I’ve split the presentation into three sections. First we’ll look at some trends that we’re seeing on the Affiliate Window network (largest affiliate network in the UK). Then we’ll look at how affiliates are both driving and taking advantage of these, and what benefits there are for advertisers.And finally we’ll look at a few of the challenges that currently present themselves for those looking to work in affiliate marketing with methods of promotion involving mobile.
The sources are hyperlinked – copies of the presentation are available on request.Smartphone penetration: that 33% figure comes from a study by Flurry looking at app usage. At 17.2 million it’s the largest in Europe.23% of time: when you think about people using social networking sites, location-based services, etc that makes a lot more sense.One third using m-commerce: research from Foresee. That doesn’t mean that all of those people bought something. In fact, it stands at 8% in the UK.
At Affiliate Window we’ve been looking at mobile sales across the network – 70k active affiliates; 900 advertisers – since December.This first slide looks at the percentage of mobile-driventraffic across the Affiliate Window network over that time.
Percentage of mobile-driven sales across the Affiliate Window network. So currently we are seeing around 4.5% of sales tracked through the network coming through a mobile device. Importantly, this is regardless of whether an advertiser has an m-commerce site – we’re just looking at sales made off the back of mobile devices. By this we include iPads and other tablets. So what this represents is an opportunity for advertisers to embrace affiliates that are multi-channel, offering multiple routes to market. It also shows how offline can interact with online, how one can influence the other.
Now if we look at mobile traffic and sales by device – first, traffic. On the left hand side is the percentage of mobiletraffic for each device; on the right hand side the number of clicks. The blue bars are for benchmarking – trend for mobile traffic overall in terms of volume rather than percentage[does not relate in itself to the percentages on the left].TheiPhone is the top traffic-driver consistently, which we would expect because it is the most popular handset. But as iPad ownership rises the gap closes.
And here is how the devices perform on sales. Again, on the left hand side is the percentage of mobile sales each device accounts for; on the right, the number of sales. The blue bars are for benchmarking – trend for mobile sales overall in terms of volume rather than percentage [does not relate in itself to the percentages on the left].When we look at sales the gap between the iPad and the iPhone is much closer.
So we know that Apple devices are far and away the biggest drivers of traffic and sales.But althoughthe number of sales produced through Apple devices – the iPhone and the iPad – has risen, the proportion of all mobile sales they account for has fallen. And this is in line with what we are being told about the market share of the different devices. ICM’s figures from June, in a poll of 1930 people, have the current share at:Android: 13%RIM: 10%Apple: 9%
When we look at conversion rates by devices we actually find something very interesting:all mobile devices are converting above the network average and have been since March. Before this, only the iPad was out-performing the network average.This really shows that the scale of the opportunity: that whilst only 8% of people in the UK have bought something on their mobile (outside of music, an app, etc), even though many advertisers do not already have m-commerce sites the conversion rates still exceed the network average.
But do people have the confidence to buy something of high value on their mobiles?Our data suggests not yet.This is the latest data from March and we see that with all mobile devices the AOV is under the network average. However the iPad is almost there, reflecting the fact that shopping on an iPad is closer to a desktop or laptop experience, and therefore likely to give greater confidence to users.One caveat to this: we do not track the AOV for all advertisers. For example, taking out a loan or a mobile contract counts as an order tracked at a nominal value of £1, so these may not be accurately represented here.
So we know that mobile is a massive growth area and represents a big opportunity, but what’s the relevance specifically to the affiliate channel?The affiliate channel has always been something of a proving ground for innovation. This is to some extent naturally so because the CPA model entails less risk for advertisers.What also encourages mobile affiliates into the affiliate channel is that those who are specialising in mobile can come to an affiliate network and get quite easy access to hundreds, potentially thousands, of blue-chip brand advertisers.I’m going to show you three examples of affiliates using mobile technology that take advantage of the trend that favours the money-saving niche.
Nectar is one example of an affiliate that has developed an app that combines both incentive and location-based features. When Nectar launched their app they came to us and said ‘tell us which of your advertisers have mobile enabled tracking because we will give priority to those advertisers’ because, as we have seen with the stats from our network as a whole, Nectar realise that the conversion rates are very strong via their mobile app.
Quidco offer the ability for members to get cashback for going in store via their app. So the user gets a cash incentive for going in store, and in return the job of the advertiser is to keep the customer in store and to transact in store.What’s more, once checked-in the customer can receive further offers that are only available in-store, but accessible via online. Again, a great example of a blended online-offline approach.
