No matter where you are in the world of online advertising, you want to succeed and to be rewarded for your success. That’s where performance marketing comes in. People in this industry measure results, then pay or get paid for those results.
This article is part of our Background & Setup series.
So Who’s Involved?
First, someone needs to be willing to pay for advertising. They could be retailers or service providers. They could be big or small. These advertisers spend on ad space to reach an audience. Advertisers want to build brand awareness, engage with customers, and lead users to interact with their business.
On the other hand, publishers want to monetize their audience by supplying ad space. Some common examples of publishers are content producers (like bloggers or game developers) and media buyers. They sell ad space to promote advertiser products and services.
That leads us to ad networks, who support and manage business relationships on both sides of ad space supply and demand. Networks aggregate audiences across multiple publishers, which can then be monetized to advertisers. Publishers and advertisers work with networks so they can focus on their own business plans.
Tip: In TUNE products, “partner” refers to all types of publishers and networks working with advertisers.
Let’s Connect the Dots
Each player in performance marketing has their own needs, motivations, and business connections. We can show this off with a similar story outside of online advertising:
Barstocks Bakery wants to advertise their latest product with a flyer campaign. To help with the promotion, the company hires flyer distributors and offers them payment in the form of a commission on each sale they generate.
Over time, Barstocks hands the management of this task to a staffing agency. As an incentive to work with the best distributors, the staffing agency is offered payment in the form of a commission.
In the end, the staffing agency gets paid per sale by Barstocks, and distributors get paid per sale by the staffing agency.
Think about this story and ask yourself where you fit in. Are you an advertiser like Barstocks Bakery, a network like the staffing agency, or a publisher like a flyer distributor?
From Dots to Dollars
In the above story, every sale drives payment from advertiser to network to publisher. But how does a publisher know if sales are correctly being attributed to them? And how does an advertiser know if they should pay commission on a sale?
Without a way to follow each flyer on its individual journey, they don’t. Each advertiser needs to trust that their payouts are being rightly earned and each publisher needs to trust that their earned commissions are rightly attributed to them.
With Attribution Analytics, you can keep track of who takes that flyer, and how it leads to a sale. Networks and advertisers use that data not only to assign the ownership of user traffic, but also to make informed business decisions with respect to their campaigns.
Talking the Talk
We covered advertisers, publishers, and networks above. Now let’s use concepts you’ve just become familiar with to introduce some industry terms:
- Campaign: An organized course of action to achieve advertising results like sales, views, or downloads. A campaign includes information like what results are worth payment and what product or service is being promoted.
- Attribution: The process of connecting user traffic or actions back to the source who provided it. It usually has the goal of identifying which networks or publishers yielded results for a campaign.
- Cost Model: A description of how advertising results are paid for. Advertisers set rates when providing campaigns to networks, and networks do the same for publishers.
These high level concepts might feel vague at first, but they’ll come together with a little bit of time. For now, let’s continue by introducing some terms that describe how a user moves through advertising:
- Impression: A measure of an campaign’s visibility and contribution to brand awareness. Impressions don’t capture direct user interaction. Instead, they’re measured when a user sees or loads your ad somewhere.
- Click: A measure of user engagement in online advertising. When a user literally clicks (or taps or touches) an ad to interact with it, that’s a click.
- Conversion: An action taken by the user that the advertiser values. Some examples are product sales, mobile app installations, and lead generation form submissions.
There’s more to learn, but if you understand how these concepts interconnect, then you’re already ahead of the curve. Next, let’s use an example to put the language in context.
Tying It All Together
Let’s say a company called Grandia eSports needs to promote their mobile app for an annual competition, and has budget to spend on an ad campaign. They put together a campaign that networks they work with can promote to publishers.
The campaign includes a description, promotional banner images, and who the ads should target. Not only that, it defines conversions as mobile app installs, and pays $5 per conversion. One of Grandia’s network contacts takes interest in the campaign and decides that they’re willing to pay publishers $4 per conversion.
The network then looks for its publisher contacts who can best promote the campaign. Blog writers and other publisher contacts interested in the campaign choose whether or not to start promoting it on their sites. Once ads are posted, traffic begins to flow: users see the ads, some users click on those ads, and some of those users install the app.
Meanwhile, the advertiser keeps track of campaign performance with Attribution Analytics. As long as Grandia runs the campaign, they pay the network based on the agreed upon cost model when blog writers bring in sales. Similarly, the network pays the writers who are driving conversions.
You’ll get more out of our software as you build a strong foundation of marketing attribution concepts. Knowing who’s involved, how they interact, and what terms they use is a great start.