The Big Affiliate Marketing Handbook

45 Pages·2014·1.02 MB·English

iabuk.net
The Big Affiliate
Marketing Handbook
Contents
Introduction 2
1 Value 4
2 Optimisation 20
3 Policy 50
4 Futures and Opportunities 58
Glossary 78
by Clare O’Brien
Introduction Chair, Affiliate Marketing Council
& Senior Industry Programmes Manager, IAB
Welcome to the second IAB Affiliate Marketing
Handbook. In the 5 years since the first was published
in 2009, the Affiliate Industry – like the rest of the digital
marketing and advertising industry – has undergone a
transformation. More commonly referred to as Online
Performance Marketing, this is an advertising channel
that buys brand benefit as well as customer loyalty
and a directly measurable ROI in the form of sales.
Given that in 2013 the industry drove some 10% of the This handbook, the work of the IAB’s Affiliate Marketing
UK’s eCommerce traffic and commanded a marketing Council, exposes the industry’s diversity and even
spend of £1bn according to the PwC / IAB OPM study if you thought you knew affiliate marketing, you’ll
(see page 6), it’s a permanent (and growing) feature probably be surprised by some of the marketing
of integrated digital marketing programmes. In opportunities mapped out in these pages. If
fact it’s a channel that exemplifies just how digital you’re new to digital or haven’t used affiliate
is merging marketing and sales channels. marketing before, this handbook will help you
understand the industry’s value and mechanics.
Affiliate Marketing is not a ‘channel’. Rather it’s an
advertising objective. Affiliate campaigns deploy Overall, this handbook represents one of the fastest
most digital advertising and marketing disciplines growing digital marketing channels which many of
including email, display, content, search, social the UK’s top advertisers recognise as highly effective
media and audience targeting. It works across mobile and are thus increasing their investment in. This
platforms, uses programmatic methods and is now isn’t simply because its yields are extraordinarily
establishing exciting offline opportunities for digital high (14:1 ROI); it’s also because it’s a flexible
marketers. Affiliate data is packed with audience and creative space to work within that touches
and customer insight providing marketers with customers throughout the marketing funnel.
customer journey and point-of-sale perspectives
that enrich standard advertising analytics.
May 2014 3
1
Value 1.1 Online Performance
Marketing Study
1.2 Integration
1.3 The value of affiliate data
1.4 Flexibility
Demonstrating the breadth and impact of the
affiliate channel, its flexibility to meet a variety
of objectives, and the importance of planning
activity as part of an integrated approach
Online Performance Marketing Study 1.1
1.1
Online Performance
Marketing Study by Kevin Edwards
Strategy Director, Affiliate Window
Measuring the scope of performance marketing
In the last 6 months,
is more difficult than you may think. Given that
over 40% of survey
advertisers are looking at some sort of delivery
respondents have used a
Affiliate Window is a global performance marketing
mechanism or return on investment against the
network built on five core beliefs; SERVICE – ETHICS
price comparison, subject
– TECHNOLOGY – PERFORMANCE and INNOVATION.
majority of their digital marketing channels, it’s difficult
We exist to provide our clients with the best service
expert loyalty website or
and technology available in performance marketing.
to know where performance starts and ends.
Our aim is to exceed expectations in everything we
entered a competition
do. For a fresh, innovative and ethical approach,
Affiliate Window has all the right ingredients.
As the traditional affiliate and lead generation One of the most compelling pictures to emerge
channels have never had hard data to contextualise from the latest study is the diversity of activity the
the size of the industry, the IAB’s Affiliate Marketing channel encompasses, with price comparison,
Council took the decision two years ago to measure editorial, cashback, voucher codes and loyalty
spend on affiliate marketing, lead generation all featuring as important revenue drivers.
and other acquisition focused activity.