Finally, Sccope provides product comparison on mobile devices. You can do a product search in-store, for example, and according to Google 79% of people use their mobile devices to assist with the buying process.Their barcode scanner will compare both pure play and multi-channel retailers, so you have the choice to buy on or offline.Rotating the phone reveals the price history graph for the selected product, to help consumers decide whether they are getting a good price.
Now an example from an advertiser, which actually won Debenhamsan NMA Award for the Best Use of Affiliate Marketing.an NMA Award for the Best Use of Affiliate Marketing.First their objectives. Debenhams traditionally runs 3 voucher campaigns a year and usually these are redeemable at POS. They wanted to be able to track at the individual customer level – to see who has redeemed the voucher – but they also wanted it to be multi-channel to reduce the reliance on offline advertising.Now the execution. They worked with Vouchercloud, a mobile geo-targeted voucher code affiliate. Vouchercloud boasts 1.5m downloads of its app so far; 2.5m vouchers downloaded since launch; and 1.4m redeemed. If a customer was on the high street they would be able to launch the Vouchercloud app and get an exclusive 10% off. This was a single-use code, redeemed by staff at POS. This was then tracked back into Debenhams’ internal database and attributed to the affiliate channel, and to Vouchercloud as the affiliate. So they were able to close the loop so that the redemption was tracked in store, reported back to the Debenhams sales database, and then attributed to the affiliate channel.Now the results. Affiliates drove 43% of total sales in store and online. 57% were redeemed in-store rather than online, so a great way in which online customers can translate to offline. 70% of the new customers the campaign produced were driven through affiliates. Debenhams does not currently have an m-commerce site (this is in development with a plan to release it later this year).
The fact that advertisers very often don’t have a site that is optimised for users transacting on their mobiles is almost certainly the biggest barrier to a transaction being completed. A mobile-ready site is one that has a simplified checkout process, optimised for touchscreen rather than mouse & keyboard, etc. Advertisers are looking to develop these, but at present only a few of our retailers have mobile sites.If advertisers have an m-commerce site and it does not have our tracking on it then it will not track. Hence it is very important for advertisers to put their affiliate network’s tracking on their m-commerce site, otherwise we will not capture mobile sales. Caveat: if an advertiser has a mobile site but the user goes through on an iPad or other tablet it will not necessarily default to the mobile site.Applications are a little different as they tend to not be web based. If an affiliate built an app and the purpose is to send a customer through to a retailer to make a purchase, the application will still need to use the native web browser, and we would be able to track a click that came via that app.But advertiser’s own applications are in effect a walled garden. At the moment there is not really any opportunity for affiliates to be directing traffic to merchant applications as there isn’t a way in from outside the app. All the different phone manufactures use different operating systems (Apple iOS, Android, webos etc) which means there is no standard for linking in to a mobile app. It’s like if there were no web standards and URLs didn’t exist, meaning there was no standard way of sending a person to a web page.
IAB Performance Marketing Seminar - Mobile Marketing in the Affiliate Channel: Trends, Opportunities, Challenges (July 2011)
Mobile Marketing in the Affiliate Channel: Trends, Opportunities and Challenges<br />Owen Hewitson<br />Client Strategist, Affiliate Window & buy.at<br />
Some Context<br />Smartphone penetration in the UK at 33% (source)<br />23% of all time on the web is now via mobile (source)<br />50% start their mobile web experience with a search (source)<br />eBay make a sale every second on mobile (source)<br />One third of UK shoppers used m-commerce last Christmas (source)<br />
Mobile Affiliate Trends<br />Social and location-based models provide the most promising opportunities<br />At present a money saving niche exists within mobile that is gaining momentum<br />One large retailer sees c.90% of mobile sales from incentivised traffic <br />
Affiliate Example: Nectar<br /><ul><li>Combining incentive and location-based features
Members get access to exclusive reward points opportunities only available through the app
Prioritises advertisers with mobile tracking enabled</li></li></ul><li>Affiliate Example: Quidco<br />
Affiliate Example: Sccope<br />Barcode scanner will compare both pure play and multi-channel retailers<br />Rotating the phone reveals price history graph for the selected product<br />Mobile product comparison: 79% of smartphone owners use their phones to search for information on a product (source)<br />
Advertiser Example: Debenhams<br />Multi-channel approach<br />Detailed reporting<br />Increase store footfall and online traffic<br />Reduce reliance on offline<br />Capture email & mobile data<br />Acquire new customers<br />Use unique codes to prevent misuse<br /><ul><li>High volume distribution through affiliates
Challenges<br />Current lack of mobile-optimised advertiser sites<br />Imperative to get affiliate tracking on advertisers’ m-commerce sites<br />Advertisers’ own apps are a ‘walled garden’<br />No standard for linking into a mobile app<br />