If more were less - how incremental are affiliate sales? Matt Swan and Kevin Edwards - Affiliate Window
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What would happen to an advertiser’s online sales if it were to close its affiliate programme tomorrow? This hypothetical scenario often foreshadows questions about the incremental value of affiliate marketing. If sales remained the same but were referred through other channels, what did affiliates add in the multi-channel mix? Would their sales have been made anyway?
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If more were less - how incremental are affiliate sales? Matt Swan and Kevin Edwards - Affiliate Window
- 1. If more were less: How Incremental are Affiliate Sales? Kevin Edwards Strategy Director @Affwin_Strategy Matt Swan Client Strategist strategy@affiliatewindow.com
- 2. hat is ‘Incremental’? . Cashback 2
- 3. What is Incremental? DISPLAY EMAIL SEARCH AFFILIATES SOCIAL 3
- 4. What is Incremental? If affiliates were removed a portion of total online marketing sales should be lost Milano | 29.03.2012. | Owen Hewitson, Client Strategist, zanox | If More Were Less: Ensuring Your Affiliate Sales Are Truly Incremental 4
- 5. What is Incremental? But what if Affiliates were removed and no sales were lost? 5
- 6. Average Order Value What is Incremental? New vs. Existing Volume Frequency Churn Profitability Demographics Upselling 6
- 7. What is Incremental? Cross-channel reporting is vital to understanding incrementality De-duplication is not an attribution strategy! 7
- 8. What is Incremental? How many channels are Affiliates de-duplicated against? 8
- 9. What is Incremental? What channels are de-duplicated against? 9
- 10. Cashback Are Cashback customers low earners who will not shop without rewards? Milano | 29.03.2012. | Owen Hewitson, Client Strategist, zanox | If More Were Less: Ensuring Your Affiliate Sales Are Truly Incremental 10
- 11. Cashback Are Cashback members existing customers already? 11
- 12. Cashback Do cashback sites discourage loyalty to advertisers’ brands? 12
- 13. Cashback ugely successful affiliate urgeoning sector worth c.£1bn ver indexes on many customer quality indices reated powerful retail brand (top 50 UK Hitwise retail sites) ffers range of promotional opportunities 13
- 14. Cashback Do cashback sites misrepresent advertisers’ brands? Circulation: 950,000 p/w Cost: £10,500/ €12.000 14
- 15. Cashback Do cashback sites misrepresent advertisers’ brands? Page Views: 800K p/w Cost: £1000/€1.200/WEEK 15
- 16. Cashback For one cashback site, 73% of sales involved no other affiliate... ... And no other channel! 16
- 17. Cashback • 31% of affiliate sales involved only affiliates • 92% of affiliate sales involved only one touchpoint • Affiliates lose out on 7% of sales but are assisted 19% of the time 17
- 18. Voucher Codes ● Voucher code sites are not just for voucher codes ● Voucher codes are not just for Voucher code sites ● The type of code is key in encouraging incremental sales Milano | 29.03.2012. | Owen Hewitson, Client Strategist, zanox | If More Were Less: Ensuring Your Affiliate Sales Are Truly Incremental 18
- 19. Voucher Codes ree delivery codes Quick Expire’ Codes ite abandonment codes tretch-and-save codes 19
- 20. Voucher Codes Guarding exclusivity by tracking the voucher code used 20
- 21. Voucher Codes: Case Study Code box either hidden or displayed based on referring URL Deal ID has to be combined with affiliate ID Discounted price already applied on site
- 22. Voucher Codes: Case Study Greater control over authorised use of codes Reduces abandonment when user sees voucher code box Fairer to affiliates as cookies not overwritten Codes can be offered to non- code sites from the Long Tail
- 23. Behavioural Retargeting here are the ads appearing? hich sales are post-click and which are post- view? re ads above the fold? re ads frequency-capped? 23
- 24. Behavioural Retargeting: Case Study New customers by affiliate 24
- 25. Behavioural Retargeting: Case Study 25
- 26. CROSS-CHANNEL ATTRIBUTION – CLIENT A AFFILIATES CONTRIBUTE TO 57% OF SALES • 31% of Sales are “truly incremental” • Affiliates lose out on 7% of sales but are “helped” 19% of the time
- 27. ATTRIBUTION WITHIN AFFILIATE CHANNEL 92% OF AFFILIATES SALES INVOLVED ONLY ONE AFFILIATE
- 28. 61% 32% 7%
- 29. 78% 17% 5% 7%
- 30. 50% 36% 14%
- 31. Aff Channel
- 32. Cashback
- 33. CUSTOMER VALUE VARIES BY AFFILIATE CAN NOT TREAT TWO AFFILIATES IN HE SAME SECTOR THE SAME
- 34. ssess incrementality in context of changing consumer habits here is no one measure of incrementality: Look beyond volume to value ook at cross-channel paths to purchase and where value is added – A single attribution model does not work for all partners emand insight into publishers’ audiences or member 34
