October 2017

The Awin Report, released earlier this month, estimated the global value of the affiliate industry to be £12bn.

Affiliate marketing is the fastest-growing segment in digital advertising – the IAB & PwC’s Online Performance Marketing study revealed UK online performance marketing spend hit nearly £1.6bn in 2016. But advertisers, rightly, have many questions around affiliate marketing: what is it, is it incremental, and why can’t it be automated? These are all valid questions and need looking at on an individual client level.

The most important link in the chain is the consumer. Affiliate websites are loved by consumers, whether they’re geared at giving tips on how to manage our lives and finances (e.g. MoneySavingExpert), getting us free Swizzels tubs at Iceland or cashback on a Sandals holiday, affiliate marketing caters to most, if not all, client verticals.

Affiliate marketing is an adaptable and flexible solution for brands struggling to make sense of how and where to invest increasing digital budgets. As it has evolved into a multi-billion-pound sector, clients are increasingly viewing it as a platform to grow domestically and internationally.

While the affiliate marketing space is growing, so is the competition – a study released in 2016 indicated that over 80% of advertisers run affiliate programmes. The majority of those advertisers devoted more than 10% of their marketing budget to the affiliate channel. As it gains a higher profile, powerful business intelligence technology and tools are also becoming available, to enhance affiliate marketing and help clients understand ROI, and how to maximise it.

However, as with any self-regulated digital channel, there have been associated risks. Back in September, SkyBet suspended its affiliate programme, citing “changing regulatory requirements”. This followed a CMA investigation, alongside the UK Gambling Commission, into potential breaches of consumer law, after the Guardian had revealed that so-called tipsters, earning a percentage of customer losses, were deliberately recommending long-shot bets.

Domestic regulators are taking these accusations seriously, with the Gambling Commission revealing strict penalties for breaches. More widely, the ASA, earlier this year, published its guidelines around affiliate marketing, and the CMA followed by laying its own ground rules, stating that comparison sites should be Clear, Accurate, Responsible and Easy to use (CARE). The IAB has also stepped in, reviewing its Voucher Code of Conduct.

Affiliate marketing remains a proven online marketing method for generating sales, leads and brand awareness. The beauty of the channel is that you only pay out when users complete certain agreed actions on your website. In an industry where spend and budget are increasingly scrutinised, this is a channel that offers highly-measurable returns, cost-effective sales and genuine ROI. As domestic regulation comes up to speed, it will only continue to grow.

With a shift in focus from the Zoellas and PixiWoos of the world to the more relatable and affordable micro-influencers (defined as social influencers with less than 100,000 followers), managing an influencer campaign has never been more complex or time-consuming.

This explosion of influencer options makes finding the right influencer to promote your brand an increasingly cumbersome task. Brands now find themselves spoilt for choice in choosing the right talent that aligns with their vision, mission and identity in order to execute a successful influencer campaign. But where there’s a problem, there’s usually an adtech solution.

Over the past year, tech partners have flooded the influencer marketing space to automate the gruelling process of influencer recruitment and management. Brands and agencies can now log-on to a website, apply a few filters and ‘order in’ an influencer as quickly as it takes to order a takeaway. This has greatly raised the stakes for adtech vendors who are eager to show their value in this space.

Adtech can, after all, reduce manual labour, simplify processes and improve analytics – but programmatic influencer platforms come with a risk. As the hype around micro-influencer marketing has grown, so too have the number of services offering to artificially inflate wannabe influencers’ social media followings. These tools, which allow customers to buy likes and comments, have led to a new breed of social media user: the fake influencer.

The closer brands move towards automated influencer solutions, the more vulnerable they become to those seeking to exploit the market. In what quickly became the blueprint for how not to run an influencer marketing campaign, US marketing agency Mediakix demonstrated the ease with which brands are signing up faux influencer talent when they secured sponsorship deals for two Instagram accounts created for fake influencers ‘Amanda Smith’ and ‘Alexa Rae’. When it’s just follower numbers and audience reach figures you’re looking at, it’s an easy trap to fall into.

In many ways, the ‘adtechification’ of influencer marketing can be likened to the early days of the digital display ad network: programmatic influencer databases aggregate the longtail of influencer inventory and sell it to the highest bidder. But this was before brand safety concerns and ad-verification software forced digital display publishers to raise the bar.

Adtech can help solve a lot of problems for social influencer marketing. But in the end, effective influencer campaigns are most beneficial in the long-term relationship the brand establishes with the talent and the content they produce – treating it as a fast-paced numbers game is counter to this cardinal principle. If we automate this process and lose the authentic human touch the channel prides itself on, we could see it lose its magic.

There are a number of ‘big names’ in the marketing industry, but they don’t get much bigger than Mark Ritson and Byron Sharp.

Marketing Week columnist Ritson is a marketing professor who is rarely shy of proffering a ‘colourfully articulated’ opinion on his field. Whether it’s championing zero-based budgeting or pillorying the Adidas marketing director for crimes against media neutrality, he doesn’t hold back. Sharp, also a professor of marketing and author of the seminal ‘How Brands Grow’ books, is similarly outspoken, with empirical evidence backing him up to boot. He’s the leading figure at South Australia University’s Ehrenberg-Bass Institute – the global centre of excellence for taking an evidence-based approach to marketing effectiveness.

