Direct-to-Consumer is becoming a bigger priority for consumers – and for brands

Let’s step back a bit. Consumers were already beginning to express a preference for buying directly from brands prior to the COVID-19 crisis. As of early 2020, two out of every five Americans had made a purchase directly from a brand or manufacturer, bypassing middlemen like Amazon and Walmart. But the pandemic has made supporting local businesses an increased focus for consumers, further accelerating this direct-to-consumer (DTC) trend. And eMarketer predicts that by 2022, the number of DTC e-commerce customers will hit an all-time high of 103 million. 

According to Shopify Plus, “Brands selling direct to consumer entered the global pandemic in a position of strength, while legacy wholesalers and offline brick-and-mortar businesses made rapid shifts to begin selling direct for the first time.” They elaborate in their Direct-to-Consumer Guide, “Strategic pivots have emerged in verticals that had never before sold direct. Heinz, established in 1869, launched its first ever DTC initiative in seven days. And Lindt, a Swiss chocolate company since 1845, launched in just five.”

To cultivate trust with consumers, publishers should provide a seamless customer experience

For publishers with affiliate programmes, it’s important to consider the full customer experience – not just the experience on your own website. By reviewing and recommending products to readers, you are cultivating consumer trust. And the reliability of your recommendations is just one factor that influences shopper perception of how trustworthy your content is. The quality of the product page you link out to is crucial too.

Make sure that when you link out to recommended products, you are providing shoppers with a seamless experience that takes them where they want to go – so they will be more inclined to follow through and make a purchase. Increasingly, this will mean driving them directly to the merchant brand’s e-commerce website, where they will be able to learn more about the product and feel a stronger connection to the brand. 

Stay in control of your commissions by building partnerships directly with brands

With Amazon’s recent cuts to commission rates, publishers with affiliate programmes now have an even stronger incentive to drive referrals directly to merchant brands. 

CNBC reported of the commission cuts, “Rates are being cut [by Amazon] for a number of affiliate product categories. For example, the affiliate cut from purchases of furniture and home improvement products has fallen from 8% to 3%, while the commission rate for grocery products has slid from 5% to 1%.” 

These cuts are a problem for all publishers that rely on referral commissions as part of their revenue. But for some publishers, this change could actually pose an existential threat. In the same report, CNBC stated, “One member of [Amazon’s] programme, who asked to remain anonymous, said they ‘cannot afford’ the fee cuts that were announced, since a main portion of their income comes from commissions earned via Amazon links.”

Fortunately, there’s a solution for publishers: instead of big-box retailers, partner directly with brands for referral commissions. Many brands have their own affiliate programmes, and many more are beginning to explore them as an option for their evolving marketing strategy. 

The timing has never been better for publishers to connect with merchant brands and establish commission rates that work well for both the publisher and the brand. 

As Tobi Lütke, CEO of Shopify, has stated, “Nice-to-have business capabilities are now must-haves. The pandemic has brought 2030 to 2020, with a rapid acceleration of consumer buying behavior and online retail trends. We’re seeing the world’s largest and most storied brands abandon legacy platforms. They’re launching DTC initiatives fast, and slashing costs at the same time.”

By partnering directly with brands, and working with a good affiliate marketing platform that facilitates those direct relationships with merchant brands – and that provides reliable first-party tracking, and automatic commission payouts – publishers will be set up for success in the post-pandemic world and beyond.

The post What Amazon Commission Cuts Mean for Publishers With Affiliate Programmes appeared first on PerformanceIN.

Third party cookies are out, user privacy is in

The Apple privacy update introduces new IDFA (iOS Advertising Device ID) opt-in requirements, which now need users to provide explicit consent to allow third-party tracking in apps. Since very few people are likely to give this consent, the IDFA is essentially no longer a reliable identifier of users. When Apple releases the iOS 14.5 software update soon, user-level data collection will fundamentally change on iPhones. Users will have to Opt IN to allow data collection, whereas historically users have had to Opt OUT of data collection. Most advertising will be impacted less than social media advertising.

Similar to Apple’s focus on privacy, Google Chrome will phase out support for third party cookies in early 2022 affecting two main areas: audience targeting and measurement (conversion tracking). All ad types will be impacted in terms of measurement, and there is a possibility that reported conversions from your ads will decline, even with no change in actual conversions.

Display advertising on the web will be affected the most in terms of targeting, but ad platforms like Google are already working on minimising this effect by replacing user-level identifiers with aggregated cohort data powered by privacy-preserving API’s. Basically, Google will target groups of people based on machine learning as opposed to targeting individuals based on user- specific tracking.

Influencer and affiliate marketing built on first-party data

Third-party cookies have been becoming increasingly unreliable and are now at increasing risk of being blacklisted. Here’s the good news: if you’re already using first-party tracking to attribute affiliate sales, these updates won’t impact your brand.

Some performance marketing platforms don’t rely on third-party cookies, so if you use an influencer or affiliate marketing platform built on first-party tracking and measurement, you’re all set. The tracking technology should be privacy compliant, while creating best-in-class attribution for brand and performance marketers. All influencers and affiliates should remain private to the affiliate marketing program and each affiliate should receive their own performance dashboard with relevant information and KPI’s like conversion triggers, payment information, and brand creatives.

A first-party data approach to tracking should also be secure, and since it acts as a creator and processor of your program data, and not share any data with third parties without your approval. This gives you and your brand full control over your tracking data and performance marketing programs. With only 5% of US based users giving permission to track them, first party data is the most valuable data a brand can collect about its audience, enabled by first party data marketing platforms.

The post Apple and Google Privacy Updates: the Impact on Influencer and Affiliate Marketing appeared first on PerformanceIN.