[ European Publisher Landscape Report 2013 ]

Transcription

1 [ European Publisher Landscape Report 2013 ] The third annual European Publisher Landscape Report includes input from more countries than ever before in addition to year-on-year comparisons. In Association With Survey Partners

2 Executive Summary...3 Landscape Report 2013 Highlights...4 European Survey Demographics...5 Gender...5 Publisher Positivity...5 Age...5 Beginning of Performance Marketing Activity...6 Performance Marketing Employment...6 Current Work Situation...7 Publisher Negativity...7 Company Origins...8 Territories of Operation...8 Verticals...8 Industry Findings...9 Emerging Markets...9 As Viewed by French Publishers...9 As Viewed by Belgian Publishers...9 As Viewed by Dutch Publishers...9 As Viewed by UK Publishers...9 Received External Investment? Percentage of Traffic from Mobile (Including Tablets) Visitors Generated by Organic SEO... 10

3 Organic Traffic Year-on-Year Average Monthly Commissions ,000-50,000 Monthly Earners Advertiser Must-haves Preferred Method of Working with an Advertiser Are you Pushing Advertisers/Networks to Implement Last-click Attribution Alternatives? Network Desirables Do You Believe Your Sales Are Incremental? Receiving Tenancy/Hybrid Payments? Average Tenancy/Hybrid Monthly Earnings Most Utilised Technologies in Last 12 Months Concerned About Losing Online Revenue to Offline Sales? Future Trends Biggest Threat to Earnings in Most-used Linking Methods Publisher Positivity Publisher Negativity Predicted Commissions for 2013 Compared to Monthly Commission Earnings per Country Your Future in Performance Marketing Countries Where Publishers Are the Most Positive About 2013 Commissions Countries Where Publishers Are the Most Negative About 2013 Commissions Page 2 of 17

4 The results have now been gathered from the third annual European Survey and once again, we are in a position to examine the results in detail. Before doing so however, it s important to consider for a moment the role of a survey like this in a fast paced industry like ours. With publishers diversifying and expanding their activity, the landscape is no longer comprised of the discrete markets and verticals it once was. Undertaking detailed analysis across Europe allows us to build up an accurate picture of the how publishers are working across territories and is vital if we are to effectively facilitate industry growth. So how does the current landscape differ from what we ve seen before? The first issue to address is the gradual move from affiliate towards performance marketing that has been gathering pace over the last 18 months, and has been cemented in the last year. This is reflected in the rebranding of A4u to PerformanceIN and of course, it s no coincidence that this year, the report has also been renamed the Publisher Landscape Report. publishers surveyed indicating that they are planning to expand into new territories this year there is evidence of growth available. On this note, it s also crucial to further contextualise the report. The survey was this year distributed across a broader range of countries and was available in more languages than ever before. This is a fantastic achievement and is invaluable in helping us to build up a more accurate picture of the European landscape as a whole. However we do need to take this into account in our reading of the results. The increase we ve seen in the number of publishers working part time could be indicative of economic factors, but could equally be attributed to the increased number of responses from emerging markets, with the same true for the news that 75% of publishers earn less than 1000 a month. Interestingly, the latter also tells us that the long tail is alive and well, and is particularly compelling data for those who are concerned about the prevalence of so called super-affiliates. This diversification of publisher activity is a trend reflected in the survey data; with more and more respondents identifying themselves as active across multiple verticals, publishers are no longer confining themselves to one sector but are broadening their horizons to capitalise on new opportunities. This, together with the data we have on publisher demographics, points to an industry which is both maturing and becoming more accomplished and confident which only adds to the importance of detailed industry study. As we all know, the performance marketing industry is fast evolving, filled as it is with innovators and entrepreneurs. This fast pace of development however is precisely what makes it so important to regularly engage in detailed study. If the industry is going to continue to defy trends and to prosper, it s imperative that we continue to learn. The increased reach of this year s survey is a key step in ensuring that our practices remain at the forefront of industry development. As always, economic factors have a significant impact on the shape of the industry, although as we ve seen in the past, performance marketing does have a habit of bucking the (downward) trend. The transparency and measurability offered by the channel is becoming more and more important to international brands and SMEs alike, and with over 40% of Managing Director, Webgains Page 3 of 17

