• by Peter Klein , November 21, 2012

There's no doubt that performance marketing is a significant force in online marketing, and will continue to grow. What will 2013 have in store for the performance marketing industry?  As I see it, there are four key trends that will influence performance marketers’ work in the new year:

1. More brands will invest in performance marketing. The 2012 IAB Internet Advertising Revenue Report indicates that more than two-thirds of all marketing transactions will be paid for on a performance basis. Total U.S. spend on performance marketing will grow by almost $5 billion, to $25 billion in online advertising revenue, versus 2011 spend. This indicates that performance marketing will continue to dominate the online ad-spend model. Brands that consistently miss their online marketing ROI targets will comprise the majority of new spend on performance marketing campaigns, as they seek to take advantage of the industry’s guaranteed results. Traditional agencies will continue to focus on branding for their clients in the digital space, and farm out performance marketing budgets to trusted affiliate networks and marketers.

2.  Lead quality and compliance take center stage. As brands continue to invest their marketing dollars in performance marketing, they will place increasing pressure on performance marketers to achieve their investment goals. The SaaS and lead quality product market will blossom. These two dynamic sectors of online markets will help advertisers pay for only top-quality leads, enabling performance marketers to get paid appropriately for such quality. The government will continue to get involved in online marketing regulations, such as Do Not Track legislation, and more states will attempt to pass nexus tax laws. Efforts will likely be minimally intrusive, and the industry will push for self-regulation efforts as a means to limit involvement.

3. Mobile lead-gen has its moment in the sun. Mobile marketing will become a much larger piece of the advertising budget in 2013. eMarketer forecasts 138 million smartphone users in the U.S. next year, comprising 43% of the total population. It will be critical for advertisers to optimize websites and create shorter lead-generation forms with click-to-call for mobile devices. In our “always on” world, consumers need instant gratification from the brands they allow into their online world. Advertisers that provide consumers with access to immediate customer service will win their business.

4. Consolidation of media channels. A larger premium will be placed on internal media sources to provide quality and consistency. As such, the lead-generation industry will see a continued and more aggressive consolidation of affiliate networks. Many affiliates will merge with or acquire one or more of their affiliate media sources. Specifically, many mailers and media buyers will join forces with networks to increase margin, reduce compliance risk and deliver on allocated budget to survive and create a competitive advantage.