A look on trends in tracking technology. The only constant in performance-marketing is change. As the performance marketing industry evolves, affiliates and advertisers have to contend with expedited changes in all facets of their business. Attribution expectations, new monetisation models, the KPI’s advertisers are measuring and more will be covered.
Speech by Sarah Bundy | Founder & CEO, All Inclusive Marketing
Sarah Bundy Speech Transcript
Hey everybody, how’s it going? All right.
You guys are doing awesome. I know it’s late in the day.
How many of you guys are affiliates in the crowd? Raise of hands, please.
How many people are selling on an e-commerce store or would consider themselves some kind of a retailer? (See also Mohamed Ali Aguel’s Diversification: Leveraging your Affiliate Skills into E-commerce)
How many people are with a CPA Network some kind of a sub-network or network?
So today we’re going to talk about essential international growth trends and affiliate marketing.
Today I want to set the stage and give you guys some background. A little bit of a foundation to help you spring really strongly into 2018.
And before we jump in, before I give you some meat and some action items to execute on, I’ll give you a little bit of background on myself.
Background: Sara Bundy
I’ve been in the affiliate marketing space since 2004. So I’m going into my 14th year.
I own a digital marketing company, a performance-based affiliate management company called All-Inclusive Marketing. We help brands, mostly e-commerce, retail, travel, hospitality type of brands reach, engage, and convert their buyers online.
We can then extend that to our partners and our publishers and our affiliates and we help them reach engage and convert their buyers online as well.
And help them scale their businesses on a performance-based model.
We had the honour last year, we were recognised in the profit 500, in the top 100 female entrepreneurs in Canada, as well as the top 100 fastest growing companies in the country.
And as of last month, we’re listed in the top 40 under 40 in business in Vancouver as well.
So my hope is that some of the information that I can provide with you today and the insights and the experience that I’ve had over the last decade will be useful for you as you move into the New Year.
The World Is Changing
Let’s take a look at the world.
It is changing at exponential rates. The way people are buying is more global than ever. The cross-device opportunities, the immediacy, marketplaces coming into the market, such as Amazon, eBay, Alibaba, and AliExpress are making things so seamless and available at people’s fingertips on the spot.
So the question is, as an affiliate and as an advertiser, how are you competing?
How are you gonna continue to compete, how are you gonna continue to grow your audience?
How are you going to be able to capture new customer acquisitions and consume, and build your audience and your value proposition?
This is a billion-dollar industry. And I’m going to tell you really quickly, I’m sorry to move off stage here for a second.
Three Multi-billion Dollar Industries
There are 3 markets that by themselves are encompassing billions of dollars of transactions on an e-commerce scale.
The Japanese market, the US market, and the UK market individually are multi-billion dollar industries.
On a global scale, the year-over-year spend is expediting in double digits in every populated continent of the world.
So the question is,
“How are we going to compete?”
Step one is really to better understand what are the main KPIs. That retailers, advertisers, people who are selling a product as well as affiliates, are all struggling to measure.
And to focus on with number one being incremental revenue.
So revenue is going to be really key. But really the incrementality of revenue is what people are focused on.
That right now is being measured by new customer acquisitions, advancements and capturing new market share in niche markets, especially in an international and global growth perspective increases to things like average order value, improvements to your conversion rate, all of these particular types of KPIs are actually driving that incremental revenue that advertisers and publishers are both valuing a lot.
The other side of it they’re literally looking at from a KPI perspective is profitability.
So that profitability right now is being measured by ROI, return on advertising spend, and also a really strong focus on retaining those buyers.
It is very expensive to find, and engage, and reach, and convert, and capture these new buyers.
So once you get them, how are you retaining them?
Recently, I’m gonna give you a couple of examples of leaders in the US market and actually the Canadian and the Chinese market. These are individually affiliates who have built out substantial businesses that are selling for multiples of millions of dollars a year and being acquired even into the billions.
I’m gonna show you how they do that.
How Are Companies Competing
So here are the examples.
And this is how the leading publishers, the leading affiliates are competing on an international scale.
These are the types of things that are trending.
And I keep hearing at this show reoccurring themes as to building communities, social influence or marketing, Facebook advertising groups. Even e-commerce itself, being able to create your own store and drop shipping.
So a couple of examples here we’ve got Ebates in the United States.
Who’s heard of Ebates? Okay.
Ebates recently sold, I guess in 2014, sold to Rakatan for just over a billion dollars.
They work exclusively on a performance marketing basis. They do have an introduction to placements at a premium, where you can play up front.
But one of the values that they specifically have, is that they capture and own their audience. They are a cash back site, they offer coupons and deals and then you get a cash back for purchasing through them.
