INside Performance Marketing
Behavioural Retargeting & Affiliates - Chalk & Cheese?

Behavioural Retargeting & Affiliates - Chalk & Cheese?

For those wanting a quick 'Behavioural Retargeting 101' lesson, i'd suggest checking out this great flash video by retargeting.com.

Part One

Do you think an Affiliate Programme can benefit from Behavioural Retargeting (BR)?

Matt Bailey

Matt Bailey: I think it is an incredibly effective marketing channel for a brand to engage with. The idea of being able to identify hot prospects who have already interacted with your brand is incredibly powerful. Therefore I believe that it is beneficial for a brand, and if it falls under the affiliate/CPA umbrella then all the better.

James Little

James Little (AffiliateFuture): I do think that the overall concept of BR is good - I'm a massive fan of innovation in general and I do really see this promotional method as a game changer... but I'm still not sure if it's right for the affiliate channel and at the moment I would struggle to even attempt to suggest to clients that it is something that they should do in via the affiliate channel, but at the same time I can see that the alternative is not great – how long before merchants are de-duping based on a PI impression outside of the affiliate channel?

Criteo

Criteo: Personalised retargeting increases the efficiency of all online acquisition channels, be it sponsorship, SEM, SEO or affiliates by reaching (pre qualified) potential customers with a relevant banner based on their individual browsing behaviour. An affiliate’s focus is mainly on new customer acquisition through cold lead generation whereas personalised retargeting is all about converting warm leads. The two are complementary.

Chris Bishop

Chris Bishop (7thingsmedia): Without question; behavioural re-targeting is a fantastic addition to the various other affiliate models which make up a programme, if managed correctly. To think that for any common website 95% of visitors will leave without making a purchase, as a marketer would you like to re-target to that prospect – YES. Would you like to target to that prospect on a performance only basis – YES! It's surely one of, if not the, purist form of direct marketing available.

Within 7thingsmedia, we are further encouraged by the strong results from our clients whom are currently trialling behavioural re-targeting on a CPA only basis.

Hero Grigoraki

Hero Grigoraki (Webgains): Behavioural retargeting addresses the issue of lost traffic and non converting visitors. It helps improve customer engagement, push up conversion rates and increase revenue from the received traffic. Anything that helps the website perform better, in turn helps the affiliate program perform better. Keeping the relationship with a BR provider within the affiliate program ensures the advertiser can control, monitor and evaluate the result of the campaign, taking away the hassle of dealing with yet another provider directly.

The affiliate program however should have certain rules in place as to how the BR provider’s activity will correlate to that of other affiliates. Obviously, click cookies need to be protected and the use of PI cookies should be controlled; otherwise, the affiliate program will be compromised and the advertiser will end up having an affiliate program solely driven by one affiliate.

As an affiliate network, we would prefer the BR campaigns to be part of the affiliate channel – the reason is that we can then control them and monitor their impact on all other affiliates. If a merchant wants to work with a BR company, they will do so directly if their network cannot accommodate for the partnership, which will definitely be detrimental for the affiliates as the deduping might be shady and there will be no transparency of the terms of the partnership.

As networks, we should be encouraging new ways of partnering with providers on a performance basis, and lay the foundations to ensure the partnership is beneficial for all parties involved and existing affiliates are protected.

Zak Edwards

Zak Edwards (Prezzybox): Yes. In essence the vast majority of your visitors who come to the site don't actually convert into purchasers so it makes sense to target these visitors once they have left the site and entice them back to purchase.

Laurent Gibb

Laurent Gibb (myThings): Behavioral Retargeting as an advertising vehicle is uniquely suited to maximize the performance of affiliate programs: By micro targeting users with the offer that is most relevant to them, the likelihood of a conversion increases and more revenues are generated both for the merchant and for the affiliates.

Even when users don’t come back to the advertiser’s site through the behaviorally targeted campaigns it has been proved that this traffic source generates a substantial uplift in users returning though other channels, brand search terms and sales. Aside from playing a performance role in driving sales behavioral retargeting supports and reinforces all other marketing activities so should always be used in parallel, especially in times of additional promotions via other channels to maximize returns.

