Performance Marketing Makes Sense
So this is my first blog post. I thought it would feel a lot different.
Hi, I’m Jim Lillig. This is the place where I intend on spilling my guts regarding performance marketing (and whatever else that comes to mind). In the 10+years spent as an online marketer and entrepreneur, I have had occasion to have been both an affiliate and a merchant, to work with CPANetworks and to experience affiliate marketing management on a largescale. So I get what it takes to keep an affiliate happy, andI also get that a merchant has to make a buck to stay in business.
Mergers, Acquisitions and Performance Marketing
Affiliate marketing has been the red-headed stepchild of the onlinemarketing space for many years (no offense to red-headed stepchildren, it’s just a saying). Just recently has it been able to shed it’s stigma as the wild western frontier of the marketing landscape online. This has been ushered in by events such as Datran securing $60M in fundingin 2005 and more recently the exorbitant acquisitions in the online advertising space including: Yahoo!’s $680M purchase of RightMedia and their$300M purchase of Blue Lithium, ValueClick’s $58M acquisition of Commission Junction, Google throwing their hat in the Pay Per Action text link and banner
market as well as paying $3.1B for Doubleclick, Linkshare being acquired by Japan’s largest e-commerce company Rakuten (who also own Infoseek.com/Go.com), Aquantive being acquired for $6B by Microsoft, and the list will continue to grow.
The“web-sizing” of the ad market is predictable given the fragmentation of the advertising audience in today’s markets. And what is driving advertising dollars into the web?
I believe engagement is to blame. The final frontier of advertising is to connect a product (and ultimately a brand) with truly interested consumers in a relevant, meaningful and
lasting way at a time when they have the propensity to purchase or consider a purchase. And how did this creep into marketers consciousness? Well, for me, I believe it has a lot to do with A.C. Nielsen’s People Meter.
This standard of the radio & TV advertising industry for over 60 years, which essentially has single-handedly determined the fate of TV ad rates in June of 2006 announced a sweeping plan to revamp its entire methodology to include all types of media viewing in its sample. This essentially was saying “ooopps, we thought the data was good, turns out it wasn’t. Sorry.”
Couple this with faster Internet speeds and the onslaught of convergence (having your TV signal come in over digital or fiber optic internet lines) makes for more consumers watching less TV and spending more time using the Internet for their entertainment choices. TV on the web has finally grown up. And the more it looks like TV and feels like TV, the faster it will be adopted. Because the Internet experience can involve many more elements to engage the user, it is only logical that advertisers will shift their TV budgets to online advertising (as well as those of their ad agencies as well), to a venue where they can better know who is interested in their products and services than completely throwing their budgets into TV advertising on the national or even regional campaign levels. I wrote an article on this subject for a now defunct Marketing Journal startup called Project BlackBook, The title is The Case For Transparency and Truth in Online Advertising.
So this is where Performance (or sometime called Affiliate) Marketing is now. Waiting for big advertisers to realize that spending on CPM buys is not always the best use of their ad dollar. Affiliate marketing that pays out only when a sale is made is a simple enough concept that has been practiced in the offline world since the day money became important. The future will be a much more complicated landscape to navigate with new choices for advertisers popping up almost weekly it seems. Advertisers will find, I believe, that performance marketing will become a logical piece of their overall Internet advertising strategy (as the size of the acquisitions above hint at).
Sharing The Love
This being my first post, I want to thank a few people who have made me realize that this
isn’t that hard (yeah right) and encouraged me to share some of my ideas with the world. Seems somewhat lofty when you put it like that.
Yanik Silver, master copywriter, entrepreneur and showman and a friend who has always encouraged me to shoot for a higher target.
Jim Kukral, who is always inspiring to bounce ideas off of.
Wayne Porter, who taught me never to trust anything online.
Rosalind Gardner, who is always an inspiration and has always helped me to focus my efforts.
Jon Keel, the Godfather of SEO, who is a constant mentor to me for SEO and life in general.
Corey Rudl, as it was his Internet Super Highway course and the Boulder Summit of 2000 that pointed me in the direction I am headed in today.
I look forward to hearing your comments and blog article suggestions; please post often as it is hard to know if there is anyoneout there sometimes.