All Media Should Become Performance Media
The digital media landscape and its associated advertising models are being shaken to their core by the move to a cookieless landscape and increasing privacy restrictions.
But are they really? And even if so, is that a bad thing?
The above assertions have been made so many times that we've all come to accept them as industry truth — and a negative one at that. But before we spend more time decrying Google's planned third-party cookie deprecation and new privacy-focused legislation and policies, let's pause to consider that maybe our industry is arriving at precisely the place we've been trying to get for decades now: a reality where all media can become performance media.
The Long Road to Actions, Not Ads
The promise of the web started as a new way for consumers to access information interactively. Soon, search engine marketing helped marketers begin to understand how consumers explicitly sharing their intent in the form of a query created arguably the most powerful marketing channel the world had ever seen.
The Yellow Pages, once an $11 billion marketing segment, was completely subsumed by the reverse direct marketing that search provided, with consumers self-selecting before being shown information. This seeped beyond search into display soon enough. Once ads began to focus more on behavioral targeting than the context of the page, the shopping funnel collapsed.
Now, with Amazon as one of the world's largest advertising platforms, consumers are further down the funnel everywhere they navigate online because of the expansive first-party data and retargeting efforts of Amazon, Google, and the other major ad platforms.
Today, with Amazon selling billions in advertising on its pages — far more than all newspapers in the world online and offline — can we all accept that what we used to think of as a "purchase funnel" has been compressed into shopper marketing?
Taking this a step further, all media buying today is and will continue to shift toward a performance media model — one in which success can be measured in actions, not ads. This evolution is most obvious in the rise of the retail media titans, kicked off by Amazon, and the growing number of retail media networks that deliver value to brands in the form of sales, not just impressions.
"If it Doesn't Sell, It Isn't Creative."
Was David Ogilvy really a performance marketer at heart? To him and other founding fathers of the advertising industry, the branding art they were in was always about selling. So, really, for those who look down at performance marketing, should any of this come as a surprise?
Virtually every major trend within the digital advertising industry over the past 20 years has pointed us toward this reality — one where advertisers want to pay for real results and publishers and platforms want to be compensated for those results. We saw startups and established brands alike pile into the direct-to-consumer space on the strength of search and social media platforms' ability to collapse the funnel and drive sales. The saturation of those channels was a foregone conclusion.
More recently, every major company with significant traffic (and first-party data) has raced to launch dedicated commerce initiatives. That's because they know ad-based models are rapidly being replaced by ones focused on actual purchases, which is perfectly in alignment with consumer behavioral shifts in this mobile era.
It's Time for a Perception Shift
What's perhaps most interesting about the culmination of this push from ads to actions is that our industry's future is actually best represented by a model that many have come to view as a thing of the past: affiliate.
Built on the notion that businesses should be paid for driving transactions, affiliate is very much an embodiment of the model that will dominate the future of media and marketing. Influencers, media publishers, tech platforms, retailers, you name it — they're all now operating in a reality where paying for performance, not impressions or taps, is going to be the default advertiser expectation.
And yes, this is a good thing for everyone. Or at least, it can be.
The continued shift of brand dollars to performance dollars is giving rise to models that represent a win for all parties, provided they're prepared to pivot accordingly. For advertisers, the value of this shift is obvious, as it offers the ability to tap into true zero-waste strategies where every media dollar spent is driving revenue to the bottom line.
For publishers making money based on impressions and taps, there's an opportunity to diversify into commerce-focused models that move them from focusing on behavioral targeting to supporting content that drives real value and buyer intent, which in turn will drive revenue.
As publishers' strategies evolve to include driving commerce, an even more powerful advertising model will emerge for those publishers — a retail-media-like business. If you think of Amazon as a publisher, it habituated shopping behavior on its site. Then, it began to sell ads to its marketplace sellers, because it had habituated so many users to shop; advertisers that wanted more sales had to pay for them. This is the same path that publishers will follow — and the result will be a better internet.
The result of these shifts will, ultimately, deliver the greatest value of all to consumers, who will no longer be barraged by invasive advertisements and will instead be directed to seamless purchasing of relevant products within the platform or environment of their choice.
So maybe, just maybe, it's time for us to stop digging in our heels against the tidal wave of change that's sweeping over our industry. This wave is, in fact, washing us up on the beach we've been seeking all along.
The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.
Michael Jaconi is co-founder and CEO of Button.