My apologies, again. I haven’t had time to compose an original entry that is thought provoking or even mildly entertaining. My time has been occupied with a little identity theft problem. I’ll write something about that soon.

Meanwhile, it’s Chris Henger to the rescue. He’s the senior vice president of sales and marketing at Performics and he took time out of his crazy schedule to respond to some questions about where online marketing is headed.

I couldn’t fit all of his responses in my story that is due out in the printed issue of Revenue coming in January, but I wanted to share his insights with you. So, here’s what Henger had to say about the state of online marketing:

Revenue: What’s been the biggest change in affiliate marketing over the last two years?
Chris Henger: It’s hard to say this when the entire interactive industry is just 10 years old, but affiliate marketing has become mature. People in the online world know what affiliate marketing is, whether they have an e-commerce driven site or any type of destination site that benefits from eyeballs. How can I enlist the help of other Web sites to drive traffic and customers to mine? I’ll use an affiliate program to do this, and only pay for results. It’s a very compelling proposition. With maturity, has come increased focus on quality. Advertisers expect quality customers, quality networks, and most importantly quality service. And quality service is more than just being responsive to inbound questions. It’s about being proactive with strategic recommendations, additional measurements and analyses and a deep understanding of how the affiliate channel works for a particular business or category. The real value now is how the advertiser optimally leverages the affiliate channel within their entire online marketing media mix. Publishers benefit from the maturation of the affiliate marketing industry because it’s reached a very professional and sophisticated level with many programs available; there is truly something for everyone. And since mainstream advertisers have embraced the affiliate marketing channel publishers can count on payments and a steady stream of great products and promotions to share with visitors.

Revenue: What’s been the greatest development in online marketing during the last 24 months?
CH: While it’s been around longer than 24 months, I have to go with search. The impact of search on all aspects of online marketing is unparalleled. Performics first launched a search marketing campaign for a major retailer back in 2000 but in the last 24 months we have seen a tremendous upswing in spend, eCommerce volume and overall traffic. We sponsored research using the ComScore panel and confirmed that search plays a role in at least half of all online purchases. And Yahoo showed in a similar study that search plays a role in 80 percent of offline purchases in the consumer electronics category. Search plays an important role throughout the purchase funnel. We are seeing more and more opportunities to discuss the branding impact of search with advertisers. Think about a consumer’s response to a major brand when they conduct a search on Google, and the brand doesn’t appear. I’m convinced that has a negative reflection on the brand equity a marketer has spent years (and millions of dollars) building. We also believe affiliate marketing plays a role in the awareness and research phases of the purchase funnel too but it doesn’t always get the credit it deserves. Search has changed every aspect of online marketing. And with the data, control and volume available through search the development has helped the industry overall.

Revenue: How would you describe the state of online marketing right now?
CH: A few words come to mind: exciting, noisy and competitive. The future is brighter than ever. We are excited about the commitment to online marketing and specifically performance-based online marketing vehicles like affiliate and search. There are major budgets being committed, and that spend will fuel growth over the next 5 years. Noisy is a term that comes to mind because this is an extremely dynamic environment. There is noise in the marketplace everyday, with announcements of new products, acquisitions, dozens of relevant newsletters and hundreds of blogs to read that delve into the juicy issues in online marketing. We have to think, learn and stay ahead of the curve everyday to protect the interests of our advertisers and publishers. There is noise around products, new companies, new competitors, channel conflict, ad blocking, effective promotions, taxation, and trademarks, basically something for me to lose sleep over every day. And its our job as industry leaders to absorb the noise, educate our clients and allow them to develop marketing strategies around their business and products and not be consumed by this incredibly dynamic ever-changing industry. Do what they do best – be marketers. And finally, competitive. Advertisers are competing for placements on publisher sites, prices are climbing, vendors make wild promises and everyone (advertisers and publishers) is competing for traffic.

Revenue: What are the largest hurdles for online marketing going forward?
CH: Online marketing is no longer an after-thought, a new idea that needs incubation or the marketing flavor-of-the-day. It’s a viable (and becoming critical) channel for all types of advertisers. The challenge is for an industry in hyper growth, to meet customer expectations while infrastructure, process and standards mature and develop. There is a lot of growth to come online but we are way past the “lets set up an eCommerce site phase” Now, everybody is online and the smart marketers win, just like they do offline. It’s back to the basic 4 P’s of marketing again. You have to have a good product to sell (but you also have to make sure its in stock and understand real-time inventory), you need a competitive price, online marketing is promotions on steroids so you need to be smart with your customer incentives (free shipping isn’t the only answer) and finally placement, being found where people either expect you to be or discover you because the interactive industry is a sit-forward, active medium, rather than a passive (broadcast to me) medium. So the hurdle for online marketers is to be as sophisticated in their only marketing tactics as consumers are in their consumption. We believe there is tremendous upside in the online marketing tactics around the 4 P’s, and one of the reasons were are committed to focusing on the execution and offering strategic counsel. We want to worry about the industry (the noise) and help our marketers focus on marketing.

Revenue: Where do you expect online marketing to be two years from now?
CH: The industry will continue to mature and develop, and the smart advertisers and publishers will get more sophisticated and separate themselves from the less professional. It’s not going to get easier, but it will keep getting better. In affiliate marketing I expect we’ll see a continued focus on quality, reach and the overall integration with a marketer’s online media mix. And fueled by the continued growth of search I think we’ll see online marketing take a larger share of the overall media mix

Let me know what you think. lisap@revenuetoday.com