5 The number of publishers operating in all the polled countries has risen, giving the survey a more rounded response across Europe. Upwards of 40% increases in commission earnings have tailed off slightly with publishers instead thinking they re more likely to see a rise in the 0-30% margin. Close to half of all respondents are eyeing up the prospect of expanding to new territories over the coming six months. Negativity towards the publisher business future performance marketing activity has grown year-on-year. Fashion, retail and travel and leisure are the three verticals that most respondents operate in. Reliance on organic search by publishers last year may have declined, but in 2013 respondents increased SEO as a traffic source. There s been a surge in publishers concern about Google updates/ slaps from 2012 to Last-click attribution alternatives are being pushed to advertisers by more than a quarter of publishers. Technology solutions giving advertisers direct access to the performance channel are yet to win publishers over. They still prefer to go down the more traditional route of using a network to communicate with brands. Over three quarters of respondents who receive hybrid/tenancy payments, make up to 5,000 month. Generic text links are the most widely used method of linking Commission levels and conversion rates are the two most important considerations for publishers when they look into working with an advertiser. Publishers are yet to grasp the incremental contribution they make to an advertisers bottom line. Performance marketing is still a male-dominated sector. Only 19% of respondents revealed themselves to be female. Publishers are maturing. Year-on-year the number of respondents in the older age brackets are increasing. Even-numbered years are showing a spike in people turning to performance. For example in 2012, more publishers started up than in 2011 and The same occurred in 2010 and Part-time publishers are on the rise, a trend that can be explained by a slump in the income that s being mustered. Almost three quarters of respondents this year claimed they are earning less 1,000 a month. Home-working is still preferred by publishers. Almost half of respondents said that work from home, rather than commuting or doing both. Over three quarters of publishers businesses consist of less than four employees. Content monetisation techniques and product feeds are the two technologies most in use by publisher respondents. Page 4 of 17

6 Due to the economic crisis, advertisers are increasingly turning to the performance model. Concerns exist (cookie management in particular), but I think a solution will be found, if only because governments want to avoid slow growth and the use of one of the few dynamic sectors. Whilst there was an improvement on the ratio of male to female publishers from 2011 to 2012, the number of women has dropped to 19% from last year s 27%. We feel we build very good platforms and we think we can grow fast in other countries the next year % 50.00% A growing number aged 35 and above are working in performance marketing. The industry is maturing and with it we can expect a renewed level of professionalism as decision makers become wiser and more experienced % 30.00% 20.00% 10.00% 0.00% Under Page 5 of 17

7 Publishers choosing to work part time are on the up. Comparing part time respondents against their average earnings, it s clear that poor commissions are a major factor in the decision these publishers took to supplement their income from elsewhere. Almost three quarters of publishers earned less than 1000 a month in Less than ,000 1,000-5,000 5,000-10,000 10,000-25,000 25,000-50,000 50, , , ,000 Page 6 of 17

8 After several years of significant growth, the earnings in 2013 so far have been significantly lower, partly because of Google updates. Therefore, my expectation is that affiliate networks will contribute less in the future and direct partnerships with advertisers / partners will fill the void left by the major networks. Google uncertainties and changing behaviour of consumer. I see others trying to steal those viewers I have initially found for merchants. Uncertainty related to the creation of the activity. Publisher businesses in performance marketing are dominated by less than a handful of employees. More than three quarters (77%) of respondents ran their projects with four or less. There s also been a rise from 2012 to 2013 in the number of smaller businesses. Companies with 1-4 employees grew 2% year-on-year, as did those with 5-9 workers % 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Page 7 of 17