- 35. Thank You! Email us to receive our Incrementality White Paper and to sign up to our monthly newsletter: strategy@affiliatewindow.com Kevin Edwards, kevin.edwards@affiliatewindow.com Matt Swan matt.swan@affiliatewindow.com @Affwin_Strategy
Editor's Notes
- Opening remarks: Incrementality major issue in UK. Looking at how some publishers and advertisers in the UK have demonstrated incrementality with their publishers. What you can do, as publishers, to showcase yourself better to advertisers via zanox’s Marketplace.
- Key question for advertisers is whether the sales they receive from affiliates would have been made anyway Different channels that contribute sales to the online marketing panettone
- If you took affiliates away – if you closed your affiliate programme tomorrow – you should take away a slice of those sales
- But what if you removed the affiliate channel and the sales stayed the same? This would tell you that sales from affiliates were not incremental.
- Context of online shopping habits – rise of deal-conscious consumer A certain proportion of customers will have transacted on an advertiser’s site anyway Thus need to assess incrementality on metrics of sales value rather than sales volume – what makes a sale valuable?
- Questions of attribution go hand in hand with questions of incrementality. Attribution is about understanding the touch-points in the user’s click path and the most common click-paths or routes to conversion. This requires data rather than guess-work. De-duplication is not an attribution strategy. De-duping different channels doesn’t tell you anything about the part they play in the decision to purchase. Again, requires data not guess-work.
- Affiliates losing out as much as they gain because advertisers de-dupe instead of attributing correctly. E.g., 92% de-dupe against paid search, which is rarely incremental.
- Affiliates losing out as much as they gain because advertisers de-dupe instead of attributing correctly. E.g., 92% de-dupe against paid search, which is rarely incremental. Caveat to what follows – advertisers should not rely on categorisation too heavily; publishers should showcase how they cross different categories
- At competitive times of year people shop around. Thus tactical as well as strategic partners to leverage customers’ loyalty. Quidco member demographics – almost half earn the equivalent of €60k A major high street department store profiled the types of customers that their major cashback, loyalty and reward affiliates referred over a given period. These sites produced an average number of new customers compared to their other affiliates, but those customers transacted more frequently and spent a considerable amount more than those from other affiliates.
- 52% of TopCashback’s members say that they have used cashback sites to purchase from a brand that they had never considered buying from before. 49% say that they have found new brands on cashback sites that they continue to use.
- Cashback sites by their nature trade on the loyalty of their members. The key thing for advertisers is to know who these members are so that they can target them much better. Example from an affiliate running corporate reward programmes. Offer deals solely to the employees of those companies. Means that they can guarantee that they are reaching a certain audience.
- Cashback sites can also encourage brand awareness. Because they are only paid when the sale is made, the ‘branding’ element is free. And moreover, it is makes better sense economically than more traditional branding channels. Example compares print – Guardian newspaper in the UK. What one advertiser was quoted for inclusion on the front page of their weekend supplements.
- Inclusion on the homepage of one of the UK’s leading cashback sites costs a lot less and reaches almost as many people, but more often, and being an online actor the cashback site knows much more about their users’ shopping habits.
- For one cashback site, 73% of sales involved not only no other affiliate, but no other channel. So absolutely incremental. This advertiser found that not a single affiliate site was the same as another when it came to their number of assists, the amount of sales they were helped out in versus those that they were helping. This means that the same attribution model is not going to work for everyone. So an attribution model is for reporting/analysis, not payment. The lesson here is that you have to look at affiliates – indeed, all actors referring you sales – differently.
