Retailers reevaluate their affiliate marketing programs
October 12, 2016 01:08 PM
Retailers are changing the way they look at members in their affiliate marketing networks to determine where to allocate their marketing budgets.
“The people who are ahead of the curve are really beginning to evaluate things on a cross channel, cross device factor and trying to look at the success of their marketing in as many ways as they can,” says Dan Sweeney, group vice president of corporate development at affiliate marketing vendor CJ Affiliate. “That is a huge change from where they were even a year or two years ago, (when) almost everyone was on the trajectory where (they said) this is online, this is what I’m doing, this is mobile, this is what I’m doing and they were all separate.”
Taking a holistic view of individual affiliates can pay off, as gourmet food gifts retailer Harry & David learned when it used a last click attribution model to evaluate the success of its affiliates in its network.
Christian Schwindle, digital marketing manager at Harry & David, says the company began using CJ Affiliate’s Affiliate Customer Insights tool last fall to analyze the overall traffic trends of each affiliate’s web site to see how they were performing from in search engine rankings and total traffic and not just as those metrics related to Harry & David web business.
“There might have been some opportunity that we missed by not having the tool but as soon as we got the tool, we saw that certain publishers (affiliates) were trending really well and were getting more (overall) traffic than they had” using an analysis based just on traffic they delivered to Harry & David, says Schwindle.
Schwindle says he and his team used new measurement approach to identify a coupon site, in its affiliate marketing program that was trending significantly higher in terms of total traffic during the 2015 holiday shopping season. Based on that information, Harry & David decided to increase its ad spend with this affiliate nearly tenfold from the previous year.
Not only was the increase in Harry & David’s investment in this particular affiliate significant, so too was its return on investment. Schwindle, who refused to identify the affiliate, says the amount of revenue generated by that particular affiliate “went from five digits to seven digits,” declining to specify further. Harry & David’s parent company, 1-800-Flowers.com Inc., ranks No. 57 in the Internet Retailer 2016 Top 500 Guide.
“It was us putting our foot forward and putting faith in them first but we really saw the return benefit,” he says. “It’s an easy pitch (to get more budget allocated to affiliate marketing) when the numbers increase so much year over year.”
Online retailers are also starting to become more selective when it comes to the affiliates they work with.
“At a high level, people who have a great social media presence, are starting to make a splash in our space in terms of driving meaningful sales for our advertisers,” says Adam Weiss, a senior vice president at Rakuten LinkShare. “You still have your tried and true foundational affiliates, your loyalty publishers, your coupon sites, but we’re seeing a lot of the content-based editorial publishers having an impact on programs.”
Take, for instance, online and direct mail clothing retailer Boden, No. 158 in the 2016 Top 500 with an Internet Retailer-estimated $211.4 million in online sales last year.
Megh McArthur, the company’s former digital marketing manager who left not long after Internet Retailer interviewed her for this story in August, says the company has 98 affiliates in its affiliate network, with the majority of those sites being coupon sites. That’s a far cry from the size of affiliate networks that retailers of similar size have, which frequently numbers in the hundreds or thousands.
“For the amount of (affiliates) that we do bring in, we reject 30 to50 every other month,” she says. “We will scrutinize them pretty heavily.”
McArthur says she’s focused more on affiliates that drive new customer acquisition rather than ones that get shoppers who have already bought from Boden to buy again.
“We look at our coupon sites and we’ll look at placements that have never heard of Boden before,” she says.
McArthur says loyalty sites such as Ebates, which reward shoppers with perks such as cash back or other discounts, are particularly effective in helping her to both identify and then target new customers.
“Loyalty sites have a big database of people getting cashback so we’ll leverage that information of people who haven’t shopped Boden before but may have shopped similar brands,” she says.
Part of that comes from knowing where their target shopper tends to shop. In Boden’s case, the company is competing with the likes of young adult apparel manufacturers such as J. Crew Group Inc. (No. 49) and Anthropologie (parent company Urban Outfitters Inc. is No. 39). Armed with that information, the company will then tell sites like Ebates to target messages from Boden to people who have shopped with those retailers.
“They know if she’s shopping at these places, she’s likely to shop at Boden as well so let’s target her as well,” she says. “We do a new customer bonus (for affiliates), so we have a pixel that identifies customers new to file and we can commission publishers higher (on those) than we would a returning customer.” McArthur declined to specify how much more Boden pays for an affiliate that refers a new customer versus one that refers a returning customer.
For more on how retailers are evaluating their affiliate marketing programs, check out the October edition of Internet Retailer magazine.