B&T recently chewed the fat with iProspect’s Dan Kalinski, Ollie Rapson, Mark Byrne about all things performance marketing, including whether or not the likes of Accenture, Deloitte and PwC are a threat or an opportunity for agencies specialising in this sector.
How do you rate the performance marketing industry in Australia compared to overseas?
Ollie Rapson: The progression of performance marketing is variable by industry. In certain industries, Australia outstrips other nations and in others, it lags.
Generally, the uptake and leverage of performance marketing is dictated by how tangible a return and investment can be. It’s no real surprise that the banking sector’s investment in digital marketing is world-leading here in Australia, where it’s never been faster for people to get a credit card. Inversely, Australian retailers struggle – particularly those selling big ticket items – simply because delivery costs eat into margins so much. This doesn’t happen in other markets like the UK.
Mark Byrne: Australia is often cited as a ‘Goldilocks’ market for innovation – not too big, not too small. Hence, it’s a testbed for betas for the likes of Google and Facebook, which gives us the advantage of often being at the forefront of tech roll-outs.
From an agency standpoint, there is a very collaborative style of work in this market. This gives us more opportunity to develop integrated campaigns across channels.
What is the biggest challenge that iProspect faces going forward?
Rapson: Talent supply remains a big challenge. Young people typically don’t come out of university with strong digital marketing skills, though this is improving. It’s the time and money invested by agencies into their development that makes them leaders in the field.
With agency fees coming under pressure, the ability to retain people on dollar value alone is becoming quite the challenge. That’s why it’s so important for agencies like iProspect to provide unique opportunities – such as the ability to work in different locations, flexibility, culture, opportunity for progress – to keep our staff engaged over the medium- to long-term.
Do you consider the likes of Accenture, Deloitte and PwC a considerable threat to iProspect’s business model?
Dan Kalinski: iProspect and our sister agencies have always been, and continue to be, at the forefront of our clients’ businesses. This is both at a strategic leadership and implementation level. We are the ones leading discussion and debate with our clients, and the scope of our experience and capabilities in the industry means we take the leadership position when it comes to executing on strategy, on plan and on delivery.
We already share clients with some of the consultancy firms and are of the view that they can actually add value to the ecosystem and challenge some of the outdated concepts, especially around remuneration or the overall value of digital. It is, however, our opinion that clients ultimately need to choose a partner that can provide a well-rounded service, strategy and point of view to deliver a solid business result.
Ultimately, the relationship can be symbiotic as we approach our clients’ problems from two different angles. At iProspect, we always start with clients’ bottom line on the one hand and customer and conversion data on the other, and formulate appropriate strategies based on results from execution rather than on hypothesis or best practice. Additionally, whatever we do is firmly linked to other channels and touchpoints across the entire marketing ecosystem. It’s the combination of execution, ‘pain’ and risk sharing, joined up thinking as well as real campaign and customer data, which means agencies will always remain central to clients.
What should marketers be investing in now?
Rapson: Marketers need to understand data – what exists, and how they can use it. There is a vast, untapped ocean of information that could be used to redefine marketing strategies. Well-honed and targeted ads are key to reducing excess spend and improving propensity for audiences to interact. Broad stroke assumptions don’t cut it anymore. Data is an essential part of all we do.
Byrne: There are two key areas for marketers to focus their investment. Firstly, putting the infrastructure in place to capitalise on owned data. This means having the right tech, the right talent and the right operating structure to collate and activate off of different data sets.
Secondly, brands and marketers need to invest in ways to create rich and engaging (data-informed) content – at scale – in order to allow them to fully take advantage of the personalised messaging that will become available.
What will the performance marketing industry look like in 10 years’ time?
Byrne: 10 years is a long time! I think within five years, words like ‘digital’ and ‘performance’ won’t be used in this industry. Even today, people don’t think about online or offline, digital or ‘the real world’.
Equally, we’re already nearing a place where everything can be tracked, measured and optimised against, so this idea of performance (versus brand) won’t exist.
From an industry perspective, agencies will be able to fully deliver on providing consumer – rather than campaign – experience, and overall experience rather than individual channel performance.
Ollie: Everything is striving toward bringing brand communications in sync with people’s lives, behaviours and time. Marketing will be slick, in tune with lifestyle choices and seamless.
As Google and other publishers gather more and more information, and provide better technologies to whittle down ads to the exact consumer, the more they will be able to charge as the potential value of the consumer will be far more tangible. I see a future of pay on ‘performance-only’ models being far more common, and this is starting already.