They offer and make sure that they put out the best content, the best deals and offers that their user experience is completely seamless, both in their mobile experience and on their web version of their site.
They make sure that they have a strong brand, the personalisation is strong. They know everything about their consumers.
There are different ways to do this too.
So if we’re looking at 55Shaitao, they’re looking at more of a visual approach or video approach on a product basis. Again, personalised to the audience that’s there.
And they’re building up a community, and they’re building up and collecting data on a purchase, a consumer basis.
Then they’re pushing you out those offers and feeds. And testing these things and generating billions of dollars in sales.
Quebecor is an example of a different type of partner. These guys are an affiliate in Canada.
They own all of the leading media publications across the country. And their purpose was to actually own the entire French market, which they have accomplished.
And it’s very focused on editorial newspapers, TV, radio. They have now expanded across Canada into the English market.
So they’re an example of a leading content public publisher.
All three of those guys have done all of these things incredibly well. They are feeding the best of class content, best-in-class deals and offers, best of class experience through different mobile and online touch points. And have claimed and owned, position themselves as a market leader to a particular type of audience or vertical.
So I want to give you an example of the Wire Cutter.
The Wire Cutter is a company that is, what we would consider, a content affiliate in the United States.
They recently sold to the New York Times for 30 million dollars. And they’re a publisher, so they’re an affiliate, 30 million dollars they were acquired.
The way that these guys have actually built out their community in their trust, is by featuring and reviewing and trying to break apart products against each other.
So in this example, they were reviewing the best action camera. They have hundreds of guys who will get sent a free product.
They take it into scenarios, they go surfing, they go snowboarding, they take their kids out, and they take four dog walks on their skateboards. And they experience it in real time.
Then, they talk about the features, the benefits, what they liked, what they didn’t like about it. They use their own original photography in it. And they write about a 2,000-word article.
So they’re ranking really well in search engines, they push this out in social channels. And interestingly enough, even though these guys were content affiliates, they rank really well.
They’re considered a top funnel type of partner, which a lot of advertisers going back to the main KPIs of driving new customer acquisition.
And incrementality, there’s a lot of value to this particular type of partner.
Content Publishers On Coupon And Deals
But we’re starting to see that even content publishers are starting to focus more on coupon and deals. They have a sales section.
On the flip side, you’ve got coupon affiliates and loyalty affiliates cashback guys who are starting to try and retain their buyers and acquire new customers by switching sides and focusing more on the content development in the social channel engagement.
So we’re seeing as we’re trending, the merger of different types of publishers because everybody is trying to acquire new customers.
Everybody is trying to regain market share. And everyone is trying to retain their buyers.
But these are examples of guys who’ve done it really well.
So, on the advertiser side of the business. If you’re a big brand, let’s say you’re the Gap or let’s say you’re Nike.
What’s trending right now across the world is the divergence and the need for brands to move away from the reliance on coupon and loyalty publishers, which right now in the United States generate over 90% or I should say, are tracked 90% of the transactions back to that type of partner.
And that’s normal. That’s the sort of what we’re consistently seeing across the board.
And what they want to see, what these big brands are trying to move towards is a diversified portfolio that looks more like this where they can have relationships with key bloggers and social influencers and magazines.
Like the examples that I gave you there with a New York Times, the Wire Cutter, Quebecers, and all the media publications, offline, pay per call actually ends up being part of that as well,
You literally can put a phone number on the side of a car and drive it around town. And have that be tracked back to a particular partner
Monetisation And Tracking Method
We’ll talk about some monetisation and tracking methods in a second here.
But this is where the industry needs to go, the demand and need of the advertisers.
And as an affiliate, this is where a lot of the value is that you can bring to the table.
Because if you can develop these communities, if you understand how to integrate API’s, if you understand how to do personalisation in your content, if you own an audience and you’re building at a really strong community, you are in high demand and you have greater negotiating power as a publisher because you are now considered a diversified top of funnel, new customer acquisition strategy for an advertiser in a brand.
So these guys are gonna be diversified. This is a real-life example of one of the clients that we manage.
What they’re diversified portfolio looks like. With the 39% actually being content, which then a lot of the advertisers and you guys as publishers can break down and make sure that you’re focused on these different verticals such as fashion or beauty or lifestyle, business.
Perhaps, you can do it based on promotions or time of year or seasons. Maybe it’s back to school, maybe it’s Valentine’s Day promotion, maybe it’s Black Friday, Cyber Monday. And you can tag these things and plan your content accordingly.
