The Drum speaks to a number of key figures operating in performance marketing to determine their view on what voucher codes and cash back sites can offer advertisers.
A recent report published by The Drum aimed to provide a comprehensive overview of performance marketing, from the perspective of advertisers, affiliates, networks and agencies in the space. In a series of online articles, we’ll be looking at the industry response to the questions posed in the feature, giving an insight into this ever-evolving discipline.In this article we’re taking a look at voucher codes and cash back sites. What are the benefits of using these websites as part of an affiliate programme? What should advertisers consider before implementing them? We hear from top affiliate sites Quidco and MyVoucherCodes.co.uk, as well as a number of affiliate networks and agencies operating in the sector.Subscribers can download the full report for free here.Andreas Andreou, sales director, Quidco
My advice to any advertiser in this space would be to look deep into the data and check the quality of customers each website is sending and also important metrics such as average transaction value and average frequency. Analyse your cost per sale and margins for each partner, and with the above data, identify profitable partners and those less profitable. Approach each one and discuss ways to improve performance. Look at all avenues and include other areas in your plans such as social media, mobile and offline. All of this will help you make the right long term profitable deals and partnerships.Peter Rowe, COO, MyVoucherCodes.co.uk
The main three questions I always ask marketing managers when they are looking at discount marketing are:
Gary Bicker, UK country manager, affilinet
- Do you want to discount? Is there an appetite for it, or will it never be on the cards? Brands like Gucci will probably never want to discount, sometimes there is just appetite for it in senior management.
- Can you afford to discount? What margin are you making? If you are playing with 2%, you will get very little back from voucher codes. 1.5% off is never going to spark significant public interest.
- Can you technically discount? This is more often than not the main barrier in working with us, more advertisers than you think don’t have the technical ability to discount on their website.
Voucher codes are exceptionally powerful in incentivising consumers to purchase products and services. Their popularity in recent years has grown exponentially – they are now brands in their own right with consumers specifically going to their sites to get the best offers available. To make sure that they deliver the right results, the key is to both think tactically and ensure that they are being managed in line with best practice. See below our top tips for ensuring that voucher codes are delivering value to your performance marketing programme.
Matt Bullas, managing director, Click Consult
- Be clear about what it is you are offering – a offer, code or exclusive code, as each have different benefits both to the advertiser and the consumer
- Types of voucher codes – vouchers can be very versatile and should be aligned to your marketing strategy. The broader the offer, the better your chances of reaching a wider consumer audience
- Terms and conditions – vouchers should always be offered alongside clear terms and conditions of user that a publisher can display. This is an ASA requirement to ensure transparency for consumers
- Margins and controls – publishers want appealing but ultimately sustainable offers for their users and therefore it’s important to test offers and be sure that the discount and total cost of sale sits within your profit margin
- Incrementality – “incrementality” is always an issue for debate in performance marketing, as is the very definition of the word. If you’re unsure of how to measure this in the voucher channel, try releasing short, tactical offers around key promotional drives to serve as more of a push mechanism.
The first thing to consider is whether or not you need voucher codes, or are the deals and sales on your website strong enough to push affiliates alone? It's also worth considering if your margins allow you the scope to offer higher discounts, as an extra discount can increase customer impulse buying and get better featured locations for the vouchers/brands. You should also ask yourself if the voucher discounts and commission paid is still leaving a worthwhile profit, and whether the voucher code is enticing enough in itself.A word of caution is that one study from fortune3* has shown that when visitors are presented with a voucher code input at the checkout, 27% of them will go in search of a code, and not all will return.Chris Bishop, founder and MD, 7thingsmedia
Essentially, a merchant needs to decide what it is trying to do when listing an offer on a voucher code site. Does it want to shift stock? Drive traffic? Get new customers? - by using voucher code sites to publicise free delivery, one of our clients registered a 70-80% in new customers over a one week period. At the end of the day the customers are on these sites to proactively browse and buy so conversion rates are naturally much higher.Some of our clients don't use voucher codes, others use them but do so sparingly.This industry is made up of a colossal spider's web of affiliates of all types. Sure, those most commonly associated with the industry are voucher codes, loyalty, and cashback but that glosses over the diverse blogs, aggregators, content sites, forums, and magazine/ lifestyle sites that represent a huge portion of the web, and thus a large share of that £5bn.A premium luxury brand we manage prefers to use content-orientated lifestyle, shopping and fashion blogs to push sales and traffic through the affiliate channel. This naturally is not a quick win situation, but by investing the time and creatively engaging with these sites and establishing firm relationships, we have seen revenue more than double from these content affiliates and a 200% overall increase in revenue across the programme. Blog positions may lack a killer conversion rate, but the steady growth speaks for itself.Kevin Edwards, strategy director for Affiliate Window
The Affiliate Marketing Council launched (and revised) the voucher code of conduct in 2009 offering advertisers and affiliates a best practice guide to working processes for the use of voucher codes. This initiative I think has been hugely helpful and the excesses of the space have almost entirely disappeared. Advertisers have to approach voucher coding with open eyes. They need to appreciate that they have control over what codes are offered, what they have to pay for and how these deals are disseminated. They need to do their homework (their network should be able to advise on a suitable strategy). They should also look at some of the more innovative technology in the market that offers them additional control. If done well and with the appropriate levels of control, monitoring and after-sale analysis, voucher codes are extremely powerful and effective tools.Understand the margin. Remember a code will have the initial discount, the affiliate commission and additional network or agency fees. Decide what sort of code to offer (for example new customer, general site wide discount, product specific deals or ‘stretch and save’ vouchers) and if an advertiser is concerned about how widely it will be disseminated, work with one affiliate strategically. Crunch the numbers and use this to inform future strategy.Also don’t just think about so called voucher code sites. Remember most affiliates (especially ‘content’ sites) can also feature discounts.Tina Judic, managing director, Found
‘What does offering a voucher code mean for the representation of my brand?’ is probably one of the key questions many merchants will, and should, be asking themselves. First and foremost, is discounting in itself something merchants wish to be associated with? Does this sit with the brand's image? A marketer will be clear on how they want their brand to be perceived and the messages they want any advertising and marketing activity to portray. If they feel discounting is appropriate, they must test, test and test again. Equally, if a merchant runs with voucher code affiliates then they must be sure to manage the impact (both positive and negative) it will have on the overall affiliate programme, and broader digital channel. It’s therefore important, like with any new channel, to test whether performance is incremental, whether users would have bought at the full price anyway, whether the users would have still found their way to the site and bought at full price and whether voucher codes have opened up the advertisers to a broader range of new customers.Sponsored By: