Warc Blog

New online strategies boost UK brands

23 January 2013
LONDON: Advertisers in the UK spent over £800m on "online performance marketing" strategies like lead generation and affiliate marketing last year, and logged £9bn in sales as a result, new figures show.

The IAB, the trade body, reported that brand owners invested £814m in this activity in 2012. Its definition of "online performance marketing" covered ads that firms only pay for when they led to defined actions like securing shopper contact details or a purchase.

Its study, produced with PricewaterhouseCoopers the advisory network, also suggested this channel ultimately delivered £9bn in revenues during 2012, equating to a payback of £11 for every £1 spent.

More specifically, shoppers completed 100m direct transactions, worth around £8bn, and made 70m enquiries which yielded £1bn in sales attributable to this form of lead generation.

Overall, the analysis stated that between 5% and 6% of all ecommerce returns are supplied by this channel at present.

Financial services providers contributed 45% of expenditure last year, followed by clothing and accessories on 20%, telecoms and media on 10%, travel and leisure on 9% and gaming on 6%.

However, financial brands allocate between 2% and 10% of their internet marketing budgets to this area, a total that increases to between 20% and 30% for telecoms and media companies.

The most common outlets for this kind of marketing, the analysis argued, incorporated price comparison websites, examples of which include uSwitch and Compare The Market.

Coupon sites like Vouchercodes.co.uk, and loyalty and reward schemes such as Nectar were equally popular. "Cashback" platforms like Quidco, which gives shoppers money back for making purchases, also attracted attention.

Tim Elkington, director of research and strategy at the IAB, said: "Despite around 3,500 advertisers and 10,000 publishers engaging in online performance marketing, it still has the air of a 'best-kept secret.'"

Looking ahead, providers of services and technology in this field predicted revenues would rise by 25% in 2012, while advertisers expect to boost their outlay by between 5% and 10%.

Data sourced from IAB; additional content by Warc staff

 
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