INside Performance Marketing
Geo-fragmentation: A global performance marketing challenge

Geo-fragmentation: A global performance marketing challenge

It’s estimated that in 2012 alone, 154.6 million people will make at least one online purchase. If you’re in the Internet marketing industry, you’ve likely experimented with various marketing efforts as a way to capitalise on this trend.

Affiliate marketing can serve as the basis for a very successful revenue model, but there are a number of idiosyncrasies within the system. Often, affiliate marketing can result in a bad user experience for international visitors, and lost commissions from this same traffic segment, especially when marketing global brands. The kicker: Most affiliate marketers aren’t aware of their misplaced efforts.

The problem is two-fold: First, international brands typically break their online stores into separate region-specific storefronts and online shoppers are likely to only purchase from their local storefront. Second, each of these storefronts typically has it’s own independent affiliate program. While this isn’t the case for every international brand, it’s common practice among brands such as Amazon (with nine regional storefronts and nine affiliate programs) or Apple’s App Store and iTunes Store (with storefronts in 155 countries and 45 affiliate programs).

Together, these two challenges are the basis for the term ‘geo-fragmentation’. Simply stated: if you want to earn affiliate commissions and ensure a good experience for your shoppers, you must direct your users to their local storefronts with the appropriate affiliate link. Sending all of your traffic to an item in one storefront using one affiliate program will only earn you commissions from one region.

Local Storefronts

Large brands set up storefronts by region for various reasons: language and currency differences (think English/GBP vs. Spanish and French/EUR), licensing (think digital rights licensing for digital downloads), complex international tax and accounting laws (think Brazil and China), restrictive shipping costs (think shipping physical goods internationally), or a combination of these and other arcane factors. Whatever the reason(s), it’s important to realise that these regional storefronts are optimized for efficient selling to a specific audience.

Incorrectly routing international traffic kills your sales cycle In addition to dragging down your conversion rates, incorrectly routing your international traffic has another pitfall: it signals the end of your sales cycle. After all of the time you put into nurturing and generating leads the only thing worse than not being credited when those users convert would be losing them as customers altogether.

A lost sales opportunity is likely when a customer is routed to a foreign storefront. For example, within a given iTunes or App Store storefront, you can only make purchases if your credit card matches that region or country (e.g a UK credit card can’t be used to make a purchase in the US iTunes Store).

Unfortunately, just swapping out the domain name or changing the country code in the link will not completely solve this problem. An item in one storefront may be given a completely different ID in another storefront. To illustrate this point, let’s look at links to the best-selling album of 2011, Adele’s 21, in a few international iTunes storefronts:

US - https://itunes.apple.com/us/album/21/id420075073?uo=4
CA - https://itunes.apple.com/ca/album/21/id403988688?uo=4
UK - https://itunes.apple.com/gb/album/21/id405293187?uo=4
JP - https://itunes.apple.com/jp/album/21/id413208801?uo=4
BR - https://itunes.apple.com/br/album/21/id477022345?uo=4

As you can see, 21 has a unique iTunes ID for each of the above storefronts: US, Canada, the UK, Japan and Brazil.

The table below further illustrates the challenges associated with linking to an item in multiple storefronts.

Geo-specific links

US iTunes, App Store and iBookstore links compared internationally: the table above shows the percent of top 300 links from the US storefront that fail for an international visitor from each of the countries shown. For example, links for 72% of the top iTunes music tracks from US will not work in the UK.

When reviewing iOS apps, we see that a relatively small percent of US links will break for international visitors. However, we see a very different picture when examining the top US music tracks where visitors in countries like the UK could see up to 72% of links failing. Similarly, links to the top US movies fail more often than not for international visitors, especially in countries with differing native languages.

Using Multiple Affiliate Programs

The second issue created by ‘geo-fragmentation’ manifests when an affiliate program is set up to support the marketing efforts of each storefront. What this means to you is that using one affiliate program will only result in commissions earned for sales in that storefront. All of the traffic you referred with sales that ultimately took place outside that region will not net you a commission.

The issue is compounded when multiple affiliate networks are used to manage a brand’s affiliate programs. Each affiliate network typically has a proprietary linking format. To illustrate this, look at the mix of iTunes affiliate links below. Each of which would be required to internationally maximize commissions when linking to Adele’s album, 21.

US - http://click.linksynergy.com/fs-bin/stat?id=CBIMlgYY/8&offerid;=146261&type;=3&subid;=0&tmpid;=1826&RD;_PARM1=https%253A%252F%252Fitunes.apple.com%252Fus%252Falbum%252F21%252Fid420075073%253Fuo%253D4%2526partnerId%253D30 CA - http://click.linksynergy.com/fs-bin/stat?id=8i/ET44NjHw&offerid;=162397&type;=3&subid;=0&tmpid;=3664&RD;_PARM1=https%253A%252F%252Fitunes.apple.com%252Fca%252Falbum%252F21%252Fid403988688%253Fuo%253D4%2526partnerId%253D30 UK - http://clkuk.tradedoubler.com/click?p=23708&a;=1614664&url;=https%3A%2F%2Fitunes.apple.com%2Fgb%2Falbum%2F21%2Fid405293187%3Fuo%3D4%26partnerId%3D2003 BR - http://clk.tradedoubler.com/click?p=214843&a;=2063386&url;=https%3A%2F%2Fitunes.apple.com%2Fbr%2Falbum%2F21%2Fid477022345%3Fuo%3D4%26partnerId%3D2003 JP - http://click.linksynergy.com/fs-bin/stat?id=ENCwIA*xbI&offerid;=94348&type;=3&subid;=0&tmpid;=2192&RD;_PARM1=https%253A%252F%252Fitunes.apple.com%252Fjp%252Falbum%252F21%252Fid413208801%253Fuo%253D4%2526partnerId%253D30 AU - http://t.dgm-au.com/c/30099/31316/1152?u=https%3A%2F%2Fitunes.apple.com%2Fau%2Falbum%2F21%2Fid405293187%3Fuo%3D4%26partnerId%3D1002

Optimising for ‘geo-fragmentation’

By improving your international users’ experience, you will likely generate more leads while building better brand loyalty. In addition, by being efficient with which affiliate links are served, you put yourself in a better position to capitalise on that traffic, and subsequently improve your click metrics.

At GeoRiot, a company I co-founded that is one of the growing number of third party services that exist to solve these global affiliate-linking challenges, we see that our clients’ national audience typically accounts for only 40 - 50% of their total click traffic. We find that by serving the correct link and utilising multiple affiliate programs our clients, on average, are able to double and sometimes even triple their affiliate commissions Viglink upgrade iTunes affiliate links from the same amount of click traffic.

Perhaps one of the biggest problems we face in the world of ‘geo-fragmentation’ (bigger than untangling the web of affiliate networks, programs, and geo-specific) is spreading awareness of the issue itself.

They say the first step in solving a problem is knowing that it exists. I hope this has helped you.

Continue the conversation

Got a question or comment – tweet Jesse JesseLakes or comment on Twitter, Facebook or LinkedIN.

Jesse Lakes

Jesse Lakes

Jesse Lakes is the Co-Founder and CEO of GeoRiot, a service that helps marketers by offering a single link that directs an audience from around the world and across many devices to a specific item in their local storefront to create a seamless buying experience.

Read more from Jesse

Related Articles

Join over 10,000 performance marketers for the ultimate weekly update on industry news