Following a recent panel discussion at Affiliate Summit East on the incrementality of the affiliate channel, media agency R.O.EYE has today (April 30) released its whitepaper, Incrementality or Cannibalisation? What is your Affiliate Channel Driving? which aims to address the much-discussed approach with a scientific view on how affiliates are adding incremental value to the customer journey.
With the report attracting interest, PerformanceIN caught up with R.O.EYE head of business development Chris Blower to get the lowdown on the whitepaper release and why incrementality remains a hot topic among affiliates at present.
You’ve just released your Affiliate Marketing Incrementality Whitepaper. Why is incrementality such a hot topic at the moment among affiliates at present?
Chris Blower: You’ve actually hit the nail on the head with one of your later questions – it's the dominance of incentive sites that have caused many advertisers to question if the affiliate channel is still adding real value. Advertisers want to know if the sale would have happened without the affiliate being involved and we hear terms such as “goal hanging” being used a lot within the industry.
The recent Affiliate Summit in Amsterdam had a whole session concentrated on this topic, so we wanted to continue the conversation by offering a scientific and agnostic stance to the argument, based on the data we’re recording through our attribution model. With the proliferation of online marketing, consumers can now be targeted multiple times across multiple channels, which has made the traditional measure of incrementality – a single touchpoint within the customer journey – defunct.
As an agency, it’s extremely important for us to know that the activity we sign-off on behalf of our clients provides an incremental benefit to their bottom line.
There’s been some positives and negatives faced with this approach to date in the affiliate channel. What are you hoping to address in the upcoming report?
CB: We’re aiming to address the fundamental question of “how do I make my marketing spend work harder”, and “how do I optimise it across all channels to drive maximum results?” But before we can tackle that, we need to determine the true value of each touchpoint in a customer journey, specifically what contribution it made in converting the sale.
Part of understanding the contribution of each touchpoint, or in this case the affiliate touchpoints, is understanding how to determine if the affiliates are driving more sales by being part of the mix. If they are, that’s a clear indication of incrementality.
Cashback and voucher code sites remain dominant when it comes to incrementality. With the report in context, how have both roles developed within the channel as well in the customer journey?
CB: Cashback and voucher code sites are here to stay, and if we’re being pragmatic then it’s fair to say if your competitors are using them, you will be missing out on sales if you don’t too. However, that doesn’t mean that we have to sit back and accept a possible negative contribution from cashback and voucher code sites.
From our analysis on the report, we see clear evidence of incentive sites driving value, and how working with them in collaborative ways, the incrementality of both cashback and voucher code sites can be increased. The test and learn approach to using incentive sites can continually improve incrementality and their overall positive contribution, but that depends on being able to determine what’s working and what’s not, and therefore where to invest more and where to reduce spending.
Do you think that incrementality has matured enough in the industry and rewarding those within the channel fairly when it comes to sales/revenue? Or, are we still seeing issues with the approach today?
CB: Rewarding on incrementality or data-driven attribution values is a much fairer way to reward those channels involved in converting each customer journey. We all know the problem with multiple channels measuring their own value, where the sum of the sales claimed by all channels involved, is greater than the actual sum of sales. However, there is a lack of advertisers that are currently rewarding digital channels based on an attributed value – they are using crude attributed values (e.g. paying cash back at a lower for existing customers), rather than in a scientific manner.
Advertisers can use data-driven attributed values to optimise their spend across and within channels, thereby investing more of their budgets in channels that are driving value as opposed to those that are not. This level of optimisation can be determined right down to individual affiliates or campaign level and recommend that advertisers track the net contribution of performance over time.
Lastly, what other reports or developments are you guys working on that we should be aware of?
CB: Our next report will be focused on paid search, and as well as looking at incrementality, we’ll focus on the pros and cons of brand versus generic keyword spend. Later in the year we’ll be sharing some of our analysis of the display and paid social channels to build up some resources that people can hopefully use as a guide and learn more.
Regarding the product roadmap at R.O.EYE, it’s imperative that investment in the data-driven attribution platform is continued. New features help advertisers identify how to spend more efficiently in the channel and the impact that it has elsewhere in the customer journey.