As online marketing continues to evolve at a rapid pace, so do the agencies that that work with merchants and manage their affiliate programs. Outsourced Program Management is now becoming a function of what many online marketing agencies do rather than their entire business.
About six years ago the OPM business exploded from just a handful of OPM agencies to hundreds as the affiliate space grew and experienced program managers were needed to help new clients navigate the complex waters.
The need for OPMS is still there as more retailers continue to add affiliate programs. However, as more merchants begin to understand the importance of looking at their online marketing (search – natural and paid -, display, social media, and performance marketing) in a more holistic manner, OPMs are evolving to take on many of those functions or at least be involved in advising the merchant’s team.
To help convey those expanded offerings to clients and bring in new business many OPMs are tossing out that old moniker and rebranding as full-service online marketing agencies or calling themselves digital agencies.
That puts them in competition with old-school advertising and marketing firms that are feeling the crunch as clients better understand performance, where they are paying only for people who take action, not for phantom eyeballs or reach. The Mad Men era of paying an agency for the ideas and production of the creative are waning. Traditional agencies often have to outsource many aspects of a client’s business to experts or specialists in new digital marketing disciplines. This cuts margins for the agencies and often makes managing campaigns more complex and resources intensive to manage.
But agencies that manage affiliate programs have a deeper understanding of performance than the old style ad agencies. That seems to make good sense as savvy, budget-conscious merchants are also hip to the fact that working with agencies that understand performance-based marketing means they know where their dollars are being spent and seeing a bigger return for their investment.
For OPMs this often means slowly adding new services. Most agencies that started as OPMs have found it a natural fit to offer social media services to their clients as they were already using social to do some marketing for the affiliate programs.
John Shelton, President and CEO of STRATA, which recently conducted a survey of where ad dollars are being spent , says “… digital has become an integral component for many advertising campaigns… moving forward, we expect to see ad dollars split even more evenly between traditional media and… newer avenues… such as mobile and social media…”
According to the STRATA report, Facebook, YouTube, Twitter, LinkedIn, and Pinterest all reported record highs for agency campaigns, and a large majority (74%) use free social media to support client campaigns and 25% say they see a better ROI on paid social compared to free. 11% experience a better ROI on free social.
And when it comes to digital agencies a deep understanding of search is also key for clients. Agencies that sprung from the affiliate space understand how closely search is tied to performance and often have that expertise in house already.
In addition, much of the success of affiliate marketing is rooted in the ability to move quickly and test new technology and disciplines. Thus, adding new services like mobile are much easier for these evolving OPM agencies. Many, like our agency are adding it not just to attract new clients but because our existing clients are asking for it.
As this metamorphosis of OPM continues to take place, we’ll see more OPM’s transition to full-service agencies. We will also likely experience consolidation in the market as the bigger OPMs get bigger and the smaller ones are bought up or see their dollars dry up if they continue to only focus on affiliate marketing.
About our guest author:
Durk Price is the CEO and Founder of eAccountable a digital performance agency specializing in retail representation and provides performance management services for numerous Internet Retailer Top 500 merchants. eAccountable was founded in 2000 and specializes in driving traffic and controlling costs per conversion, providing the latest online tools for advertisers to manage online marketing: affiliate, social, mobile, email, research, retargeting, pay-per-call and more.