The new affiliate campaign management functionality, available with myThings, is making effective campaign management a reality for merchants. If in the past, merchants may have been less open to personalised retargeting as they were not able to measure the return accurately against their other channels, the same applies for affiliates who did not fully understand the model as some felt they may not always get their fair share of credit for the sale. New myThings campaign management functionality through affiliate programs incorporates cookie hierarchy to ensure that all that ‘participated’ in the sale earn their fair share of credit.

As result of the new myThings campaign management and cookie hierarchy functionality, which has been developed in conjunction with affiliate networks, personalised retargeting is becoming a must have acquisition channel to support all other activities. Affiliates are also welcoming myThings’ transparent model more and more due to the fact that we are engaging with them and merchants to make sure well all work in a complementary way.

Sam Musk

Sam Musk (Maxinutrition): We were initially cautious of how retargeting would affect our other channels and affiliate partners and it is something you really need to understand and be fully behind before taking your first steps. Retargeting is extending our display campaigns and brand messages, delivering targeted traffic back to the site and providing a source of customer acquisition. High quality media purchased for retargeting can help to extend the range of your affiliate channel and provide real traffic and conversions to benefit your performance programme.

Kevin Edwards

Kevin Edwards (Affiliate Window): Behavioural retargeting is in essence CPM evolved which makes it an intriguing prospect for the channel. Previous attempts to run CPM activity to a CPA (without PI) haven't produced significant results but more contextual CPM activity makes this a possibility. The clincher is whether you can overcome reservations you may have about post impression cookies. It has value and if done intelligently can add to the branding that has always been the 'free' part of affiliate marketing.

There are obvious issues that advertisers, networks, affiliates and indeed the industry as a whole should be addressing. I'm really pleased the Affiliate Marketing Council has done so this year as it's enabled us to have a far deeper knowledge of the activity than any of us involved had six months ago. It's actually made us recognise that there isn't necessarily a perfect solution to working with BR in the affiliate channel but that we definitely need some points of reference.

What do you think advertisers should be aware of when setting up BR?

Matt Bailey

Matt Bailey: As with any marketing channel, they should be secure that they understand the influence that this kind of activity has on all of their other marketing channels. Once they establish how retargeted traffic fits in to their customer journeys, then they are in a position to be secure in the knowledge that it is incremental and that they are paying the right amount for it.

James Little

James Little (AffiliateFuture): They need to be careful with who they use and they need to think of the customer, for example, I've seen some merchants who will follow the user with a product that they were looking at for weeks, if not months later.

Also - as a customer, I'd be much more likely to convert if the re-targeting was giving me a further reason to covert - free delivery or something along these lines.

They most important thing that advertisers should be aware of is that they don’t just start paying lots of money for custom they would have got in the first place via the PI aspect.

Criteo

Criteo: Volume and Scale are the key drivers to a successful retargeting program. A personalised retargeting program should drive a substantial share of the advertisers’ online sales and work as an ongoing conversion channel. Advertisers should also look for flexibility and total campaign control. For example are they able to adjust their CPC for each customised product category as they can with their search campaign? Criteo recently launched their performance optimisation platform that allows this level of flexibility which allows a single banner to have individual CPCs assigned to each product displayed – a true industry first.

Advertisers can also create differentiated campaigns (with specific CPCs) based on where customers are in the purchase funnel: tepid prospects, hot prospects, first time buyers, repeat buyers.

CPCs and ad serving priorities can be set by these user segments.

Chris Bishop

Chris Bishop (7thingsmedia): As we all know affiliate marketing is a complex landscape that needs to be managed correctly to get the best results. Behavioural re-targeting is just another model within a performance-based umbrella – just how Paid Search affiliates are different to reward publishers and have different needs, desires and terms.

Hero Grigoraki

Hero Grigoraki (Webgains): BR does not resolve the fundamental issues of why customers leave the site; it can help address them provided there is information on the reasons. Unless there is a good understanding of what drove them away (be that related to the website design/navigation, product information, hidden costs, delivery options etc) or simply the fact the consumer tends to shop around a lot, the advertiser won’t address those needs correctly and won’t see a good ROI from the BR campaign.