The similarities don’t stop at their professions and plain-spoken candour either: they’re both expats in Australia, for example. But where they do differ is in their opinions on segmentation and audience targeting. Put simply: Sharp is largely against a surgical approach to reaching a brand’s audience, with his number one rule being that brands should “continuously reach all buyers of the category”; Ritson favours a more nuanced approach.

Over the years sparring between Ritson and Sharp has become something of a spectator sport. Fast forward to London’s Festival of Marketing, held earlier this month, and the audience was blessed with ‘Ritson v Sharp’ in the ring, with an eager crowd baying for marketing blood. Ritson went first. Left hook: “Sharp has a childlike focus on science”. Right hook: “We don’t study rocks, we study people.” Alongside noting that truly mass marketing is out of reach for most businesses, his most pointed argument was that Sharp “believes in salience and distinctiveness, because that’s all you really can stand for if you go after everyone”.

Up then stepped Sharp. Clearly a little tired of being typecast but revved up by the left and right hook, his opening salvo was an uppercut: “You tell everyone what Byron Sharp says. I have the advantage in that I am Byron Sharp.” Kapow! Responding to Ritson’s “childlike” jibe, he said: “Scientists are people who have a sense of wonder, who go out into the real world and are humble enough to say we don’t know everything about the world.”

As Sam Peña-Taylor observes in his full blow-by-blow account on WARC, it was – just about – a win for Ritson, with the crowd nodding in agreement. Whilst Sharp has empirical evidence, his focus often feels a little narrow. Ritson is more open to a range of ideas, which rather contradicts Sharp’s point about his sense of wonder. The reality is that this was always going to be a battle more civil than royale. In Ritson’s own words: “The real gift of Sharp and his Ehrenberg-Bass Institute was to catch the helium balloon of bullshit that marketing was becoming… the contributions are not necessarily new or sexy, but my goodness they have been essential.” Quite.

At the7stars we’re effectiveness obsessed. And our own evidence tells us that rigorous strategy and proper comms planning ensure that both mass marketing and a more targeted approach deliver results for our clients. Like Ritson said, it’s not gin or tonic, it’s gin and tonic.

Nothing signifies the drawing to the end of another year in TV media more than upfronts season. This month Channel 4 and ITV hosted the industry to look back over the successes of the past year and reveal what’s to come in 2018. From ITV’s glitzy Gala hosted by Emma Willis to Channel 4 treating guests to a #nightwith4, audiences were treated to comic interviews, celebrity performances (including appearances from Jennifer Hudson and Craig David), and some insight into the minds of TV’s biggest players.

ITV kickstarted the festivities with their annual Gala, hosted at the London Palladium. Looking back at 2017, the star of the show was the phenomenal success of Love Island. The segment, presented by Love Island narrator Iain Stirling, covered how the show’s highs and lows captivated younger audiences, making ITV2 the top performing channel for 16-34 year-olds and ‘100% their type on paper’.

Programming was a hot topic for ITV, from returning favourites Dancing on Ice to their 2018 focus on drama. Q1 will see the release of Next of Kin, starring Jack Davenport and Emmy Award winner Archie Panjabi, and Trauma, while later in the year an epic new adaptation of Vanity Fair will be hitting TV screens.

The following week saw medialand descend upon Shoreditch for a night with Channel 4. The night was kicked off by Jonathan Allen, as he introduced and interviewed Alex Mahon, the new Chief Executive of Channel 4 – and his new boss! The bulk of the presentation focused on programming for the coming year; new original comedy (Lee and Dean), questionable reality TV (5* Hotel), returning formats (Ackley Bridge) and new dramas (Kiri).

The biggest announcement came from both ITV and Channel 4, however, as they announced their plans to partner with Sorenson Media to look at bespoke targeting solutions across smart TVs – their answer to Sky’s AdSmart proposition. While it has been rumoured that both saleshouses are in ongoing conversations with Sky AdSmart, this would be an independent step forward and create competition within the market where previously there has been none.

While the development of data-driven TV targeting for both Channel 4 and ITV is in the early stages and will only progress over the next year, what is certain is that both channels have put significant investment behind programming to ensure another successful year.

Also joining upfronts season this year was YouTube. Its Brandcast event kicked off with the Samba dancers and a showcase of some of the best content and advertising of the year. The party atmosphere was soon tempered as Ronan Harris took to the stage; the event hosted just one week after The Times had gone live with another exposé into advertising on the platform, meaning the brand safety issue was one that couldn’t be ignored. He was quick to point to improvements in the automated detection of inappropriate content; on-going consultation with the four industry bodies; and work being done to switch off offensive comments on videos, but the room was left with the feeling that this was very much a work in progress.

Highlights included a focus on investment in longer-form premium content and series-length shows, but, despite impressive speeches from Content Creators and a guest turn from Kurupt FM and Craig David (again), they couldn’t quite re-re-wind the clock to wipe the brand safety concerns aside.