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The True Value-Add in Affiliate Marketing for Advertisers.

The True Value-Add in Affiliate Marketing for Advertisers.

Sat in JFK's departure lounge, I finally had some time to reflect on a busy and surprising few days in New York for Rakuten LinkShare's Symposium. The first one I’d been to outside of the UK, where the content and discussions are notably at the top-end of industry thought-leadership. With A4u committed to providing insight into the channel the Symposium did not disappoint, and we're looking forward to broadening our reach with continued coverage of the US market.

I was impressed by LinkShare's spread of advertisers who were keen to discuss areas surrounding attribution, online to offline convergence, managing coupon affiliate strategies and also improving other affiliate revenues. Needless to say there were a number of large and well-known advertisers in attendance including Macy's, Saks Fifth Avenue, ASOS, AT&T; and, plus the recent arrival of Arcadia Group from the UK / EU shores.

Opening Remarks on Rakuten’s Global Shift to eCommerce

Following recent announcements of a global shift for Rakuten to raise awareness of the brand and drive its eCommerce platforms, this year's opening remarks were delivered by Hiroshi Mikitani, Founder & CEO of Rakuten.

After hearing about the history of Rakuten and the objectives of the event itself, one important point I felt that Mikitani mentioned was that in order to continue developing this industry as a respected and attractive channel, adding a corporate culture to elements of your business will become critical to progress. Something that is steeped in irony, as the channel was born out of entrepreneurs and "bedroom" affiliates, but having seen the industry grow over the last 5-6 years and attract wider digital eyes we feel it's without doubt an important element of channel development for everyone involved.

Following Rakuten's acquisition of digital brands including, LinkShare and most recently, the Spanish streaming and VOD business, Mikitani was unclouded in Rakuten's mission to become the Worlds number one internet service company, stating that "eCommerce will become the global channel for Rakuten. These recent acquisitions are to fuel the extension of our digital goods eco-system."

LinkShare Innovation & Growth

Yaz Iida, President and CEO of LinkShare, then took to the stage to unveil news that they had just completed a new round of rigorous testing on mobile devices that ensured mobile tracking is enabled on advertiser websites. This comprehensive testing and validation of its tracking technology assures advertisers and publishers that they'll be credited for mobile transactions on a variety of devices, including Apple iOS, Android and Blackberry.

Successful US advertiser examples now include and Sierra Trading Post, as LinkShare joins a number of other networks who have spent some significant investment ensuring affiliates are renumerated for the rapid increase in mobile traffic.

Iida then discussed LinkShare's global affiliate marketing presence having set up operations in the US, Canada, UK and Japan, with Southern America and Australia soon to launch. LinkShare aren't the only network launching in the South American region, with Zanox and TradeDoubler having also recently opened offices to service this fast-growing emerging market.

Value of Affiliate Marketing

During the event Rakuten LinkShare released research they had commissied and undertaken by Forrester Research examining the Direct and Indirect Value of Affiliate Marketing in 2012.

A4u has covered the research in more detail here but highlights from the presentation examined the changing goalposts of market share from Nokia through to Internet Explorer. An interesting point pleasing our in-house tech team was the diminishing stake of market share Internet Explorer now possesses, down from 70% to just 30% over 4 years.

Further insights included the rise of Social Media. Currently at 90% online penetration across the globe, with the highest figures of 98% in the UK and 90% in Germany, Forrester Research are expecting Social Media to level off with 'time for people to actually participate within it' being touted as the main stalling point.

Obvious growth opportunities lie in Mobile Commerce, which according to Forrester Research is without doubt replacing the Desktop. Estimated to triple by 2016 to $31 billion, the key areas for action are likely to be how to adapt to the mobile shopper as they spawn themselves as 'agile marketers' where the supremacy of online to offline experiences will be most lucrative.

The survey produced some comforting results for the channel. Spend is rising in line with all digital spending, the channel produces new-to-life customers, incremental in value, consumers are more likely to buy a product they find merchandised or advertised on multiple websites, produces higher AOV's and helps to trigger brand reconsideration, often closing the sale / deal in the process.

The same was said for the impact on brand reputation & loyalty. The results showed that it does not hurt your brand reputation by being seen on multiple websites within the affiliate channel. In fact, the results flipped perception and stated that by failing to reach out to customers within the affiliate channel is more likely to damage your brand. A reassuring message for advertisers adopting the channel for the first time as well as the future of Performance Marketing as a whole.

Good News? I think so.

On a side note, I have sat through many deliveries of industry research over the years, commissioned by those within the industry and carried out by external research specialists. I was particularly impressed with how much knowledge and understanding Andy Hoard, Senior Analyst at Forrester Research had on our industry, which made the delivery of the research far more engaging, something which can usually be seen as a dry session.

You can download the 'The Direct and Indirect Value that Affiliates Deliver to Advertisers' report here.

Golden Link Awards

Lunchtime at the Symposium and the Golden Link Awards took place within the ballroom at the Waldorf Astoria. These awards take place annually and are judged to reward the ‘best within LinkShare’ - Congratulations to the winners below:

Venture Capital & eCommerce

One other session that discussed some very topical technologies and models affecting the global performance marketing sector was the panel debate involving a number of Venture Capitalists along with recently funded Publishers in VigLink and AHAlife.

eCommerce trends were discussed at length, with Cotter Cunningham, Founder and CEO of WhaleShark Media stating the importance of personalisation in delivering an eCommerce offering, quite simply because web users aren't just spoilt for choice, but increasingly overwhelmed by it.

Cunningham also mentioned about the coupon culture and the increasing importance of building an international best practice guide to coupon use, which is imperative for a global eCommerce structure.

Personally I found comments from Shauna Mei, Founder and CEO of AHAlife, to be very much at the cutting-edge of technology and trend adoption. AHAlife is a product discovery portal, and has already dipped far more than its toes into Social Commerce. Mei noted that Pinterest was already responsible for 50% of their organic traffic, which delivered high AOV's and traffic, but lower conversions to sales ratios.

AHAlife have also tested 'Agile Commerce' by opening a luxury end pop-up shop in a Beverly Hills hotel, where luxury travellers and hotel guests could benefit from buying within the offline store but getting the items delivered direct via home delivery, decreasing bulky travel luggage. We've already seen something similar with eBay and Argos in the UK during Christmas last year, who opened pop up stores for 7 days on Oxford Street and Paddington Station where top selling products were displayed and QR codes were used to make an online purchase and home delivery service. +

However it's great to see a Publisher joining the mix and pushing offline convergence.

Positive News for Performance Marketing

From using my time whilst at the Symposium to research the US market, I was impressed with the increasing desire by both publishers and advertisers to work more closely with their counterparts when moving to the next step of client management.

These advancing relationships can only aid the goals set out by the likes of the Performance Marketing Association to improve best practice, plus with the added insight from the research report showcasing how well positioned the Affiliate channel is for content-hungry consumers, incremental sales and increasing brand perceptions, the channel is most certainly positive in its outlook. Great news all round.

Chris Johnson

Chris Johnson

Content Director for PerformanceIN. Based in Bristol & London.

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