Tactics > reinventing customer recruitment The state of play
Where we are now and where we’re heading next
to explore a whole range of acquisition opportunities. Affiliate marketing is an inexact science; there is no blueprint. It can be entirely moulded according to individual client’s needs, resulting in like-minded competitors with similar propositions often having very different affiliate campaigns. It also demands time and resource; fail to input one or both and you increase your chances of failing, a creeping sense that you’ve never really got to grips with its potential.
A Always evolving
Affiliate is not like search or display or email, but it does incorporate elements of each. If you want it to that is. Add to that mobile, vouchers, cash-back, loyalty, social, price comparators, bloggers and behavioural advertising and you have a potentially bewildering array of opportunities. And that’s why the channel should never be viewed as a single revenue stream. Its common currency is CPA (cost-per- acquisition) and performance, but beyond that there is little to link all affiliates; seeing them as a homogenous mass will never fully exploit the channel.
This year has demonstrated how that is becoming an increasingly important distinction. If we roll back a few years, affiliate marketing was relatively simple. It tended to be dominated by paid-search arbiters and price-comparison sites. Enter incentivised traffic—voucher codes and cash-back or reward sites—and the channel grew in complexity. This was at a time when advertisers were increasingly working their marketing spend back to an effective CPA,
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ffiliate marketing is at the forefront of the digital retail revolution. Essentially all online in microcosm, it remains a diverse and compelling opportunity for multichannel retailers
meaning the industry, for the first time, found itself centre stage.
With the advent of social media and behavioural retargeting delivered on a cost-per- acquisition basis, it is no longer viable to talk of a singular affiliate channel. The challenge is therefore to ensure all avenues are explored whilst being understood within the wider digital context. This will be an increasing focus for advertisers as they will also want to ensure they are spending their money wisely. Few engaged advertisers would think about paying a singular commission for all their affiliate activity. Whilst a blended, target CPA is common for an overall campaign, it’s logical for advertisers to have a raft of bespoke and promotional rates for their top performers for use strategically at key sales periods.
Beyond this, advertisers will want guidance on what could be loosely termed “intelligent commission setting”. As any channel matures, so it is further pushed to demonstrate how incremental it is. The affiliate industry is no different and a number of advertisers are now attempting to garner a deeper understanding of the value of affiliate traffic. Again, it is impossible to lump all affiliate traffic together. A relatively simple exercise would be to take the top ten affiliates—who may all be on a standard commission rate for a programme— and apply different metrics that indicate value to show how they need to be treated as individuals. Compare each of their average order values or conversion rates, for example, and there is a good chance these could vary significantly. Beyond this, advertisers are studying new versus existing customers driven by these top ten, what type of products are being bought, how many repeat purchases are driven and what the spend looks like. It is only by building a more sophisticated appreciation of individual affiliates’ traffic that we can start to build true affinity relationships. Clearly, all this requires time and effort but assuming a well-run affiliate programme could potentially drive 15 percent of all online sales, it should be a project all advertisers invest in.
Upwardly mobile
This “deeper delve” into the channel has been a key theme of 2011 and will inevitably continue in 2012 and beyond. What other trends are likely to force themselves onto the affiliate agenda next year?
Mobile is the most obvious trend. Mobile marketing offers countless opportunities to
Direct Commerce Catalogue e-business
www.catalog-biz.com
in affiliate marketing By Kevin Edwards
advertisers and affiliates alike and we are already starting to see how this is likely to pan out. At Affiliate Window we’re currently seeing around 5 percent of our total network sales being driven by mobile devices—handsets and tablets. This figure has more than trebled since the start of the year with the most significant percentage increases from Android and Blackberry devices.
What is fascinating is this is happening regardless of whether advertisers have m-commerce sites in place or not. In other words, advertisers are recording significant mobile sales in spite of, not because of, their mobile efforts. For affiliate marketers, the challenge is to ensure affiliate tracking is included in any mobile plans. Overlook affiliate tracking from m-commerce platforms and those affiliates who are developing their own mobile sites will have no incentive to promote your offering. Take one of our largest affiliates, which runs a loyalty-card scheme that engages with millions of UK consumers. It offers members the chance to collect reward points from shopping across a wide range of online retailers. When it launched its mobile app, it specifically filtered out advertisers who didn’t have affiliate tracking on their m-commerce sites as it knew they wouldn’t be able to record and therefore apportion those points back to members.
Watch this space
Another interesting angle is how current mobile use mirrors the huge growth in incentivised traffic via the affiliate channel. Analysis carried out by Affiliate Window indicates as much as 90 percent of mobile sales are from affiliates with a particular focus on discounting, promotions or voucher coding. This taps into the general mobile trend of in-store voucher redemption, encouraging consumers in from the street to transact in-store. It’s a fascinating online-to- offline challenge that will see significant growth in 2012.
One of the largest department stores in the UK trialled a series of mobile and printable vouchers via the channel aimed at both in-store and online redemption. The findings were compelling with affiliates driving significant amount of traffic in-store, enough for the trial to be deemed a resounding success. Whilst this invariably requires significant logistical investment across a range of departments, the results vindicated the effort. Multichannel will be a key focus for 2012.
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