Many brands, and even people within the performance marketing industry, have a lack of understanding regarding the concept – according to US-founded company CAKE's boss.

President of the business, which lets advertisers track, analyze and optimize their online campaigns, Jeff McCollum, said one of the main reasons it has created its latest infographic is to showcase the direct benefits performance marketers receive by participating in this measurable industry. As CAKE provides business intelligence for performance marketers, McCollum, who opened the company’s London base earlier this year, said it is CAKE’s mission to maximize the impact and optimize the value of digital spend for the $98 billion global digital advertising industry.

“Performance marketing is growing at an annual rate of 17% and can provide measurable return-on-investment (ROI),” McCollum said. “Taking all of this into consideration we have seen an alarming number of enterprise brands not participating – so we put this infographic together to educate chief marketing officers (CMOs) on why they need to participate in performance marketing.”

McCollum said he also believes that many people, even within the industry, still struggle to understand the concept of performance marketing; primarily due to the ‘lack of understanding the opportunity’.
He said it is the only truly measurable ROI for your digital spend and the days of just setting up a programme with one source are over as the opportunity is now global.

‘Ignorant Attitude’

“Advertisers enter into performance marketing without the conviction that they understand their own business. They want to believe or think that performance marketing might perform in a different capacity so they fall into the trap of not properly managing their digital spend,” McCollum begins.

“For example, they might see a performance campaign convert at 25% plus, yet not want to know why that is three times what they normally see for conversions. This ignorant attitude was a result of too much trust, lack of transparency, and no tools available to monitor. But that is all changing now.”

On the subject of the growing emphasis on performance marketing and negative associations with the 'affiliate marketing' term, McCollum said he feels the industry has grown beyond what people consider ‘affiliate’ marketing into a ‘professional industry with real innovation and technology’.

He said performance marketing is not just conversions or sales as it now encompasses everything from mobile, web, click-to-call, and lead generation.

Blurred Lines

“There is definitely a blurred line between the terms ‘performance marketing’ and ‘affiliate marketing’ and you are correct when you say that there is a strong negative connotation associated with the latter,” McCollum said.

“I would suggest that the name in addition to the industry itself is what has helped the performance marketing industry grow into a more professional and innovative one. I do not think we are there yet but I can see positive steps in that direction.”

McCollum summarizes performance marketing as the ecosystem that houses every facet of a company’s media spend – whereas affiliate marketing refers to a more niche market and has been confined to specific parameters. “It also cultivates the idea of ‘overnight affiliates’ or in other words, online marketers who start a business overnight and are heavy participants in fraudulent behaviour,” McCollum concluded.

Check out CAKE's infographic below

Written By:

Pippa Chambers