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Value Attribution and the Future of Affiliate Marketing

Value Attribution and the Future of Affiliate Marketing

Having spent last Tuesday and Wednesday at the a4uexpo stand at the Online Marketing Show, I was in attendance at the two 'affiliate' sessions involving two UK Affiliate Networks, Affiliate Window and dgm.

At first glance, the Online Marketing Show (OMS) was awash with many intruiged marketers. I was surprised whilst chatting to a few attendees how many still use paper and letterboxes to conduct their main advertising campaigns, and that they were at the OMS to see what 'this online thing was all about!'. Maybe it's just me, spending too much time attached to the internet...

Other companies in attendance from the Affiliate sphere were Digital Window, dgm, Stream:20, Existem Affiliate Management and Clash Media.

Our stand itself was attracting attention, not because I was there, but due to the Racing Car Game that was gracing the a4uexpo stand. Usually situated in our office, we we're giving away a free pass to the London expo for the fastest lap time.

The first affiliate session of the day was entitled 'The Future of Affiliate Marketing'. Moderated by Kevin Edwards (Awin / IAB AMC Chairman) this session included a panel of Merchant Naomi Brown from Firebox.com, Agency: Chris Bishop from 7thingsmedia, Affiliate: Mark MacDonald from Skimlinks & Network: Greg Endean from Affiliate Window.

As this was a general Online Marketing event, Kevin said the session would be very general, and gave some brief points about how around £300 million pounds in fees & commissions were paid every year and also that the main challenges come from its own complexities.

Talking about affiliate marketing generally, Mark agreed on the assumption that we're complexing the affiliate sector too much, and that it is still more than ever a wealth of opportunity, and looking to the future Naomi believes that advertisers will start looking beyond the standalone advertising by rewarding affiliates for doing 'something different' than your average.

I'll list the other topics of the session below:

Self Regulation of Feeds & API's

Greg: Merchants need to "buy-in" to feed regulation, we need to be encouraging merchants to work with their 'strongest' affiliates.

De-duplication

Chris: You can't ignore the wider channels, but key data is needed to

Naomi: You can't see affiliates as one standalone channel, all channels will link into each other - if you're not looking at de-duplication; you need to.

Multi Attribution Solutions?

Mark: It's currently a Bottleneck. Multi-attribution is not the right term, we should be talking about it as 'Value Attribution'

Chris: Ultimately finding a model that brings better customers is the answer, not forgetting technology and transparency as other 'musts'.

Greg: A solution will not be sought until there is enough data being shared between all areas.

Kevin: The data is available, web properties and systems assume plenty of data, it just needs to be shared. Ultimately, Merchants need to close the loop and return the data needed, including average order values across all channels. This would help in setting intelligent commissions and would be a step forward.

Naomi: Activity is currently too focussed on getting the last click. Would open up clever publishers.

Whilst a lot of talk was about nuturing relationships, improving and innovating advanced affiliate programs, I do feel the session lacked any advice for new or lower level affiliates. Surely if we're talking about the future of Affiliate Marketing we need to consider the 'new batch of affiliates' that will be moving into the sector to start forming businesses.

Beyond the last click.

The final session was entitled 'Beyond the last click' conducted by Adam Peck at dgm. He used data from 12 clients across multiple verticals to create this presentation.

The aim was to create greater awareness of the attribution model, of which I think was conducted well. It was a very 'bread and butter' explanation of multi-channel attribution, but one that was clearly defined, well explained and well set out.

The evolution of Affiliate Marketing; after 1st click commission to last referrer, increasingly savvy internet users has created a need for an attribution model, as these users are now touching-points across multiple channels. It was also explained that a recent Orange study estimated 25% sales are cannabalised by voucher code affiliates.

Concerning dgm's Affiliate base, 41% are content based, 21% PPC, 11% SEO, 6% Loyalty and only 4% Voucher Codes (of which 25% are supposedly cannabalising conversions!). As in the first session, data then became a part of the conversation, with Adam suggesting that 3-6 months of data was needed to decide on any attribution system. He also talked about different sectors and whether there was a need to bring in an attribution model dependant on sector. In a study of Electrical v Clothing retailers, there was only one click 90% of the time for the clothing retailer, but this was only 66% for the Electrical retailer.

Should we also be thinking about Average Order Value and attribution as well?

Adam finished with a brief talk on 'Value', in that it would need to be defined by the Merchant, as they currently only have affiliate data. He also said that Networks are already equipped to handle an attribution model, when will we see the first high level merchant implementing this?

Summary

It seems that even these two sessions have been some high similarities when talking about Data and Value, but it seems as though in order to get this data we'd not only need the Merchants to supply us with more, but we'd also need other channels to supply data as well...

The debate's continue!

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Chris Johnson

Chris Johnson

Content Director for PerformanceIN. Based in Bristol & London.

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