The recent a4uexpo London had lots of good talks this year but my favourite from the event was Matt Swan and Helen Southgate discussing Sky’s data. Within the presentation they looked at the different performance of affiliates on different metrics. It got me thinking about how people segment their affiliate base.
The need to segment your affiliate base is obvious. You only have to look at a recent A4u forum thread, from a couple of weeks ago, to see that being sent irrelevant communications or offers is frustrating.
Most times when I hear people talk about segmenting their programme, they talk about doing it by the type of affiliate. It kind of makes sense. Cashback affiliates should in theory be most worried about the cashback offered, the voucher code sites want the best code and content sites want something they can write about. But does this over simplify the affiliate’s business? On a lot of programmes, there will be more in common between affiliate types so it could be a good way to segment. But the main thing they will have in common is the promotional tool. How often do people actually look at the sales being driven by these affiliates to see if they have anything else in common?
Another panel from the expo had an affiliate champion for each area. While I really enjoyed it, what it highlighted more than anything is that a lot of affiliate types have converged. Just looking at cashback; sites are doing content, they have comparison engines, they offer branding opportunities, and they promote vouchercodes. Although segmented as the same ‘affiliate type’, some cashback sites may have more in common with content sites like Money Saving Expert than other cashback affiliates.
So how do you segment them?
I think Helen’s talk could suggest one way. Ask yourself some questions about your programme. Do you have insight into the type of customer that is being driven by the affiliate? For example, do they tend to attract customers with higher basket value? Is the churn lower? What sort of customer demographic do you get from them? Can you look to segment your affiliates based on the type of customers they provide? Would the affiliate perform better with a different promotional message tailored towards their audience? Perhaps you still use the promotional type as the base for the segmentation but then use your data to create sub-segments.
Using Sky as an example, could they create bespoke promotions around the full Sky+HD packages with Broadband etc to those affiliates whose users have the higher spend? Affiliates with lower basket values may convert better with a stripped down version. Perhaps these customers are less valuable so Sky could look at how they demonstrate the value of the higher packages through this affiliate segment. If they are content sites, can Sky work alongside them to provide good quality content on the savings for the full package? Segmenting the affiliate base by the end user rather than thinking all affiliates are the same.
But average order value should not be looked at in isolation. It is also important to look at what they are selling. The affiliate who was upset in the thread above was being sent information about diets when he only promotes travel. So for Sky it could make sense to look at the product split from affiliates before sending offers out to them. Sky may have affiliates that focus on different areas. For example, a sport blogger might push Sky Sports. They are, therefore, likely to be more engaged with Sports related communication and promotions than finding out about the special offer on Talk Unlimited.
If your time is limited, then segmenting by affiliate type is better than nothing. You will hit a lot of affiliates with a promotional offer/tool that they can use. But by actually looking at some of your data, understanding your affiliates and their users will give you a better insight and opportunity to help improve their performance. You will also be less likely to be accused of spamming. One definition of marketing is to identify and fulfil and exceed customer needs. It’s interesting that in affiliate marketing, segmentation too often fails to look at the customer and instead looks at the method of promotion.