketing is growing rapidly and has almost established itself as its own vertical,” he says. “”74% of people trust social networks to guide them to purchase decisions. And 75 % of all marketers claim that they have allocated money to influencer marketing.

Voice search is a rather new topic, but with a massive push from big players like Amazon, Apple, Facebook and Google. “So this will have a big impact on our business in the future,” says Stadelmeyer. According to ComScore, 50% of all searches, will be done on voice searches by 2020. Around 30% of searches will be done without a screen, via third party tools.

Where it gets interesting is with data-driven digital strategies. “90% of all data that was generated in the lifetime of mankind was generated in the last two years,” explains Stadelmeyer. “Massive data growth is also true for our affiliate marketing campaigns. In order to get to actionable insights, affiliate marketers need to establish new methodologies.”

Finally we come to mobile and its domination. “Mobile domination is not really new, but in my opinion is at the most underestimated part of digital marketing,” he says. “Under initiatives like Intelligent Tracking Prevention (ITP 2.0) it’s becoming increasingly hard to track with cookies. After two years of major efforts to update all client tracking, we still have around 20% of clients who track only with cookies. They exclude all pure mobile publishers, who don’t get incentivized. Advertisers who don’t offer cross-device and who don’t have a  real mobile strategy in the long run will have a big disadvantage.”

Ecommerce and other trends programmatic advertising trends

Affiliate marketing is also become an intrinsic part of the ecommerce journey, being both an on-ramp for many consumers and a controllable and measureable marketing channel for etailers.

“The wish for e-commerce and marketing managers to see and analyse the contribution of affiliate marketing in this mix and the added value of connected Publishers will be even stronger [in 2019],” adds Reinout van der Lende, Head of Sales Benelux for Tradedoubler. “Also because more and more other types of Publishers are being connected with an affiliate program. And often these Publishers are being rewarded on a CPC model or even with fixed fees but still they can be connected through an affiliate network.”

He continues: “Influencers using blogs and social media are also driving performance marketing. As 2018 was already the year where influencers have entered the area of online (performance based) marketing,  in 2019 these type of  ‘content’ Publishers  will become more important for brands. Bloggers and Instagrammers now have all the tools to be professional partners for brands. Reporting tools in this matter are key. Preferable delivering performance insights through all online channels.”

Social media is also opening up where affiliate marketing operates, with marketers increasingly using Facebook ads to spread their message.

“Many are even branching out into Facebook’s Messenger tool to broaden their efforts,” says Tara Johnson, a blogger for CPCStragey.

However, she adds a word of warning. “Keep in mind, though, Facebook isn’t always welcoming to affiliate marketing – it’s been known to ban some advertisers, actually –so make sure to watch your campaigns closely.

Amazon also doesn’t allow advertisement of its affiliate links, so steer clear of using Facebook ads for those products as well.”

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