- By looking at data we can prove: Incremental Sales 31% of affiliate sales involved only affiliates as a touch point 92% of affiliate sales involve only one affiliate touch point In other words, for over a third of their sales in this particular category they can say that they wouldn’t get them if they didn’t have the affiliate channel. This immediately answers the incrementality question.
- Voucher code sites are not just for voucher codes – repositories for deals, etc. As with Cashback, consumers want to feel they are getting a good deal rather than money off Voucher codes are not just for voucher code sites – can be offered to any kind of site. Advertisers may want to offer exclusive codes to sites demonstrating best results (AOVs, Churn, high profit products, new customers, etc). Types of codes used are key in encouraging incremental sales – have to be used tactically – blanket codes are untargeted and often de-value the brand
- Free delivery codes: 61% of US consumers will cancel purchase if not included; AOVs 30% higher with free delivery Quick expire codes: too often codes last Mon-Fri, 1 st -31 st Site abandonment codes: via email re-marketers Stretch and Save codes: to increase AOV For particular types of customers: e.g., new vs existing
- Exclusivity can be guarded through the use of voucher code tracking Reported back as a separate field in the infromation collected by our network at the point of sale. This is a screengrab showing that advertisers can commission on sales from affiliates made using codes that were not authorised for them. Prevents codes going viral.
- Technological solution put in place by the advertiser. Represents best example of industry-leading best practice in the voucher code market in the UK
- Allows for increased flexibility in the use of codes
- 1. Because a) blind network and b) competition in auction-based environment with display provider 2. Important to de-prioritise cookie; perhaps pay different commissions 3. comScore recently published research showing that 31% of display ads are never even seen. Paying on CPC as a solution 4. For user experience and because PV cookie dropped each time. 5. Cookie dropped on impression so potentially no intent and customer may have returned anyway (insert graph showing lag time)
- The BRT provider is out-performing all other affiliate types on the number of new customers, for every month in this study...
- However the proportion of sales that are generated through post-click sales are very minimal. Could be that advertiser wants to treat the campaign with a BRT as hybrid branding/acquisition campaign, however.
- Looking at one of our telecoms clients we are able to see the customer journey and the touchpoints that they interact with on their path to conversion. This chart indicates that the affiliate channel contributes to 57% of all their online sales. If we just focus on this 57%, we can see whether there has been another channel involved in the sale. In the dark blue, 31% of sales only has involvement with the affiliate channel. There has been no other touchpoint in the customer journey. To this extent we are able to say that 31% of sales are truly incremental. Without the involvement of the affiliate channel, this client is highly likely to not have received these sales. The 19% in the slightly lighter blue shows where there have been other channels involved prior to the affiliate channel being awarded on a last click basis. In essence, the affiliate channel has been assisted by another channel 19% of the time. What advertisers may not understand is the role that affiliates play in a customer journey before the final click. The 7% shows where an affiliate has assisted within a sale, but the sale has been closed by another channel. The role of the affiliate could have helped the customer decide on a product whether this was through a product review or price comparison tool. Without the affiliate activity, would this customer have converted anyway? In order to understand the incrementality of the affiliate channel, advertisers need to gain insights into the multichannel customer journey to be in a better position to analyse this.