This has always been one of the channel’s strengths:
In the last 6 months, which
It was with nervousness that performance marketers offering retailers multiple routes to market based on
of the following have you used?
awaited the results of the first IAB / PwC Online their brand and product fit. The continued growth of 58%
Performance Marketing Study (OPM). They needn’t telecoms publishers within the channel has seen price
52%
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rsoaulensd o £r1 1b0n% fi ogfu UreK i ne c2o0m13m geerncee.r aTthineg in £d1u4sbtnri ewso trhtha to f osuf rbvuedyg seutb. Imt iist tiemdp doarttaa n(at tsoi zceoanbslied epro trhtiios nis i sa lmsoo dfreolmle d spon 39% 37%
e
make up the performance marketing ecosystem up by PwC) so is reflective of what more ‘traditional’ of r 30%
can confidently talk about some of the most affiliate marketing campaigns are experiencing. e
compelling dividends of any marketing channel. ar 22%
h
S 15%
The collective effort by affiliate networks, publishers,
11% 10%
third party tracking platforms, advertisers and agencies
to collate the numbers has also resulted in additional
areas of the industry being assessed such as sector
and publisher strengths, the growth of handset
transactions and breakdown of commission trends. Entere d a Pcriocme pceotimtiop naSriusbjoen cts iteexsp ert w e bsLitoeyalVtoy uwceh ebrSs iitcgeondeed wu ep tbsoi tae n eCwaslsehtbtPaerrcokv iwd eedb sipteerMssoobnilale /dveotuaiclshRere qdueeasl tae pd pa call b ackN o n e of th ese
6 Source; IAB / PwC Online Performance Marketing Study, 2014 7
1.1 Online Performance Marketing Study Online Performance Marketing Study 1.1
Content pips voucher and rebate websites to sit third, If we consider other trends from the OPM Study That said, commission breakdown data also included There is no doubt the OPM Study has helped
with paid search and ‘other’ in fourth and fifth place. it’s no surprise that handset traffic and sales have in the study highlights a growing trend of recognising put affiliate and the wider performance channel
As the channel grows in complexity and with mobile shown significant year on year growth, mirroring and rewarding value beyond the standard CPA (cost on the map. Boasting phenomenal ROI and
making huge strides over the past 12 months, we the wider online trend of consumers transitioning per acquisition) metric. Tenancy deals and content exceptional publisher diversity the stage is set for
can only expect that picture to further diversify. between devices at different points during the day. sponsorship witnessed a 60% growth between 2012 and advertisers to upscale their budgets and cement
The challenge for any marketer is now to marry 2013 to account for around 5% of the channel’s spend. the industry at the heart of their online plans.
From a sector point of view (and again focusing on
that data to measure consumer purchase paths.
submitted data) retail accounts for twice the advertiser There is undoubtedly a trend for certain publishers
spend of the next biggest category, that of travel and A new measurement for 2014 is the inclusion of and advertisers being able to secure additional
leisure. Close behind sits telecoms and finance. Typically interactions delivered by the channel. At over 4bn budget for promotional activity that reflects
a retail programme will boast a much longer tail of clicks (or 500,000 an hour) generated by an industry their growing status as brand partners.
affiliates than a service sector programme. This can that is only payable on a cost per acquisition model,
be attributed to the greater reach of general shopping this phenomenal figure shows the hidden brand
sites, blogs and price comparison, as well as the engagement value of the channel that is rarely
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Online Performance Marketing
expenditure by advertisers, 2013
Other
includes CPM, CPP, fixed fee
CPL and other payment models
c.8–10% of UK digital marketing spend
CPC
includes major price comparison
CPC sites and travel aggregators. c.10% of UK retail ecommerce
Ultimately these transactions are
measured on sales generated for c.0.8% of UK GDP
CPA
advertisers, but advertisers agree to
pay on a CPC rather than CPA basis
8 Source; IAB / PwC Online Performance Marketing Study, 2014 9
Integration 1.2
1.2
Integration by Mohammed Lakha
SMG Acquisition, Starcom MediaVest Group
This section looks at the importance of planning affiliate The interesting point to note from the image below is From a budgetary perspective, it is important to
that affiliate sites fall within all stages of the purchasing evaluate whether your offering requires an informed
activity alongside other areas of online as part of a funnel. Whereas historically it was widely regarded and calculated decision. If this is the case, more
that display was used to create brand awareness investment will need to be made with sites earlier
multichannel strategy. Discussing attribution, how affiliates and interest (and therefore paid on a CPM), search in the purchasing funnel including niche content,
was used when a consumer was considering their blogger and review sites where consumers go to
sit within the consumer journey and how learnings options (hence paid on a CPC), and affiliates were read up about different opinions and whether these
tasked with closing the sale (and so paid on a CPA), opinions suit their desire to purchase. However, it
from this can dictate strategy and budget allocation. the below model illustrates how affiliates are involved is worth noting that even some of the affiliate sites
from the very start. Because of the fact that they are that are viewed as sitting at the consideration and
only rewarded when an acquisition is produced the preference stages have now found themselves creating
Over the past few years, there has been an increasing Thirdly, the devices through which users navigate work they do further up the funnel is effectively free. brand awareness and interest in products through
shift towards a multichannel marketing approach the path to purchase are multiple. Most advertisers This is a much neglected selling point of the channel their huge followings with some affiliates surpassing
from companies looking to achieve a more integrated recognise the need to have mobile-optimised and not often reflected in the remuneration. a mammoth 300,000 followers on social media.
