High-class performance: Luxury brands find new confidence in affiliate marketing

Luxury brands have been notoriously shy when it comes to performance marketing, but diversification in publisher types, new technologies and the rise of content is bringing confidence to the sector, as Gina Lovett finds out.

It would be hard to not acknowledge the prevalence of affiliate marketing. More than a third of the UK internet population is now using price comparison or coupon sites according to the latest IAB/PwC Online Performance Marketing survey, while last year saw UK consumers make 150m purchases via affiliate websites totalling £13bn according to ComScore data.And with comparing prices, reviewing products or signing up to a loyalty programme now inherent in national shopping habits, it’s little surprise that luxury brands – historically shy of performance marketing – are now getting in on the act.According to digital marketing professionals, the last year has seen an influx of completely new brands from the luxury sector. Consumers are now as likely to see Tommy Hilfiger, Ralph Lauren, Net-a-Porter, Matches, Burberry, Gucci, Michael Kors, Jimmy Choo, Emporio Armani, Moschino, Valentino and Selfridges on price comparison sites as they are on city centre billboards. According to Diane Canady, marketing and e-commerce director of luxury tailoring brand Savile Row, it makes good business sense. To eschew affiliate marketing would be to not recognise how integral a part of the ‘multi-faceted’ the customer journey it is. The growth of premium, content-rich environments is helping fuel interest. Fashion portals are captivating consumers with a rich luxury experience, immersing them in the brand by enabling them to follow certain runway collections or curate individual outfits from a range of brands or collections.According to iCrossing’s head of media, Sam Fenton-Elstone, ‘super affiliates’ work well in fashion and retail as consumers tend to search for specific types of designer goods. Portals such as Shopstyle, Polyvore and Lyst have grown in prominence, network and reach over the last few years to achieve maturity.“Luxury brands are in good company; the experience is great; there’s good design and images, and great social interaction. It’s a strong brand-led environment. They are now being taken seriously,” says Fenton-Elstone.Tom Woodhouse, affiliate manager at iProspect, agrees: “Fashion aggregators such as Shopstyle, Polyvore and Lyst are able to place even the most premium brand in a luxury environment. There is definite opportunity for high end brands who would have traditionally never entered a space dominated by incentivised sites, which could damage brand credibility.”As Woodhouse points out, there is still hesitancy among luxury brands towards incentivisation. Vouchercodes, cashback and other such activity is likely to be perceived as discounting and can ‘distress the brand’. He adds: “The pitfall for luxury brands is most certainly brand protection, and how to maintain control of assets and the policing of the network on how they are promoted. This can be easily resolved with full creative control resting with the brand and all assets and marketing tools delivered via the affiliate networks.”The benefits and scaling out opportunities gained outweigh the risks to the brand, according to Fenton-Elstone. The brand risks are more of a “perception challenge”, he says, which is often the hardest bit. “If you’re restricted by brand, you’re not going to be able to scale out.”Canady sums up the challenge for luxury brands: “It’s a constant challenge balancing a very price sensitive market with protecting the brand credentials. You have to be strategic about things.” Coggles is one such luxury brand to have implemented a broader affiliate programme in the last nine months, according to Affiliate Window account director, Nicola Clare, who oversees the programme. The brand works with most affiliate types but has a policy never to discount the brands on site by offering codes. According to Clare, sales work “incredibly well and deliver increases”, which the voucher sites can promote. However, there are never discounts outside this. The largest contribution to revenue has come from fashion publishers including ShopStyle, Polyvore and ASOS. Clare puts the success down to Affiliate Window engaging directly with publishers to understand exactly what their requirements and technical set-ups are. This involves standardising product feeds so that systems can process and replicate them as closely as possible to the shopping experience. “Some advertiser feeds are incredibly poor with missing content, broken links or no images. Affiliates like ShopStyle spend a massive amount of time sorting that out. Equally the format of every networks’ feeds are different so they have to make those fit too. We just wouldn’t have achieved such successes without investing in the face-to-face time learning about each other’s business needs and building the all-important personal relationship,” says Clare.Despite the hesitancy of some luxury brands, there are a number showing even more confidence in the affiliate space, venturing beyond content and aggregation into tactical loyalty, cashback and discount programmes. The level of data insight that can be harnessed from these for targeting or personalisation can be particularly useful in customer acquisition and assessing customer lifetime value. Such is the motivation for luxury brands Hugo Boss, Armani and Diane Von Furstenberg all working with Quidco, offering online cashback between five per cent and 9.2 per cent. Hugo Boss offers eight per cent exclusively to Quidco shoppers, helping boost its five-star customer rating on the site. According to Quidco commercial director Andreas Andreou, while luxury names should be brand protective it’s important they do not miss out on opportunities that can help them drive more sales and bring in new customers.He adds: “We do a lot of Net Promoter Score analysis and more than often we find that customers using Quidco have a higher NPS than those that shop direct meaning they are more likely to purchase again. Our most recent NPS analysis showed 100 per cent uplift for one retailer.”Andreou emphasises the importance of working strategically with brands to ensure long-term success. Blanket offers and vouchers are best avoided, he says, especially if they can’t be controlled. Ed Fleming, head of PR and partnerships at Savoo, echoes the rich rewards of data insight, which guide incentive strategy and deal seasonality. Benchmarking the data, he says, will help work out the optimum time to implement. He points to Selfridges’ 20 per cent vouchercode offer, which ran across a number of sites including Savoo in the run up to Christmas 2013 as a ‘canny’ example. Fitting with its democratic fashion-for-all mantra, the luxury department store’s vouchercode offer catalysed a spending surge in the critical retail Christmas weeks – boosting revenue at the time of year when retailers are under pressure to make the bulk of their yearly revenue. “Selfridges probably wouldn’t do a deal like that again for the rest of the year but they gained a huge number of new customers and got a great deal of insight,” Fleming says.The diversification in publisher types, new technologies and the rise of content means that as a channel, affiliate marketing can now be much more closely aligned to how brands wish to their products to be marketed. While it might mean spending more time building relationships, in the long-term, it can only mean reaping the rewards from prevalence.This feature was first published in The Drum's 19 March issue.

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