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At TUNE, we’ve always said that all marketing should be measured on performance. And 2018 may just be the year that the entire industry agrees. We recently partnered with Acceleration Partners to survey nearly 2,300 performance marketers in the U.S. and U.K. who manage a combined $16.6 billion in annual sales. In this article, we’ll address key findings from the report to understand important trends in performance marketing this year.
Growth Rate Not Slowing Down
One of the most notable trends is the fast clip at which performance marketing continues to grow. With fairly mature industries, you rarely see compound annual growth rates of 10% each year, but that’s exactly what Forrester predicts for performance marketing through 2020 at least.
Brand and Enterprise Budget Moving to Performance
Along with that growth comes major moolah being allocated to it. In our survey, an average of 62% of brand and enterprise marketing budget was moving toward performance marketing. In fact, 128 of the 2,300 people we surveyed said a full 100% of brand and enterprise marketing budget was going straight to performance in 2018.
Performance Marketers More Ubiquitous Than Ever
Whereas years ago affiliate marketing could’ve been associated with click-bait ads, performance marketing is now just as mainstream as brand marketing itself. In 2018, we’re seeing performance marketers in all corners of the marketing ecosystem. The majority (31%) work for marketing platforms, followed by agencies and brands (both 25%) and ad networks (16%).
Social and Mobile Rule, But Not Without Their Challenges
Performance marketers turn to social media and mobile for the majority of their campaigns.
Social media and mobile are big for performance marketing. Learn more in the full report.
According to a 2018 report by Merkle Digital Marketing, Facebook spend excluding Instagram grew 48% since last year, with CPC and CPM increasing 10% and 70% respectively.
According to the same report, Instagram spend increased since last year by 62%, with impressions more than doubling. Instagram, however, has its challenges for performance marketing, given its long-standing policy against links below photos. Many performance marketers are working to find ways around this by making use of links in Instagram Stories, the brand new Instagram TV (IGTV), or by measuring influencer campaign effectiveness through promo codes, hashtags, or even custom products. (More on measuring influencer campaigns effectively here.)
Even more troubling is our research revealed that only 62% of performance marketing offers are mobile-optimized, which leaves a glaring gap given most people are checking social media and email via mobile devices.
Better Together: Paid and Organic Marketing
This year we’re also seeing performance marketers get increasingly savvier, planning their performance campaigns alongside organic marketing like public relations and content marketing. Our research consistently shows that this is the most effective way to get the most bang for your buck.
Experimentation With More Attribution Models
We’re also seeing some changes when it comes to attribution models. While last-click is still popular, performance marketers are also using multi-touch, first-click, and position-based.
Performance marketers are experimenting with a wider range of attribution models in 2018. Learn more in the full report.
New Technology Like AI Set to Automate Performance Marketing
With the breadth of channels, partners, and reports to analyze, performance marketing has never been more complex — but new technology may help. Automation and AI, for example, can help performance marketers make the best decisions, no matter the scale they’re working with. Read more about how we see AI changing the performance marketing industry.
The Industry Taking Steps to Combat Fraud
At TUNE, we’ve long believed that fraud is not performance marketing’s issue, but a challenge the entire industry can unite to improve. One way we see that happening is by better aligning incentives. As we move through 2018, we’re hopeful that performance marketers will be incentivised to show ROI, instead of just traffic or leads.
“Being able to drive performance partnerships in more channels and then evaluate and optimize them for true results will effectively align incentives.” – Lucas Brown, TUNE Co-Founder
To learn more about where performance marketing is right now (and where it’s heading) check out our full report: “Performance Evolution: Putting the Brand Budget to Work.”
Author
Becky is the Senior Content Marketing Manager at TUNE. Before TUNE, she handled content strategy and marketing communications at several tech startups in the Bay Area. Becky received her bachelor's degree in English from Wake Forest University. After a decade in San Francisco and Seattle, she has returned home to Charleston, SC, where you can find her strolling through Hampton Park with her pup and enjoying the simple things between adventures with friends and family.
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