Programmatic media is the "most challenging" performance media channel for brands to justify, Deliveroo has warned, while agencies need to add real value to guard against in-housing.
Deliveroo’s global director of performance marketing, Adam Wilson, told Campaign's inaugural Performance Marketing 360 conference in Brighton today that the online food-delivery brand’s performance marketing spend was "about flat" compared with this time last year.
The difficulty in measuring programmatic continues to plague marketers and is made worse, Wilson said, because of the "walled gardens" that Google and Facebook set up around impression data.
He added that this was a problem because performance marketers "want to value every touchpoint".
"We’d like to take that data and make our own decisions," Wilson said. "It’s an ongoing problem; the fact that data is locked in Google and Facebook makes it really hard. That’s both true for desktop and mobile… app and web are attributed in very different ways."
This was made even more challenging when brands invest in analysing their first-party through a data management platform, he added. Many brands have invested significant sums in DMPs and staff to run that software, particularly after last year’s introduction of GDPR by the European Union, but have complained that there is not enough talent in the industry to manage it.
"A lot of people buy off-the-shelf software and expect it to work… but a lot of tools don’t do what they promise to deliver," Wilson pointed out.
Speaking on a panel chaired by Zoe Harris, GoCompare’s chief marketing officer, Wilson also warned that Google’s recently announced move to block third-party cookies on the Chrome browser would make it even tougher for brands such as Deliveroo to integrate and measure programmatic media.
"It’s a complicated space with so many partners and there is a lack of transparency," he added.
Despite these challenges, none of the panel said they were spending less on performance marketing compared with a year ago.
Social media: worth it?
Meanwhile, Soak.com’s chief marketing officer, Helen Gemmell, said social media was the most difficult performance marketing channel to justify, because the revenue that directly comes through the channel is small.
However, Soak.com has found that social media is highly useful for engaging customers on an emotional level.
"Our tactic for Soak.com is to bring joy to the everyday routine. We make people think about the bathroom as the first room you go into in the morning and the last room at night. With social, we encourage customers to send us images of their newly renovated bathroom where they’ve used Soak.com.
"Social media is hard to justify, but when you see the interaction and reach out to people, that’s key for us moving forward. Rather than go into magazines, everyone picks up their phones every single day."
Wilson praised social media when it comes to creativity, with Deliveroo conscious of treating it as a channel in its own right, rather than as a place to recycle creative from traditional channels.
"A lot of our audience are students who are very socially aware," Wilson said. "You can’t show brand creative to students. If you show a TV ad on Facebook or Snapchat, you’re not really messaging in the right tone of voice. It’s very different to what we’re used to; no longer do we have this beautifully produced thing for TV; it’s more scrappy."
This means, in Wilson’s view, brands did not need "an experienced agency" to produce ads for social media. "You can have a junior person who’s good at video editing, who’s good at a few things," he added.
Agency 'muscle' vs value add
In response to a question from Campaign’s head of media, Gideon Spanier, about whether brands still need "agency muscle", Wilson said marketers are grappling with a "trade-off" between trying to harness first-party data more effectively and efficiently versus using an agency’s ability to organise strength in numbers.
He said brands needed to "find the right partners to work with your business; they’re there to learn as much as teach you. Sometimes, that model gets distorted and becomes purely about campaign execution functions. They have to add intrinsic value to your business, otherwise it’s not a fair value exchange."
This echoed earlier comments by Harris that "it feels like we’re at a tipping point when performance marketing comes of age".
Barney Harrison, commercial and marketing director at The Gym Group, agreed that the low-cost gym provider has "reached the ceiling of what performance can do for us" and that brand-building was starting to play a bigger role in the business.
He acknowledged there is power in numbers and that there is "an awful lot of power behind an agency brand". The Gym Group does not in-house performance marketing "yet", Harrison added, but revealed that the brand is considering making the move.