campaign. Their aim here is not just to measure all sites, but as there is at present no accurate way to
channels in a holistic way, but to glean from this data measure a single user’s behaviour cross-device,
an actionable strategy to apportion spend to the most where mobile channels feature prominently in the
efficient channels, usually defined on the basis of ROI. path to purchase it makes little sense to talk about a
However there are a number of challenges here. cross-device attribution model. This in turn hampers
the reliability of a cross-channel attribution model.
Firstly, there is no one-size-fits-all model for a
cross-channel attribution model. This is because Ultimately, when planning your marketing strategy,
different sectors have different purchase funnels it is a good idea to think of how you purchase online
over different times (think of the difference between as a consumer. When buying a shirt online or a pair
a considered purchase in the travel sector versus of headphones the amount of different touchpoints
FMCG) and, despite commonalities in the customer or sites you visit are very likely to be much less than
journey, individual advertisers will work with their if you were buying a new mobile phone or a holiday
Awareness Display | Affiliate
referral channels in different ways making the picture as these purchases require much more thought
different for each advertiser within a sector. before coming to a purchasing decision. Although
each site differs in nature, it is difficult to measure the
Secondly, user behaviour is changing all the time
as new actors come into the digital ecosystem. influence each one had on the eventual decision. Interest Display | Affiliate
Social, programmatic display and retargeting in
particular feature more and more in the user’s
journey and so any attribution model must both
Consideration Display | Search | Affiliate
reflect and keep pace with these changes.
Preference Search | Affiliate
Sale
1100 11
1.2 Integration Integration 1.2
Although the affiliate channel is relatively small both Instead, two fundamental questions should be Number of bookings (%) v channel ROI (£)
in terms of size and allocated marketing budget, asked about the place of affiliate activity in the
it certainly does punch above its weight. The bar multi-channel mix. Firstly, what is the publisher actually
chart opposite shows the results of a cross-channel doing for you as an advertiser? What exposure are
analysis by Starcom on all paid, owned and earned they providing, to what audience is this targeted, and
media channels for Flybe across an 18-month period. does this hit the consumer at the right point in their
It showed that the affiliate channel produced the purchase funnel? Secondly, rather than just looking
highest ROI of all activity, online and offline. at the path to conversion, what types of customer
is the affiliate channel referring? Are these high
It has been repeatedly demonstrated from independent
quality customers that are well-matched to the target
studies that shoppers coming via affiliate sites are
audience, with low levels of churn and high return
often more affluent, spend more on average but
purchase rates? And if not, which publishers within
also shop more frequently. It follows that the lifetime
the channel are performing better than others?
value of an affiliate channel customer is much
higher. Therefore, it is important to acquire these This chapter has discussed the integration of the
consumers throughout their decision making process affiliate channel with other online channels. It is
and work in tandem with other online channels to important to stress that mastering this integration does
ensure the effective conversion of that consumer not necessarily mean developing an attribution model.
from a merely interested party to a new customer. Moreover, an attribution model may be better used for
planning and understanding the user journey than it
With the affiliate channel working on a last click
is for developing a new payment model based on the
model and potentially many sites featuring within
role of each channel in the user’s path to purchase.
the purchasing funnel from awareness to sale, an
If the affiliate channel features at every point in this
alternative method of compensation to affiliates
funnel, it is too simplistic to treat it as a channel that only
by virtue of attribution has been widely debated
contributes value at the point immediately prior to sale.
and disputed. However the instances in which
such models have been put into practice are
few and far between, and the case studies
demonstrating their success even fewer.