9 Austria Denmark Italy Norway Poland Portugal Sweden Switzerland UK USA ROI Turkey Other The rise in where publishers are doing business has been apparent not only in Europe, but across the world. There hasn t been one country where a decline in publishers choosing to ply their trade in performance marketing has been recorded. 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% All manner of new verticals appear to have emerged over the last year. Along with the more established sectors, publishers are attempting to carve out their own niche in areas like lawyers, research, green, bio/eco products and sweepstakes. A surprisingly wide spread across the verticals and that is great to see. One of the biggest observations is the difference in the amount of finance spend compared to the UK and US. However this can mostly be explained by the type of financial products available and the attitude to credit in Europe being so different. The way consumers use their money in Europe means that Finance will never have the level of Market Share that it does in the UK. Gavin Male, Managing Director at R.O.EYE. Page 8 of 17

10 17% 28% 17% Italy Portugal Switzerland Turkey UK USA Turkey is hot! The country has been enjoying strong economic growth for the last 10 years and this is reflecting heavily in e-commerce and marketing. Turkey has a young, quickly adopting population where the median age is 29. Turkey is approximately 17 years younger than Europe. The internet penetration is 38% in a country of 75M. Credit card penetration is 45% with an average of 1.8 cards per person. We spend 29.4 hours a month on the internet and 2.7 hours a day on mobile. There is still great space for affiliates and performance marketers to expand to this market and monetise its full potential both short and long term. Emre Burdurlu, Managing Partner at Digitouch Media Group. 40% 33% Austria Switzerland USA Turkey 13% 15% 10% Poland 13% Austria Denmark Finland Greece Italy Norway Poland Portugal Sweden Turkey UK USA Turkey 15% 10% Portugal 8% USA 10% Israel 8% Austria Cyprus Greece Italy Norway Portugal Switzerland Finland Israel Poland RoI Sweden Turkey Page 9 of 17

11 Yes No 20-39% 30% 1-19% 56% None 1-19% 20-39% 40-59% 60-79% % 19.5% 16.8% 17.7% 7.5% 17.3% 21.2% None 1-19% 20-39% 40-59% 60-79% % I'm not surprised to see large numbers of publishers obtaining 60% or more leads through organic search while Google has been doing its best to push paid advertising, organic search is still the best opportunity to reach a wide range of people for a wide range of search terms. Publishers have one crucial advantage in this new SEO landscape, and that's content. Perhaps one of the reasons for the increase in organic search as a lead channel over the last 12 months is that SEO has refocused towards content, and not just content in itself, but good content. That, alongside the increasing maturity of social, puts publishers in a great position. Gareth Cartman, Clever Little Design. 37.7% 17.0% 45.3% Up Down Static Page 10 of 17

12 The number of publishers earning 5,000-50,000 has increased year-on-year from 2012 to When comparing the countries contributing to this mid-range commission bracket, the UK is leading the way. Sweden and are seen to be vying for second place. UK 23% 13% 11% 10% Denmark Greece Italy Norway Sweden UK USA Other 65.5% 4.9% 29.7% Via Agency Direct Via Network Despite the huffing and puffing from technology companies, performance marketing s traditional system is still favoured by publishers. Their outright preference is to do the majority of their business through a network rather than an advertiser directly. At this particular juncture, the network still reigns supreme. Page 11 of 17

13 64.3% 35.7% Yes No Publishers also revealed they selected specific networks for their deep link features, conversion tracking, friendly account managers and non-retail focus 47.1% 44.3% Yes No Don't know 8.6% We have seen a seismic shift away from the outmoded last-click attribution model and have been helping advertisers to very successfully use data to apply individual conversion attribution to better understand how various marketing channels, such as display, SEA and affiliate networks influenced users throughout the purchase funnel to help drive sales. The high percentage of publishers that don t know whether their sales are incremental demonstrates a lack of transparency in affiliate data. Whilst advertisers will usually be aware of the impact of each element of their marketing, this data is rarely shared externally making it almost impossible for affiliates truly know the incremental value that they bring to advertisers. Ellie Edwards-Scott, Managing Director at Quisma. Julian Bazley, UK Country Manager at nonstopconsulting. Page 12 of 17

