Stay on top of this new trend by taking note of performance-based deals in the offline space.
A friend of mine, who was a longtime executive at one of the major broadcast networks, once told me that at the network, the one thing they never did was sit around and ask themselves, "Does any of this @!#% work?"
Digital advertising has taught marketers to expect more from their ad spend. Namely, there is an expectation that advertising should be directly related to some performance metrics.
I've run into many people who believe the online world created this model for advertising. However, purchasing media based on its performance is not entirely new. What has happened, however, is that digital media has made pay-per-performance a bigger part of everyone's budget.
Tying Advertising to Performance Is Not New
Performance-based media has been available in nearly all offline channels for quite some time. And while it is by no means the normal method of buying offline media, it is a growing trend, given the glut of new cable channels, radio stations, etc.
Integrated marketing professionals should take note of performance-based deals in the offline space. But how can an integrated marketing practitioner use offline performance-based media?
In most cases, offline performance-based media is tracked and paid for by calls and/or leads generated through a unique 800 number. Nowadays, media companies taking these deals may also look at tracking by unique site visits, and form fills. It is extremely rare, but not impossible, to find an offline media provider who is willing to take on a cost-per-acquisition or cost-per-sale.
Pay Only for Response, but Get the Cross-Media Benefit for "Free!"
One of the key reasons to include offline performance-based media in an integrated strategy is that not only do you get the consistent direct return on your investment by setting the payouts, but you can also get much of the same cross-channel value that offline media traditionally delivers. For instance, a successful performance-based television campaign running at volume will impact your SEM volume, direct traffic, and response to other offline channels like direct mail, radio, and newspaper.
It's in the broadcast space, both television and radio, where an integrated marketing professional can best leverage performance-based deals. In our experience, a marketer may see a 20 to 30 percent lift in overall web traffic and activity once a performance-based television campaign is running at full speed. Radio can similarly drive activity well beyond the specific metrics used for the performance-based deal. In fact, we've seen radio campaigns where for every one lead generated via the phone, roughly five additional leads come through the web. The best part is that you typically only negotiate a payout or bounty on the phone activity…the web activity is "free."
Not All Offline Performance-Based Media Is Equal
However, not all offline performance models have the same impact. With readership declining in print media (specifically newspapers), response is limited, which means a rollout of performance-based print can take six months to a year before you can generate enough volume to be meaningful. The cross-media impact of performance-based print is also limited - meaning payouts need to be set at a level that is ROI positive from the get-go.
Certainly with traditional media buying methods you're able to have greater control over the reach and frequency of your message, but for many, the trade-off of shifting the risk to the media provider is well worth giving up some control and visibility into placement.
There are some limitations; particularly in television where ad inventory is limited for performance-based media opportunities…especially for short form spots (2 minutes or less). With major brands returning in greater numbers to TV in the last couple of seasons, performance-based deals are becoming harder to come by.
Radio, however, can be a great source of performance-based media. Consider that according to Arbitron, overall radio listenership has risen slightly over the last couple of years while there is an ever-increasing amount of "audio" venues for your commercials. The pressure from non-traditional radio channels like SiriusXM, Pandora, Slacker, etc. and increased competition for local advertising from online media has made performance-based deals a realistic opportunity in radio.
Do you think offline performance-based media can have a role in your integrated media strategy? I'd love to hear your thoughts.
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Gavin Ballas is vice president of business development for MDC Partner's Integrated Media Solutions, an integrated direct response media agency. He has nearly 15 years of experience building direct response campaigns throughout online and offline media channels.
Hong Kong, May 5-6, 2015
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