The Drum spoke to a number of affiliate networks and agencies operating in performance marketing to determine their view on what’s happening across the space.
In a series of articles, we’ll be looking at the industry response to the questions posed, giving an insight into this ever-evolving discipline.Today’s question is:What is the biggest attraction of performance marketing to retailers?Matt Bailey, commercial director, Performance Horizon Group
The biggest attraction to retailers is the ability to appear in front of new customers online whilst only rewarding the partner when a sale is made. The economic downturn has assisted affiliate marketing in this regard, as it is a channel with low entry costs and guaranteed return on investment. Affiliate marketing has also benefitted from the emergence of cashback and voucher code sites, which tap into a particular psyche amongst consumers that seems to be amplified in slow economic times. However, it’s not all rosy. Brands going bust clearly affects affiliate marketing, and the added scrutiny that a diminishing marketing budget brings means that certain practices (for example, brand bidding) have largely fallen by the wayside as belts are tightened.Chris Johnson, head of content, A4u
Today’s outlook on affiliates is far more exciting from a brand’s perspective. There’s the opportunity to run campaigns with mobile affiliates who can drive footfall to your high street stores, a comparison affiliate who reaches out to the ‘money saving ethos’ currently associated with the consumer market, or even an innovative publisher who has cleverly integrated data feeds into their vertical specific web properties. All of which showcases the development of the market and clearly signals that a campaign involving affiliates, for those brands who have embraced the channel, is reaping the benefits.Kevin Edwards, strategy director, Affiliate Window
Performance marketing is one of the most cost effective and transparent forms of digital marketing. It also allows advertisers to trial a whole range of promotional activity in as controlled way as they choose.We’re continuing to see double digit growth as a network. But actually where bricks and mortar could see resurgence is off the back of really well executed mobile affiliate campaigns. With the rapid rise of mobile we’re really focused on helping multi-channel advertisers to drive sales both on and offline. This doesn’t have to be in the form of a voucher, it could be any incentive to drive footfall and could also be payable on click, redemption or full tracking through to sale. From a business point of view it makes perfect sense: £9 in every £10 spent on retail in the UK is still spent offline and mobile is perfect mechanism to tap into this.Liane Dietrich, managing director, LinkShare
Online retailers are faring pretty well actually because consumers are still shifting their spend from offline to online. Many of LinkShare’s clients are doing better than ever. Overall, sales through the LinkShare UK Network is up 38% year-over-year which is far out-pacing overall e-commerce growth which the IMRG tracks at just 18%. The luxury fashion sector in particular, in which many of our advertisers work, is seeing very strong growth at 33% year-over-year, which is also nearly double the industry average. This is due largely to changing consumer perception around “value”. It’s a tough economic climate, but we have seen a shift in consumers shopping habits as they trade up to branded goods, choosing an investment piece at the right price, rather than just picking the lowest priced item. The strong growth of brands using affiliate programmes demonstrates the value of creating multiple brand touch points on websites across the internet, displaying the brands in locations where consumers seek out information or opinion to shape their shopping decisions. Gary Bicker, UK country manager, affilinet
Performance marketing offers retailers in particular some really big advantages. Aside from the return on investment, transparency and reach it offers, performance marketing programmes are also exceptionally flexible and provide an umbrella for all digital channels on a cost per acquisition basis. Retailers are undoubtedly going through a tough time and whether the Internet can save the high street or not is a topic of hot debate. Last month Google and Carphone Warehouse, amongst others, went head to head to debate the topic at a parliamentary debate. With online and mobile sales booming surely there is much the high street can learn from these channels? A blend of the two is perhaps the recipe for success rather than continuing to operate in silos.Indeed in recent months we’ve seen big consumer brands invest in the high street in order to compliment their online service offering. Businesses that have traditionally only operated on the web, such as Virgin Money, are expanding their operations and investing in a bricks and mortar presence as they seek to deliver a more personalised service. Mobile can also help bricks and mortar stores. For example companies like Vouchercloud are providing people with the best deals to be redeemed in store. It’s also gone one step further and if you opt-in to the location-based elements of the app it will use your location to provide you deals and discounts in the stores nearest to you. All three channels – the high street, online and mobile – can coexist and create a positive push and pull affect for retailers. Chris Bishop, founder & managing director, 7thingsmedia
There are incredible benefits attached to a successful affiliate marketing campaign which would sit high on the wishlist of any Marketing Director. The return on investment is generally amongst the lowest of all channels within the online marketing mix. Affiliates increase your presence and reach online and provide you with branding across the web, and increasingly offline.There is also considerable evidence to suggest that affiliates actively increase your conversion rates and consumer spend as well. This is due to the nature of how affiliates work; they are conducting a large element of the pre-sell of your products for you, they are optimising the opportunities for you, and therefore them, to make more money on each customer.As a subscriber you are able to download the full report below for free.
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