- We can take a closer look at the sales that have come through the affiliate channel and how many affiliate referrers there are in place. Contrary to popular misconceptions, on the majority of instances there is only a single affiliate referrer in the user journey. For this advertiser we see 92% of sales with just a single referrer. This will vary from sector to sector but typically, the vast majority of sales will have a single referrer. For this advertiser, the highest number of affiliate involvements is three. Where there is more than one affiliate referrer we can take a closer look at the affiliate promotional types that are involved, who is overwritten and who is doing the overwriting. The nature of the product available from this advertiser lends itself to price comparison – price comparison is typically the most overwritten promotional category but it is also the one that does the most overwriting. The category that typically overwrites more than it is overwritten is loyalty/reward, with these channels primed to close. Advertisers are able to use this data to understand the promotional types and indeed the individual affiliates that are offering value beyond simply being the last click. For example, price comparison sites are adding value earlier on the user journey and could be offered tenancy deals or hybrid payment models to reflect the value they are adding beyond just being a pure acquisition channel. It is important to remember that we are only looking at a very minimal percentage of sales that have more than one affiliate involvement
- Data from the advertiser has also allowed us to look at how individual affiliates fit within the wider online mix and how consumers interact between various touch points. In this we are able to see where the affiliate channel was the only touch point, where the affiliate channel won the sale where another channel had been involved and where the affiliate was involved in the user journey but did not win the sale on a last click basis. Where the affiliate channel has been involved but another channel ultimately won the sale – we are able to see which channel the sale was attributed to. The first instance looks at a price comparison affiliate. Half of their sales only involved the affiliate channel. Indicating that 50% of all sales through this affiliate are truly incremental. Only 6% of the sales the affiliate won on a last click basis had another channel involved earlier in the user journey while the affiliate contributed to 44% of sales before the final click took place. This again highlights the value of the channel beyond simply being the final click. Of the 44% of sales where the affiliate has assisted we are able to see which channels the sales were attributed to. 61% of sales were attributed to search (predominantly brand search), 32% to display and 7% to another affiliate. This affiliate has clearly demonstrated the ability to deliver incremental sales on behalf of this advertiser
- This slide focuses on one of the leading cashback sites. Cashback is one of the promotional types that comes under increasing scrutiny in terms of incrementality. Again, this affiliate has demonstrated the ability to deliver incremental sales with 49% of all sales having this affiliate as the sole click. In addition they also have an involvement in 22% of sales that are attributed to another channel. This paints a different picture to that in the previous slide for the price comparison affiliate. 78% of sales where this affiliate assisted was attributed to another affiliate. Typically, consumers are aware of the concept of discount or cashback and will compare offers before transacting. Typically, the majority of sales awarded to another affiliate will be another form of discounted site.
- Finally for this advertiser we can look at one of the top voucher code sites. Again, a large proportion of sales sees this affiliate as the only referrer in the user journey and again they assist a large volume of sales. This vouchercode affiliate has assisted in 40% of sales (the majority won by search) while it has been assisted by other channels 15% of the time. Each of the affiliates examined for this advertiser have demonstrated the ability to drive incremental sales
- We are also able to look at an advertiser in a different sector to assess incrementality through the affiliate channel. The next few slides look at an advertiser within the travel sector. The first slide looks at the affiliate channel as a whole. Again, this demonstrates that the affiliate channel was the only channel present in the majority of sales driven by this advertiser. 69% of sales only had involvement from the affiliate channel. In addition, the affiliate channel assisted in 20% of sales, while it was assisted in 11% of sales. We can take a look at the channels that won where the affiliate channel assisted, and also the channels that assisted before the affiliate channel won the sale. Again, we typically see PPC activity winning a sale where the affiliate channel has assisted with brand PPC being the dominant channel. Other partners that this advertiser works with directly such as some of the largest price comparison sites in the sector are also benefitted by affiliate involvement. In terms of assisting the affiliate channel, the most overwritten channel is a display impression. Not too surprising considering this is traditionally a branding tool rather than an acquisition channel.
- As Kevin mentioned – incrementality should also consider more than just if the sale would have happened without the involvement of a particular affiliate. There are strategic opportunities through the channel to increase the customer value that is driven through these affiliates. This chart highlights the value of customers driven by individual affiliates. It highlights that it is important to consider each affiliate on their individual merits. While they may look similar in terms of their promotional type they will attract a different audience and the customer value will vary. For example, in the green bars, there is a significant difference in the value of customers that each of the voucher code affiliates generates.
- 1. Because a) blind network and b) competition in auction-based environment with display provider 2. Important to de-prioritise cookie; perhaps pay different commissions 3. comScore recently published research showing that 31% of display ads are never even seen. Paying on CPC as a solution 4. For user experience and because PV cookie dropped each time. 5. Cookie dropped on impression so potentially no intent and customer may have returned anyway (insert graph showing lag time)