Advertisers Seek Out Lead Generation And Affiliate Marketing Over Traditional Adverts

Is the humble advert dead? Advertisers in the UK are shifting away from traditional forms of advertising in favour of more subtle ways of attracting consumers' business.

More than £800 million was spent last year on online marketing strategies and lead generation activities, known as Online Performance Marketing (OPM); and it's easy to see why - for every pound spent, the advertiser gets £11 spent with them.

That's because advertisers only pay once someone completes a defined action, such as making a purchase (known as affiliate marketing) or submitting their contact details (known as lead generation) because of the advertisement.

Tim Elkington, director of research and strategy at the Internet Advertising Bureau, which produced the figures with PricewaterhouseCoopers, told the Huffington Post UK that while overall ad spend may be down, digital spending was on the up - having increased by 12.6% in first half of 2012.

"OPM has performed particularly well as companies only pay for results, which means advertisers don't have to broadcast their message in the hope that people will respond, but can make sure their activity works," he said.

"The old adage that 'half of my advertising is wasted, I just don't know which half' is irrelevant to OPM, hence its increasing attractiveness when overall budgets are being squeezed and accountability rises.

"Despite around 3,500 advertisers and 10,000 publishers engaging in Online Performance Marketing it still has the air of a best-kept secret. This is particularly surprising, considering each year it drives more than two online purchases for every UK adult and causes the equivalent of every UK person to fill out a form showing interest in a product."

Financial services are the biggest spenders in the OPM category, driven mainly by insurance and credit card advertisers using comparison websites. Retail comes in at second place, with clothing, accessories, electricals and computing all key areas for this sort of advertising.

Anna Bartz, senior manager at PwC, said: "Economically challenging times have seen marketing budgets squeezed and greater evidence required of return on investment. As a result, we expect that the attractiveness of paying for advertising based on an extremely measurable and specific consumer action will see more advertisers using OPM as a key channel for driving sales."

The news follows figures revealed by Nielsen on 16 January, which showed British advertisers spending dropped by 4.2% for the first three quarters of 2012.