The increase of branded affiliates has increased consumer and advertiser confidence in performance marketing. The Drum spoke to three such affiliates – Quidco, Savoo and VoucherCodes – to get their views on how the industry is evolving.
The IAB Advertiser Affiliate Survey recently found that 61 per cent of advertiser respondents plan to increase their marketing spend in the affiliate channel in 2013, reflecting growing confidence in performance marketing.
The shift of affiliates becoming brands in their own right is one potential reason for increased trust in the channel, with affiliate sites such as Quidco, Savoo and VoucherCodes becoming household names across the UK. Where previously performance marketing may have been seen as a niche channel, undervalued in comparison to the rest of the marketing mix, it is now becoming mainstream with the growth in popularity – and consumer trust – of affiliates. As a result, big name advertisers are beginning to understand the importance of an affiliate programme and the measurable, trackable results it can achieve.
So what role do branded affiliates play in future advertiser investment in the channel? Andreas Andreou, commercial director, Quidco, argues that branded affiliates are key to ensuring longterm investment from advertisers.
“Some advertisers, rightly or wrongly, tend to cap affiliate budgets. Branded affiliates will be key to unlocking these budgets. As Quidco expands and develops across other platforms, including mobile, in- store and social media, budgets can be unlocked from other areas of the business to help drive additional advertiser investment.”
Ed Fleming, head of PR and partnerships at Savoo.co.uk, cites the importance of Google in online brand building for affiliates.
“Google is paying less emphasis on EDM domains, which therefore means sites like Savoo and Quidco, that do not have a keyword in their name, now have more of an opportunity to build an online brand and rank higher in SEO.”
Further to that, Fleming says, Savoo is seeing increasing amounts of brands paying tenancy – a reflection that brands recognise the value with affiliates is “more than just CPA”:
“We are offering millions of eyeballs every week and advertisers don’t want to miss out on them.”
VoucherCodes.co.uk co-founder Max Jennings argues that “differentiation is key” in the highly competitive performance sector and that “sites that can successfully make the transition from a step in the purchase cycle, to fully formed brands are in a great position to own the space next year.”
Sharing of data
Data is key to the success of performance marketing, but what do affiliates see as a priority in terms of the data they have access to? Would they like to see more sharing of data from advertisers?
While many affiliates are proactive in sharing data with partners, “there are very few advertisers that share data with their publishers”, according to Quidco’s Andreou: “We naturally have a lot of data because we track data such as onsite user journeys, customer activity, usage and share of wallet. Advertisers are eager for this data as it can help shape their activity. What’s more, this data can become even more powerful when there is synergy of data sharing between both partners.”
Fleming argues that data sharing is essential because affiliates are “not mind readers”. Understanding what’s selling well on a retailer’s site is vital for the affiliate.
“For a deal site like Savoo it doesn’t even have to be ‘big data’”, explains Jennings. “We are currently offering retailers deal intelligence reporting on a regular basis (so affiliates can share data too) which is offering retailers opportunities to refine and optimise deals to create better ROI and conversion.”
The role of voucher codes and cashback affiliates
While they are very popular with consumers, can voucher code and cashback affiliate sites truly drive incremental value for advertisers?
Ed Fleming argues that the answer lies in the ability of such sites to control the user journey, increasing order values, cross selling and creating new customer acquisition. “But going a step further,” he says, “we [VoucherCodes.co.uk] are becoming more of a multichannel destination site; offering incremental reach via channels like e-mail, social, community and apps, all of which can help the advertiser when it comes to creating incremental value.”
Meanwhile, Andreas Andreou argues that the transparency of the channel means it is easy for advertisers to identify incremental value.
“Affiliate marketing is a very transparent market – far more so than TV, print or broadcast marketing. This transparency and the reams of data available within the industry make identifying incremental value a fairly straightforward process.”
With regards to driving new customers, increasing basket values and aiding customer retention, Max Jennings argues there is a lot of evidence that voucher codes “drive a considerable incremental value”.
What's next?
So what’s on the radar for affiliates going forward into 2013? Max Jennings highlights mobile tracking as a key issue.
“Mobile tracking will be a hot issue in 2013. Levels of traffic to retail sites from smart phones and tablets continues to grow unabated, however the technology required to track across mobile channels has not kept pace with this growth.
“Over the next 12 months we’ll see smart new solutions to support traditional affiliate tracking models as mobile becomes an increasingly important channel for UK retailers.”
Another key issue for affiliate sites is keeping abreast of Google updates, as highlighted by Ed Fleming:
“For Savoo, SEO is crucial. We are always asking ourselves what Google’s algorithm is going to do next, and trying as hard as we can to ensure the changes we make to the site are what we think Google wants from an affiliate. To that end UX and design are crucial for us in 2013.”
Lastly, education will be key for affiliates as they try to gain access to greater portions of the marketing spend. Ed Fleming says it’s important that “retailers understand the value and professionalism of businesses like Savoo”, while Andreas Andreou explains:
“Rather than spending budget in areas that drive little return and fewer incremental sales, our aim is to show our retailers how they can work with Quidco in a more measurable and effective multichannel way.”
This feature is part of the performance marketing supplement published with The Drum's 14 December issue.