Setting correct KPIs and targets is imperative for the partnership to be beneficial – as is the correct setup of commercials. Is the BR activity of the same value as other partners’? Should the CPA rate, cookie duration etc be the same? Advertisers must remember that they will not be receiving new pairs of eyes but rather getting existing traffic to come back to them. The affiliate networks can provide the needed advice and guidance to merchants looking to partner with BR companies.

Furthermore, the use of PI cookies is a thorn in the partnership – it’s not always the best tool to use, so merchants need to only employ it when they feel it’s definitely needed.

In addition, for merchants who dedupe against multiple channels, the question arises of how the BR activity will fit in their deduplication process – the last referrer method cannot be applied when dealing with PI cookies.

Sam Musk

Sam Musk (Maxinutrition): Who else is doing this in your market, what are they doing right or wrong and what attribution value do you put on this as part of a customer's journey from first touch point through to conversion. Think about timescales too, if you were in their shoes would you like to be reminded about a shiny gadget you looked at a long while ago or a clothes item that may not be in fashion now, and does that impact on your brand? It is worth talking to your affiliate network too about their views as it may not necessarily be right for every advertiser.

Laurent Gibb

Laurent Gibb (myThings): Advertisers running BR campaigns on publisher media (off network not on affiliate media) should be aware of attribution issues and manage their sales deduplication in a fair manner according to industry standards (currently "last click wins").

Most advertisers use affiliate networks and analytics systems to deduplicate sales for their campaigns. myThings, like other affiliate networks reports impressions and clicks to these systems. When an advertiser works with different channels (or networks) myThings provides the advertiser with a very simple technical solution to automatically deduplicate channels.

When advertisers run personalised retargeting on a different business model such as CPC and in isolation (outside of the affiliate program and not deduplicating sales efficiently due to lack of good analytics) they may find that the real CPC cost is twice to three times as much. By working on a CPA it is more manual and does involve more of a partnership approach and a few iterations along the way in terms of optimization of campaigns but ultimately it’s the model that is most in the advertiser’s best interest as they will only ever pay for a sale.

The last thing advertisers need to be aware of are personalised retargeting providers who due to the fact they are geared to drive clicks do not cap impressions so users feel overwhelmed by the amount of banners they see resulting in brand damage for advertisers and non converting clicks.

Zak Edwards

Zak Edwards (Prezzybox): Our stats prove that a number of visitors visit the site in the day, then return to purchase on the evening. There is a possibility therefore that you could be paying commission out where you don't have to.

Kevin Edwards

Kevin Edwards (Affiliate Window): There are practical considerations that need to be taken into account. In order to work with BR it may be necessary to implement additional tracking, something your network or BR company can advise on. You should also ensure the appropriate cookie hierarchies are in place to safeguard your existing affiliate traffic and also check any third party tracking solutions or analytics packages can track the activity and apply de-duplication rules where appropriate.

It's vital to understand how BR companies operate and what offers and products will be featured and how you can work to optimise the content and therefore conversion rates. Focusing on this could have a direct impact on the commission rates you have to pay. Given BR has a hybrid brand/performance role to play commission rates may also be something that may differ from other affiliate activity. It's safe to say advertisers shouldn't rush into working with BR companies without fully appreciating all the ramifications from introducing this potential stream of revenue.

What are your thoughts on Post-Impression (PI) Cookies?

James Little

James Little (AffiliateFuture): As a network we are not going to go anywhere near them as it stands - in my mind this is by far the biggest problem that the affiliate market has with BR and to be completely honest, I am quite disappointed that networks have taken the route of going back 10 years and doing PI cookies.

I do appreciate that some networks have put in a lot of development to ensure that these do not override existing cookies and various other measures in place, but I have a feeling that the PI issue will cause some big, big fallouts if networks are not careful.

Looking at some of our campaigns we have an average lapse time of around 3-4 hours, or in travel sometimes a lot longer. From some of the publishers who offer BR that we’ve talked to they want PI’s stretching from 4 – 48 hours. Advertisers moan that Voucher sites cannibalize their existing traffic but in my mind this is a hell of a lot worse. I’m not being negative but I would suggest that advertisers think long and hard about doing this.

