Performance agencies are expanding their relationships with big brands as they move more budget to digital and the upper funnel becomes more measurable.
“Everything has become performance,” said Michael Kahn, CEO of Performics, Publicis Media’s performance agency and specialty practice. “Clients need to know that a brand-building effort led to a revenue outcome as well.”
In the early days of programmatic and biddable media, Performics worked with transactional clients to meet direct-response objectives. Today, Performics works with its own clients as well as clients across Publicis Media, including Procter & Gamble, Nestle and L’Oreal, as the pressure rises for CMOs to drive revenue through all marketing efforts.
As CPGs sell more products on ecommerce platforms such as Amazon, Alibaba and Walmart, it’s become easier for them to measure ROI against sales, Kahn said. But transactional data, along with dynamic creative optimization and artificial intelligence, also gives performance agencies the opportunity to inform branding.
“We’re sitting on so much transactional and behavioral data that can deliver information for creative briefs, geographies and areas of focus,” Kahn said.
For example, Performics tracks online consumer satisfaction with brands and matches it to data from campaigns run on Google, Facebook, LinkedIn, Pinterest and other social channels. Performics says that combination of first-party and behavioral data allows it to target consumers with the right message, in the right place, when they are most receptive.
“We turn influencer content into ads, drive the consumer who is interested in that topic back to that earned asset and retarget off of that for a revenue outcome,” Kahn said. “It’s using what we’re seeing in the marketplace to drive a performance outcome.”
Digital agency iCrossing, which also grew up in the performance space, uses content as a vehicle to measure consumers’ relationship with a brand and ties that back to purchase. Using a combination of behavioral and referral data, iCrossing creates and distributes branded content on social and attributes online purchases or interactions to the number of likes, shares and comments on a post, as well as the amount of time spent with it.
“The more first-party data you have from your clients, the more easily you can attribute certain content to a transaction,” said Anne Bologna, chief strategy officer at iCrossing. “Engagement metrics tied to purchase is among the most interesting things a brand can look at today.”
Although performance agencies are expanding their services to include upper-funnel campaign measurement, many struggle with outdated perceptions when trying to get a meeting with big brand CMOs, Kahn said.
Once they do, the conversation is often first about business transformation, since many marketers don’t yet have the data or tech infrastructure to connect branding to an ROI-based outcome, Bologna said.
“On a scale of one to 10 in this industry, we’re probably at a three in terms of being able to measure full-funnel attribution,” she said. “But the ability for us to get there is accelerating.”
As performance agencies vie for new work, they’re also fighting commoditization.
Publicis Groupe’s Zenith, for example, underwent a major rebrand last year to expand its focus beyond performance-driven media. Now, Zenith helps clients organize their data, fill in the gaps with third-party data partnerships, select and activate their ad tech stack and redesign go-to-market strategies.
It’s work traditionally done outside the scope of the media agency, said Zenith global brand President Vittorio Bonori.
“We’re helping them match data and tech solutions,” he said. “We’ve never seen it before.”
Zenith’s clients, many of which are big, blue-chip brands, are broadening their service agreements with the agency, but cultural resistance and traditional agency payment terms stand in the way of full adoption. Many clients work closely with consultants on business transformation while others are taking programmatic and transactional services in-house.
Bonori hopes brand marketers will become more comfortable sharing data and paying agencies based on performance outcomes so they can continue providing value in a transforming space.
“Our pricing model is going to evolve into licensing fees, consultancy fees and tech fees,” Bonori said. “Clients have the opportunity to shift risk outside the marketing team into our space.”
This post was syndicated from Ad Exchanger.