Thanks for being hereAnd thanks to the A4U team for having meSome of you know that I’ve been in this industry for a few yearsAnd it’s amazing to me how fun and interesting the space is after 15 yearsRemember that when Affiliate Marketing was inventedThere was no Facebook No TwitterNo Mobile Commerce to speak ofIt has been able to adapt to every sea change in consumer behavior and add value to by helping retailers drive traffic in ways that are aligned with consumer behaviorAt today’s event you’ll hear a lot about thatWhether from Advertisers, Publishers, Networks or retailers themselves this industry is so dynamic and changing that events like these become really important to stay on top of what’s going on.And what you’ll realize throughout the day is that the industry keep growing in a variety of ways
One way to consider growth of this industry is to take a look at how much retailers are spending each year on the channelIn 2012, Rakuten LinkShare did just that in a project with Forrester ConsultingAnd we found that as overall interactive budgets grow, performance marketing is keeping pace.Growing at about 17% yearly through 2016
In fact, Forrester forecasted that spending on the Affiliate Channel will grow faster than even paid searchAnd in light of new investments in social and mobile, advertisers are increasing their performance marketing because IT WORKS!That’s because low-risk, it’s innovative and it’s in line with how today’s consumer shops
This year, we’re doing some additional research.This time we’ll take a look at the value of the Affiliate Channel as it relates to international expansionConducted in 8 countries – the US, UK, Australia, Japan, France, Germany and Brazil - this type of research is a first for the industry and we’re looking forward to sharing the results at our Symposium New York event in June.
Now the topic of growth is very tightly connected to online consumer behaviorAnd, as I mentioned one of the reasons this channel has become so important is because it is a key stop of the path to purchaseIt’s important to consciously think about this during today’s sessions and understand how performance marketing capitalizes on this consumer shopping trends and how you it lets you grow your program be riding the wave of these trendsOr the consumer journey as some people like to call it
Today’s shopper, including myself, is often referred to as “Omni-Channel”That means we’re searching not just for value – a nod to all you coupon and deal publishers out there, but for ideas, selection as well as convenience, speed and an anywhere anytime shopping experienceAs Rakuten says – today shopping is entertainmentAnd as performance marketers - all of us need to understand how we add value to the consumer journey
It’s also important to keep in mind which Omni- Channel shopper you are trying to reachMillennials for example – those shoppers between the ages of 18-29 They will have more spending power than any other generation in historyAnd they much more on mobile and socialSo if you are trying to target that audience – today’s sessions related to mobile commerce and social marketing are particularly relevant for you and will really highlight innovative solutions and thinking
Another key trend you will hear about today is Big DataWhether it’s centralizing all you’re data from different channels into one databaseOr finally figuring out an attribution solution that every marketing department can supportRetailers – and Publishers – are looking at data more holistically than ever beforeBig data solutions - which include data from performance marketing channels – will become standard in the futureAnd it’s all about mining that data for actionable insights
Omni-Channel and big data solutions also mean changes in the marketing departmentGone are the silos of yesterdayCase in point: Saks recently announced that their Senior Marketing Managers will now have “Omni-Channel” in their titles as they take on broad cross-channel responsibilitiesWhat does that mean for Performance Marketers?It means that we can’t think about our business in a silo eitherIt’s up to all of us in this industry – to make Performance Marketing – a key part of the Omni-channel dialogConsider how your programs and campaigns can be part of a larger strategy
The other trends you’ll hear about in various sessions today are things you’ve been hearing about for a whileSocial, Local, Mobile and GlobalThe difference today compared to a few years ago is that these solutions are now a reality yet still in their infancy
Take Social Marketing for example52% of retailers in a recent online survey from digital marketing firm Webmarketing123 said they planned to increase their social media marketing budgets in 2013Social media spending by all marketers in the United States will near $5 billion by 2016, according to Forrester Research Inc.As a whole, the 300 e-retailers in the Social Media 300 will bring in a combined total of $1.6 billion in 2012 sales from visitors arriving on their sites from social networks. Pretty amazing statisticsSocial marketing is present in the channel in wide range of strategies and publisher solutionsSo make sure to make your affiliate marketing part of your overall social to help multiply your marketing efforts
And take local solutionsLocalized marketing solutions are becoming more common and it the Smartphone and consumer behavior that’s driving the innovationNot long ago Wal-mart, for example, viewed online and offline as very separate channelsToday its incredible that 50% of online purchases are fulflled through the storeToday we hearing more about online to offlline or “O-2-O” that bring these channels togetherAnd there are innovative Publishers finding ways to help drive Omni-Traffic to retailers through very localized solutions
And of course Mobile CommerceYou’ll hear a lot about that todaySmartphone and Tablet adoption are driving the creation of new Publisher solutions and new partnerships that drive revenue and commissionsThe great thing about the Performance Marketing channel is that it lets retailers tap into this innovation through Publishers in a low-risk wayRetailers don’t have to do everything themselves
And global is another key trend you’ll be hearing more about today and in the futureAs consumers get more comfortable buying across boarders, Advertisers and Publishers are making investments to take operations worldwideEbay for example announced that 20% of their sales are internationalAnd many of you in this audience today have international plans that are a key part of growing your businessIn responding to this trend for example, at Rakuten LinkShare, last year we launched our services in Australia and have plans to expand further into other countries moving forward.
It wasn’t long ago that events like these were held by a few key players in the industryNow there is more than one – in fact there’s another one going on today not far from hereThe great thing about the attendance level today is that it says the industry wants more education, more networking and more opportunities to create partnershipsAnd I think it’s great that A4U has brought this event here to the US – at the same time some of the US event organizations are going abroadBecause it can only help broaden our perspectiveThe sharing of ideas, experiences and best practices worldwide all serve to create and strengthen relationshipsNow there’s a lot of great content to get today so enough from meI’m a bit biased but I hope you will catch the session tomorrow at 4:30 – with Danny Kourianos from Rakuten MediaFOrge – which is all about looking holistically at the display and affiliate channels to help improve your return on ad spend.But there’s lots more so have a great dayAnd thanks again to the A4U team for letting me kick things off!
At Rakuten LinkShare we like to say that performance marketing can
US Spending on Performance Marketing A commissioned study by Forrester Consulting on behalf of Rakuten LinkShare June, 2012
Affiliate Marketing Spend vs. Other Channels CAGR by Advertising Channel Interactive Marketing 2011-2016 Paid search 12.0% SEO 13.2% Display 20.3% Email 10.3% Social 25.7% Mobile 37.9% Affiliate Marketing 16.6% Total Interactive Marketing 17.3% A commissioned study by Forrester Consulting on behalf of Rakuten LinkShare June, 2012
2013 ResearchPerformance Marketing and International Expansion
Today’s Omni-Channel ShopperPerformance Marketing is a key stop on the path to purchase
Omni-Channel MarketingTargeting Millennials in the US• 90 million people ages 18-29• Also known as “Generation Y”• More spending power than any other generation• Social network dependent• Rely on word of mouth, online reviews
Omni-Channel Marketing, PerformanceMarketing and Big Data• Disruption of traditional shopping channels will accelerate retail technology investments• Centralizing data from every channel including performance marketing• Big data solutions for actionable insights • Blending of offline and online data • Structured and unstructured data • Customer analytics • Predictive analytics • Personalization • Real-time pricing
Case on Point: SAK Fifth AvenueOmni-Channel Marketing Managers• Senior Marketing Managers are now “Omni-Channel” managers with broad cross-channel responsibilitiesOnline Offline alignment• Free shipping from stores• Promotional alignment across channels and devices• Loyalty points alignment