14 68.3% 31.7% Yes No In my experience, tenancies have performed extremely well for some of our clients, however, some have not. We are heavily focused on results and ROI. If a tenancy placement does not perform for a client, we struggle to see where the value of the promotion lies; after all, we are not targeted on brand awareness. Jo Thomas, Assistant Head of Performance Marketing at LBi. 16.7% 18.2% 13.6% 30.3% Up to ,000 1,000-5,000 5,000-10,000 10,000-25,000 25,000-50,000 50, , , , , % 26.1% Yes No Don't know 59.7% Page 13 of 17

15 35.00% 30.00% 25.00% % 15.00% 10.00% 5.00% 0.00% In addition to the survey s stock answers, publishers were able to provide their own answers. They included ad blockers, Google s continued grab away from organic results, increasing competition, high street stores closing, economy, advertisers themselves becoming content publishers and the inability to work with retailers via affiliate networks - poor conversions due to cashback/voucher codes. Google is making it increasingly more challenging to remain prominent, although this helps to keep the landscape up to date with the right techniques and strategies. Whilst some may state this is required to retain the right level of quality within the search landscape, there have been some big players affected especially within the finance sector for example. What worries me most is the response rate to being culled. In most instances, the affiliates providing quality traffic will not be culled and this is where the network and/or agency should always be in touch prior to any action. Richard Lane, Affiliate Business Director at Mindshare. Page 14 of 17

16 Austria Denmark Greece Italy Norway Poland Sweden UK Content monetisation plugins Generic text links Product feeds/data feeds Videos Voucher code feeds WordPress plugins It is no great surprise to see that generic text links are still the most common choice for publishers. Technology providers typically provide a simple mechanism to use text enabling publishers to easily link from; text, banners, videos etc. Text links provide a simple way to create effective pages that are designed to convert. Julian Bazley, UK Country Manager at nonstopconsulting. WordPress plugins Voucher code feeds Videos Product feeds/data feeds Generic text links I can spread my risks and start new sites. I have a lot of ideas. Because we are mobile-focused and mobile is the next big thing in performance marketing. Almost no (top) knowledge about affiliate marketing in the. Good trends and expanding activities internationally We still have so much to do. Very big opportunities! Proposed pipeline of work with few big brands. Currently fighting too many battles on too many fronts. It's not clear to me who is "on the Affiliates' side. Why it s getting worse: trouble tracking, advertisers don t t pay or who fail, agencies and networks that are not doing their job of controllers etc. Page 15 of 17

17 Austria Denmark Greece Italy Norway Poland Sweden UK Publishers expect earned commissions to rise by 6.3% on average throughout 2013 compared to the previous year. The overall picture is similar to recent years, however it must be noted that more affiliates are expecting a 10-30% increase and less are expecting larger increases of perhaps 60-90%. This perhaps reflects the more competitive landscape and decreasing level of quick wins, perhaps bought about by not only competition within the industry but also the increased perceived threat of Google updates affecting prominence and therefore commissions. Richard Lane, Affiliate Business Director at Mindshare , , ,000 50, ,000 25,000-50,000 10,000-25,000 5,000-10,000 1,000-5, , Less than 50 Page 16 of 17

18 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Very positive Positive Neutral Negative Very negative Another pleasant surprise when you take into account the wider state of the economy in Europe. Whilst there has been an increase in the number of businesses with a negative outlook for the future this is only to be expected during a time of financial crisis - it's survival of the fittest out there and some businesses will go to the wall. What is promising though is the level of business that still remain Neutral, Positive or Very Positive. This is excellent news and these businesses are making up more than 90% of the overall survey respondents'... I think that you would be hard pushed to find another industry in Europe at present that remains quite so optimistic for their future opportunities. Gavin Male, managing director at R.O.EYE. 20% UK 26% 10% 10% 14% Austria Denmark Greece Italy Norway Poland UK 50% Italy UK Page 17 of 17