An e-commerce advertiser must consider at some point to run internationally.
Now, if we are a Merchant in the US or in the UK we face a couple of issues when looking to expand internationally:
- Our domestic market has established rules we know and respect, which is why we are successful there. Changing them might jeapordise our local postition and maybe weaken our business.
- Our language
- Our currency : selling abroad means currency issues, pricing segments etc
- Expensive delivery / custom duties costs
- VAT or no VAT calculation
- Logistical issues : what about returns?
Which Markets should I target, and why?
Firstly, in which territories / markets should we be selling in, and how can we leverage the affiliate marketing channel effectively?
If we forget English as a language, we can segment the online market in Europe in different groups. Depending on our product, company size and resources the focus can be on:
A) Large Mature Markets:
- Large population
- Used to purchasing online
- Elaborate payment methods for e-commerce
- Large spending power
This would leave 2 countries to choose from initially in 2011, France and Germany. We would tend to put the Netherlands in this category, however the drawback being a smaller population, but with a large spending power.
B) Rapidly Maturing Markets:
Even though Italy and Spain both have a large population, not all e-commerce channels have matured sufficiently yet when compared with other larger territories.
C) Niche Markets - high spending power, but small high identity population and own language:
- Switzerland - (often integrated into Germany's marketing effort, which is a mistake - with 3 nationalities, a seperate currency and strong national identity, the Swiss 'slice of pie' can be very interesting)
- Austria - (although Euro, still very different from Germany)
- Sweden, Norway, Denmark
A strong niche campaign can achieve amazing ROI as well as branding within these countries.
D) Developing Markets
- Other Eastern Countries
Guidelines for expanding Our Affiliate Programme internationally, outside of the UK and US
As the theme of this post is about an international affiliate programme, we'll leave the topic of translation for a future one.
For the sake of this post, let's say we decide to tackle the German market. We recommend taking these steps when considering expansion into Germany:
Research the competition - we need to check which affiliate programmes are already present in our market. The obvious yet most productive way to see this is to sign up as an affiliate with the different networks. A list of networks and affiliate solutions are available at Performance Hub. We can then see the comission offered and assess whether we could be competitive with our offering.
Objectively asses our brand / product - One big mistake many advertisers do when they start in another country is to believe their brand has the same notoriety as in their domestic market, or the pricing and cost of acquisition is the same as 'home'. As a newcomer we need to incentivise affiliates to push our programmes. We can do this only by offering more attractive commissions, faster payouts, lower cancellation rates, better tools or simply less program restrictions than our competitors.
Define our goals - If it's the first time we've sold abroad, we will need to prepare the fact that we are launching an undeveloped brand, which needs developing in this territory. We can't expect the same returns than our domestic market, and therefore our budget needs to reflect this. If we're unsure about the perspective and results, one idea is to choose a 100% performance based local network.
Choose our Affiliate Network(s) - Besides the budget to allocate, you have the inital choice of two:
Should I use a Local or International Network?
Choosing an international network has it's advantages:
- One single point of contact
- One payment
- Leveraging the history within the network as a large advertiser (i.e discounts to start within new territories)
- Even if they sell their international teams, we rarely saw flawless communications within international teams at networks.
- Often the local country inheriting the programme will pout it, not wanting to put on resources on a new small programme, as their income often is commission or results-based. The reality when launching on the same network but within another territory is to give the programme an initial 'push' to see reaction, so as an Advertiser we need to promote ourselves heavily as well.
This international option does not make a lot of sense if we only want to work with one country outside of the UK at first. However if we go for more than 3-4 countries, the likelihood will be that we'll have to use an international network. Having the resources to deal with 6-7 smaller local networks with different languages will otherwise be a strain.
A Local Network - Are by far our favourite choice for the beginning to cover Germany (when using Germany as the example in this post)
Managing Our Affiliate Programme
Program Policy - What should we consider?
- Does it make sense to restrict the keyword policy or can we open it up to help with our initial launch for increased sales / brand awareness?
- Should we allow incentivised traffic?
- Should we allow Voucher Codes?
- Is our product Datafeed Sufficient?
Programme Communication & Animation
- Do we know the important dates of our new market? Oktoberfest, Sales dates, Holy Days, Bank Holidays? Germany is a federation with different school holidays per state... are our banners adapted or generic?
- How are our ads translated? Is the message strong / accurate enough in German or is it literally translated meaning nothing to the end user?
- Do we master the new affiliate programme interface to get the stats and check for fraudulent activities? What else does the network do for a local advertiser that they can help us with?
Affiliate Manager Contacts
- Does the network offer us affiliate manager support? Can we reach them on the phone? Are they trained and competent, and adding more value to our Affiliate activity?
Overall, this does sound like a lot of work, but gaining access to new markets is definitely something to be considered.