Bra n d PNPoCn Bra n d P P C Display Bra n d T V S ale T V S p o ns T V N atiRoandialo Press Bra nRde gio n al PressO ut of H o m e Affiliates
Bookings (%)
Channel ROI (£)
12 13
The Value of Affiliate Data 1.3
1.3
The Value of
Affiliate Data by David Ayre, Account Director, TradeDoubler &
Julian Bazley, UK Director, United Digital Group
Whether you are building an affiliate programme Who tracks what Looking beyond the last click
from scratch or overhauling an existing programme, Advertisers, networks, publishers and agencies The foundations of the affiliate industry were
are continuously collecting data that can be used created on the back of a ‘last click wins’ model.
the value of affiliate data is something that is often to gain valuable insights into each part of the
By scrutinising the data collected across the affiliate
user journey and purchase behaviour. The vast
channel, it becomes clear why performance marketing
overlooked despite being the pillar of almost every levels of data collected across the channel provide
is growing at such an immense rate today. The value
advertisers with the opportunity to evaluate
affiliates bring to an online marketing mix goes way
online success story since the internet began. performance and gain insights into areas not
beyond straight revenue growth into areas including:
typically associated with the affiliate channel:
Brand exposure
User journeys
In an industry that has generated over £1 billion in
Whilst not all banner impressions are tracked
sales revenues and over 4 billion clicks (and at the Understanding touch points and behaviours
from the affiliate channel, 4 billion clicks equates to
same time achieved 5% conversion rates across that ultimately lead to the final transaction.
hundreds of billions of impressions across the UK.
12,000 publishers websites in 2013), the importance
Promotional opportunities
of affiliate data and its value for developing Early adopters
scalable strategies should not be overlooked. Giving a unique view of consumers’ search
Recent digital trends such as consumers
patterns and purchase behaviour.
By understanding data collected from various shifting purchase behaviour to mobile devices
sources, advertisers gain valuable insights that Strategic planning are identified early allowing advertisers to develop
extend further than online purchasing trends strategies for mobile or responsive websites.
By looking beyond the last click, advertisers can develop
(such as the shift of consumers to mobile devices).
cross channel strategies that add long term value to Assistance with converting other marketing channels
With seemingly endless amounts of data being
their brand whilst also achieving revenue growth.
collected it’s important to understand who tracks The very nature of affiliates earning revenue
what and how it can be put it to good use. on a last click model encourages high
levels of conversion where other marketing
channels may not have ‘closed the deal’.
Clicks to bricks – driving footfall
from online advertising
Large affiliates are increasingly moving towards models
that encourage footfall in to stores across the country.
14 15
1.3 The Value of Affiliate Data The Value of Affiliate Data 1.3
Putting affiliate data to use Advertisers
Through the analysis of data, advertisers can deliver
effective integrated marketing campaigns that can
be reviewed and optimised to deliver enhanced user
experience and increase revenues whilst strengthening
brand messages that ultimately deliver substantially Ad spend intelligence
improved ROI. This often blurs the lines between
affiliate and other marketing channels and can aid the
Consumer insights
transition to an omni-channel marketing strategy.
The uses of data collected from the affiliate channel
Strategic planning
are almost endless and can benefit advertisers
and publishers alike when shared effectively.
Targeted promotional activity
In today’s ultra competitive online space, it’s crucial that
commercial and marketing strategies are formulated
armed with the facts. Napoleon Bonaparte said: “War
is ninety percent information” and the same is true
when competing for placement to grow your revenues.
All this said, the true value of affiliate data sits beyond
Publishers
any one individual organisations’ personal gain. By
effectively combining data from multiple sources, truly
engaging collaborations can be developed that benefit
consumers, advertisers and publishers alike. In my
mind this is exactly what affiliate marketing should
be and is the foundation of performance marketing.
Personalisation
Consumer insights
Targeted promotional activity
Ability to optimise campaigns & promotions
16 17