Traditional performance marketing involves sharing the responsibility for lead generation with companies outside your organization (e.g. distributors, resellers, agents, and alliances). This creates an element of risk because you’re putting your brand reputation in the hands of others, and sharing consumer data with companies and people you have no direct control over.
Technology and Data
Over the last decade, advances in data management technology have driven a worldwide race to access, and act on, data to bolster sales growth. Today, faced with more pressure than ever before to continually improve marketing campaign performance, performance marketing leaders are taking greater control of data – essentially bringing data analysis in-house, whilst continuing to outsource strategy and tactical execution.
Taking control of the relationship data and technology providers ensures that you are in charge of the numbers and you have full visibility on what works and what doesn’t. It removes the black box element and allows you to develop more granular insights by combining the data with your first-party data. It’s important to be open with your suppliers and affiliate partners when you decide to do this. Make sure they understand that the goal of doing this is to enable them to do more, it’s not a criticism of their work.
It’s also important to assess whether the current technology is best suited to your business needs. Agencies often have preferred technology agreements based on the volume of activity they put through those platforms – the more they put through a single platform, the lower the cost. If this is the case, you should put out an RFP to the market and dig into exactly how each technology works in order to identify which one is best suited to your activity and business goals.
Once you have control of performance marketing data there are lots of different types of analysis you can do, for example, customer journey mapping; shopping basket analysis; new vs. existing customer analysis; and real-time performance analysis. By doing so you will be able to provide your affiliate partners and suppliers with insight into behavior across different audience segments which will allow them to do more advanced targeting and optimizations e.g. customized offers, day parting, and traffic source optimization.
Real-time data analysis is one of the most powerful tools for performance marketers as you can see immediately if something isn’t working and respond quickly thus ensuring that minimal spend is directed to these areas. Once you identify the root cause of the performance issues you can then make the decision whether performance can be saved through a change in approach or whether you need to stop working with that company.
Performance Marketing Partner Selection and Commission Analysis
Another benefit of in-housing data analysis is that you will have a better view of how each performance marketing partner is performing. Low-performing partners can then be removed from your programme and you can increase the amount you spend with your best-performing partners. This tactic will provide an immediate uplift in performance.
You will also be able to see if the commission model with each partner is right. For example, a CPA model is best suited to suppliers that provide a high volume of sales (such as Quidco), whereas a CPL model is much better suited to a lower volume site such as Marketing Punch. Optimising commission models will save you money and improve ROI.
Ultimately, the role of performance marketing data is to turn potential buyers into sales. In order to do this in the most effective way possible, you need as much high-quality data as possible and a lot of that will sit in in-house systems. Taking control of data allows you to combine first-party and third-party data sources to generate better insights that can be shared with your performance marketing partners to facilitate better optimization and improve ROI which benefits both parties.
Also Read: Why Buy Data When You Can Generate Your Own?