Make sure that if you’re doing this, you’re always tying it back to the main KPIs, revenue, profitability, new customer acquisitions. Buyer retention, which encompasses the frequency of purchase and extended lifetime value.
Attribution And Click-to-Consume Insights
All right, so who has ever seen this before? Anybody? Okay.
Who’s this new to.
All right so this is an example of a click to consume path of a real purchaser, a real consumer.
This is indicative of a different type of consumer.
So attribution basically is referencing. If somebody’s gonna purchase something, how do we attribute that sale? Which marketing channels do we attribute that sale too?
And if you have an affiliate marketing program and you’re working with different types of affiliates, which affiliate do we attribute the different touch points of that transaction too.
So technologies today, a lot of the affiliate networks are starting to provide transparency into the click-to-consume paths of buyers, which are helping advertisers make smarter decisions about how to spend their budget.
What types of partnerships are the highest value? How to even negotiate or give credit to different particular types of partners?
In this example, if you look on the far left, you’ll notice that this particular buyer, 49 days, if you look over here 49 days before they purchased.
With the purchase being the sale over here in black.
Last Click Model Attribution
In this model, this is an example of a last click model attribution.
This is still what’s normal across the globe. Last click attribution modeling is still the norm.
But what we’re seeing trending is that a lot of the advertisers starting to test different attribution models.
They’re trying to see if the first click makes more sense, where the affiliate who actually hit that first touch point or was the first publisher to actually contribute to the transaction should be getting the commission instead of the last one that converted it.
So in this example, the last affiliate which was RetailMeNot, Whaleshark Media. This was a coupon buyer. They went they got hit by email marketing campaigns, they did some searches in Google with some keywords and read some content.
They went directly to the site but throughout their purchase, they kept going back to RetailMeNot, they kept going back to whale shark media.
This indicates that this particular type of buyer was looking for a coupon almost every single time that they were engaging with this particular transaction.
So if I’m an advertiser and you’re an affiliate, I would want to know which type of attribution you have set up. Are you crediting first-click, are you crediting last-click, are you doing commission splitting?
Does everybody get credited for it? Do I have to share that Commission? Are you actually crediting last to cart, which is actually the affiliate who got the products into the shopping cart first?
Because if that customer is in the shopping cart and then they leave to go find a coupon code, they click around whether they found a coupon code or not.
If that was based on the last click model, wherever they clicked around, that guy would get credit for the sale and you would not, even though you got it into the shopping cart.
So you’d want to find out what’s working? You know, if you’re working with, particular types of partners, what kind of attribution model do they have set up?
What are the KPIs that are going to be most important to them?
If they’re tracking new customer acquisitions, they put or you’re a social influencer, your content affiliate, you might want and ask for first click attribution to be set up or some kind of a commission splitting.
What we’re also seeing trending, especially going into 2018 is the really strong importance on understanding omnichannel, online, offline, multi-device type of tracking.
And for that to take place, the tracking actually has to be set up in the correct way.
You need to be able to have, whether it’s an exclusive code or some kind of it’s a tag management or a URL or even through the affiliate networks that you’re working with, all these different touch points to understand that click to consume path.
So because my background is more on the e-commerce side, I know that there’s you know, conversations, a lot of people who are talking about CPIs and different types of CPI’s and that’s all good.
In this particular example though, we’re going to talk about e-commerce.
And what we typically see in this space, again, thinking about billion dollar industry, billion dollars in the United States, billions of dollars in Japan, billions of dollars in the UK, a transaction and acquisition of one affiliate for over a billion dollars by Racketan.
They’re looking at different monetization models like this. CPA flat dollar payout.
More commonly, we’re seeing a percentage of revenue share. Ad some people might say and a lot of affiliates here, you know, as I’ve been listening well, “Why would I, why would I earn 8% on a $50 product? Like, I’d have to sell a whole lot of those in order to earn any money.”
But the deal is that the growth weight of people purchasing online is expediting so quickly.
And the direction, if you’re able to build a community and the volume is there and the demand is there and you can own that audience, you’re building up a very sustainable high-value business, where you not only earn the percentage of sale, but you actually have an opportunity to be acquired, or acquire in the future as well.
So CPA, flat payouts, revenue as a percentage of the sale, a lot of the social influencers are still charging flat payments or if you want to have a premium placement with one of these larger affiliates, they’ll typically send a media kit for placement opportunities.
In which case, you have an opportunity to negotiate a lower rate with a higher commission payout for a longer earning-opportunity as publisher.
We are seeing more hybrid model types of interactions and negotiations taking place. And in some instances, we’re also seeing a reverse engineering of what an affiliate would have been paid out if they’re in specific areas of the United States.
