Meet the new boss,
same as the old boss

Industry
The IAB recently released figures stating that this year has seen a 45% uplift in investment from brands in their affiliate programmes. The channel is developing and advertisers are taking note, but there are still many untapped opportunities, Chris Bishop Founder & CEO of 7thingsmedia explores.

The channel has never been in better health. Growth has been as such that affiliates – brands within their own right – now, in some cases, have a bigger marketing budget than the advertisers they represent.

However, despite the year-on-year increase the affiliate channels contribution, share of the marketing mix is still relatively low compared to search and display; why is this?

Perhaps it could be viewed that the channel’s own internal lobbying to be known and seen as a performance channel is limiting the channels role within the digital mix.

For a number of years the affiliate industry stated that it is a virtual risk-free channel where you only pay for what you receive. When financial hard times hit UK brands the industry stated that the affiliate channel was the only true performance channel where brands should invest their last pound because of the revenue return.

And herein lies the problem: if you only view a channel as providing a particular ‘worth’ or ‘role’ within your digital mix, your return will be limited. If affiliate marketing is viewed only as offering a voucher code, people will only use the channel if you offer them a voucher code. Similarly, if performance marketing is only viewed at driving sales at the bottom of the purchase funnel, you will only use the channel to close sales.

The channel can appear complex due to the type and variety of stakeholders. However this factor offers the opportunity for brands to explore partnerships and reach new audiences that they might not have been able to reach with traditional digital advertising.

Henry Ford once said “If you always do what you’ve always done, you’ll always get what you’ve always got.” This can be directly applied to your digital advertising and, more specifically, the view towards the role that each channel plays.

Reason why value might be low
Research conducted by Forrester this year found that the majority of people perceive they get a better deal online, and this perception is reason enough to leave their car in the garage and shop on the internet.

Deal shoppers are often considered lower value customers; however this is a common misconception. Salary level bears no correlation to the likelihood of a shopper to use a deal site.

Where we see the value
Brands need to see online channels as virtual shopping shelves, just as merchandisers in a shop will ensure every shelf is strategically filled, so should brands view their online campaigns. It is imperative that brands do this and failing to do so could be extremely damaging.

Forrester also found that a third of online shoppers surveyed actually began their online shopping process from an affiliate site, this highlights the influence that affiliate sites hold, being able to influence consumer shopping habits prior to intent.

Branding and direct response
Performance is defined by paying on a Cost per Action (CPA). The CPA does not always have to be due to the net result of a sale taking place.

By understanding that CPA does not have to be associated with a sale the channels reach and opportunities can become limitless and underpin the entire marketing mix – online and offline.

Branding can happen within a direct response environment. The only thing that needs to take place is the stake holders understand what the direct response metric is for remuneration.

Where our clients see the value
Within the agency our ethos is to challenge assumptions by letting data lead the strategy and not let assumptions lead the strategy.

This means that we do not just focus on one particular channel to achieve the end result but focus on each individual touch point within the purchase funnel – all the time challenging assumptions of a channels role by reviewing the data.

The end result is devising a truly integrated strategy for our clients that do not shoehorn the brand into any one channel, or a channel reporting to only one set of performance metrics.

Our clients now find themselves being able to immerse their brand more creatively into the performance marketing channel whilst still commonly seeing triple-digit year-on-year revenue growth.

So herein lies the solution: challenge your own perceptions of what the performance channel can provide for your own marketing activities because the opportunities can be limitless.

Otherwise: meet the new boss, same as the old boss.

Chris Bishop
Founder & CEO
7thingsmedia

7thingsmedia
Tel: 020 7017 3190
Email: hello@7thingsmedia.com
Web: www.7thingsmedia.com
Twitter: @7thingsmedia