Zak Edwards

Zak Edwards (Prezzybox): I'm not overly convinced at the validity of a PI cookie. With a standard cookie, there is at least some validation that the user has actively engaged with that call to action (they have clicked on a link/banner etc) whereas they may not have seen the banner which instigates the PI cookie.

Chris Bishop

Chris Bishop (7thingsmedia): I know there has been a few grumbles on the forum on this but to my knowledge, the publishers have built a business case for post impression cookies to which the advertisers' have understood and signed off.

I feel the issue may be both a lack of understanding on this relatively new model in the UK. PI tracking shouldn't overwrite standard click cookies, so in that respect the traditional affiliate model is protected.

Hero Grigoraki

Hero Grigoraki (Webgains): PI cookies can definitely be beneficial if used in a controlled, moderated and transparent way. Widespread and uncontrolled use by all affiliates and for all activity will lead to misuse and cookie stuffing, but when used correctly and under tight guidelines, they can provide real value and incremental sales.

As networks, it’s our duty to ensure that PI cookies are used correctly and help merchants make the most of the exciting opportunities offered by new types of affiliates. Provided the affiliate can substantiate the need for PI cookies and showcase how they help deliver the incremental sales, PI cookies then become yet another tool that can be used within a campaign and should not be feared or dismissed, by the merchant or even the network.

Laurent Gibb

Laurent Gibb (myThings): myThings believe that in the long run, CPA with PI will become the dominant pricing model in the online advertising industry, combined with a multi-attribution model.

Using some form of Post Impression attribution has already become the standard on the continent (as is the case in France where myThings also operates). These same standardized post click and post view methods have been used for years by all of the large publishers.

Misunderstanding and confusion may sometime arises due to the fact that ecommerce advertisers have not traditionally used display and that this type of technology it new it is still not fully understood. We are finding that many advertisers still don’t understand how each or their traffic sources work in a multichannel environment. myThings tracks conversions via affiliate networks, and therefore our PI does NOT overwrites affiliates clicks.

Matt Bailey

Matt Bailey: I see no reason why payment on a Post Impression basis should not be a part of the affiliate mix. With the advances that have occurred in the last few years in deduplication technology, I find it fairly easy to make a compelling case that says that if a highly targeted publisher displays an advert and, in a short time window and without the consumer having interacted with or been served any other advertising for that brand, they go on to make a purchase, that the publisher has played a part in that and therefore deserves to be rewarded. I don't think it should be rolled out across all affiliate types, but there are some where I feel it could be warranted.

Kevin Edwards

Kevin Edwards (Affiliate Window): They sit uneasily with me. I've seen them massively abused in the past on affiliate programmes but realistically those days have gone and a repeat of such abuses would never be tolerated by an ethical network or its merchants.

Six months ago I would have vetoed their use but I'm pragmatic and the agenda was set by BR companies who expressed a wish to work with networks to a CPA reward. Having discussed at length with other networks and interested parties via the Affiliate Council it was clear that there were reservations. However it was also agreed we would rather have control of PI cookies than have potentially devastating cookie overwriting policies put in place by advertisers that we had no control over by not working with BR companies.

Networks had the opportunity to set the terms and conditions and it was clear that a definite cookie hierarchy could create the protection and assurances affiliates and advertisers should be insisting on. In fact I'd go as far as to say I'd be more concerned if networks weren't making an effort to work with BR in order to take control of appropriate cookie overwriting procedures. Is it fair that some affiliates will potentially have PI when others don't? At the moment no it's not but the situation is more complex than that and without the wider picture the issues can be distorted.

In a sense the issue isn't about whether PI cookies are fair or appropriate for the channel, more accepting that the online space is changing and technologies and platforms are merging and we need to be thinking more laterally; affiliate marketing doesn't exist in a vacuum.

To Be Continued...

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Chris Johnson

Chris Johnson

Content Director for PerformanceIN. Based in Bristol & London.

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