So for example, if you are marketing to the US and there are US buyers and you were promoting a US-based advertiser, you need to be familiar with what’s what called what is called Nexus tax.
The advertiser would be required to pay Nexus tax if you are promoting on a performance basis to buyers in those states.
So if you switch to a CPC model instead, which a lot of the technologies are able to track, then they are not at risk of having to pay that Nexus tax. In which case they can still work with you within those states.
This is just sort of what’s trending right now when it comes to different monetization models in e-commerce retail, omnichannel, and travel hospitality.
All right, so I’ve got a couple of minutes left.
Trends In Tracking Technology
I’m gonna power through some of the trends in tracking technologies.
Attribution, we talked about.
Different types of click-to-consume and crediting logic, first click, last click, last to cart, commission splitting, omnichannel, multi-device.
We are seeing not only an influx of tools and technology integrations available in order to engage more social influencers but also different types of ways to reach, engage and convert them and their audiences.
And really empower them to convert in the various channels, including API integrations that actually are like little widgets where people can see sort of where or what you’ve looked at in the past, where you’re located, feed you specific offers that might be in a different currency of choice.
It’s very smart, automated, marketing using API integrations.
The mobile web and app tracking that we talked about, the one piece that I would suggest if you are an e-commerce store or retailer looking to launch an affiliate program, or you’re an affiliate that’s promoting mobile, talk to your guys, talk to the people that you’re working with.
And make sure that their mobile transactions are tracking so you get credited properly.
Three Types Of Mobile Types Of Tracking
Because there are three types of mobile types of tracking.
There’s mobile web, which would be like a Shopify site, which then has a mobile-friendly version of it, which would track.
There’s mobile app tracking, where you can track within the app or the app download. That’s a separate type of tracking.
And then, there’s m-commerce, which we’re starting to see more frequently. This is what’s trending in the industry right now.
A lot of the advertisers are trying to give a better user experience on mobile so they’re starting to engage mobile e-commerce stores, such as Mobify, which is it integrates, it looks the same but it’s a different platform.
And they’re not setting up affiliate tracking correctly on those, the pixels not being placed.
So if you were promoting mobile ads or mobile web, talk to your guys, make sure that tracking is in place because you want to make sure that you’re getting credit for the sale.
And if you’re an advertiser, make sure you place the pixel, so that you’re crediting your partners properly.
Trends as translation services and currency capabilities.
We’re seeing a lot more in hearing a lot more about affiliate networks and CPA networks and sub-networks doing and taking care of translation services or the automation of currency PO’s, which can actually take place next day and directly into your bank account.
So that’s a trend that we’re seeing.
And also more granular data insights that are on a transaction level, on a consumer level, on a product level so that people can really optimise the margins and the profitability of these campaigns. Again, tied back to the KPIs.
So I’m gonna leave you with a couple next steps.
And then I’m gonna open up the floor to some questions while the team here actually sets up for the next group.
But last few things, so make sure you understand it, leverage all of your ticket technology capabilities.
Make sure that you look at the data and optimise not only the types of buyers that you have, but look at the margins.
Look at your data.
Understand the technology capabilities.
Use what you can to automate.
Because a lot of the technologies are actually really robust now and can provide you with automation capabilities to help you scale further into different types of markets.
If you’re in a publisher make sure you own your niche.
Make Your Own Niche
Choose a place for you can be the leader, where you can capture the audience. You can own the community, you can own the consumer data.
That’s where a lot of the value gets built out, that’s where you have a lot more negotiating power.
And that’s where you can actually customise a lot of the offers, more to help with things like AOV, higher conversion, new customer acquisitions, incremental revenue growth.
When you do your targeting, you want to make sure that you’re doing targeting on a regional level.
Consider the consumer behaviours, we’ve been to some amazing sessions about the psychology of how people buy based on different personality traits, based on different demographics, likes, dislikes, things like that.
Make sure you’re considering cross-device. You ask the questions about tracking with those. And also cross-channel.
Whatever you can do to understand the different touch points in our attribution model, the clicked consume path.
Make sure you focus and measure your main KPIs, which we talked about both in the beginning in here again.
And use your newfound power and knowledge in all of this to continue to provide value not only to your audience but also if you’re a publisher working with an advertiser, work with them as a partnership.
Communicate the things that you’re consistently doing to continue to grow your value.
And it will give you some more negotiating power, where you can earn more money and have a more close relationship with the advertisers who have wiggle room for partners, who have that capability and want to continue to stretch with you.
So that’s it. If you guys have any questions.
Thank you, thank you.
If you guys have any questions I’ll take two minutes, right now and just answer a couple of questions.