Five signs your media agency is delivering fake performance
Optimise Media’s Chris Barron lifts the lid on the realities of ‘performance advertising’, and how the phrase has been hijacked by media agencies and programmatic ad tech companies.
Performance media is a phrase that is bandied about loosely and almost indiscriminately by digital agencies and marketers, often to the detriment of the advertisers it was designed to serve.
By definition (and according to IAB Australia’s glossary) performance advertising is where advertisers pay based on a set of agreed upon performance criteria, such as a percentage of revenue driven or on the volume of sales leads delivered e.g. cost per action or cost per lead etc.
In recent years, the term “performance” has been hijacked by media agencies and programmatic ad tech companies to refer to any digital activity where performance is tracked and measured.
Yes of course, fragment your KPIs and look at everything individually so you don’t get a full picture. Genius. Hey that OOH campaign has a poor ROI! Turn it off.
Scrutinise the metrics to find outliers and when you do understand their role in the grand scheme of things. Looking at each line items CPA leads you down a funnel of efficiency, not growth.
If you don’t have a macro view of your campaign, you won’t know what direction to go in matey, and if anything, it will send you backwards.
There’s a reason Omni channel is becoming more acknowledged within the industry, it’s because the synergies between channels is much more important and challenging to interpret than a simple CPA on a page.
Don’t be myopic.
“Your agency talks a lot about “performance” but only ever buy on a CPM basis” – unless you are a programmatic unicorn, the only way to buy is on a CPM. It’s what inventory is traded and valued on across every single exchange. Suprised you aren’t aware of that.
Actually you can buy inventory on an acquisition basis but that wouldn’t be profitable to your media agency who would rather spend through their own desk would it?
Surprised you’re not aware of that…
I think what you are trying to say is that good programmatic strategies focus on solid and trusted partnerships between advertisers and programmatic buying platforms.
Trust which comes in the form of transparency from the platform in return for access to valuable data from the advertiser.
As a result, both parties can cooperate in a buying strategy that goes beyond achieving a CPA, but which focuses on acquiring customers with a Customer Lifetime Value higher than their acquisition cost
More involved but less restrictive than a CPA being fixed or the final performance metric to work towards
Now watch them all go on the attack to try to protect their dirty little game that rips of advertisers and genuine publishers.
Simple test would be random sampling of actual customers or sales outcomes and do tracking back analysis eg. not just how or which channels they emerged from but whether the actual message matched their experience.
The results can be then used to inform not just future strategy, but to update and maintain one’s own system, so that new strategies and campaigns, requiring high investment for unclear outcomes, can be avoided.
It may seem more difficult or high workload in short term, but maybe beneficial in the medium long term as conducted in house through customer base, joining the circle.
Solely paying on a CPA for all your marketing is great in theory, but in practice it’s not that simple – for a few reasons.
1) There’s a limited volume of traffic available from performance channels, because most publishers in the digital market won’t work on a CPL or CPA, and the publishers that do usually have scalability issues. So once the initial pool of ‘easy’ traffic is exhausted, it’s hard to increase volumes without massively upping the CPLs or CPAs.
2) Performance channels typically perform best (i.e with the highest volumes at acceptable CPLs/CPAs) with established brands that have an omnichannel strategy. It’s a lot harder to sell via performance when the brand is unknown.
Sometimes it’s more cost effective to pay for brand and get the uplift from performance publishers than simply throwing more money at performance publishers.
3) Agreed publisher CPLs/CPAs can be higher than what a client would pay if they were paying per click or per impression. Typical examples of this are FB ads, Native, and Retargeting via display. Also, frequently occurs with PPC.
In summary, paying on a CPL or CPA is fantastic, but it’s not an entire marketing strategy, and it has it’s own challenges.