For the affiliate world, that’s what mobile is today: a channel of a thousand edge cases, especially in the app context. From the tech perspective, getting from a publisher’s app to a brand’s app involves factoring in countless variables, including operating system intricacies, device intricacies, whether the user has the brand app installed, and what to do when they don’t. Inevitably, things break, and that’s bad for everyone. 

In contrast, desktop affiliate is absurdly more simple: The user clicks on a publisher link in one browser tab and is directed to the brand’s website in another browser tab.

The problem is that desktop isn’t the future – mobile is. Because of this, the affiliate industry needs to take the issues that are holding mobile back seriously and layout real solutions to solve them. 

Here are a few of the big challenges, why they matter, and one big reason why the industry should fix them. 

Brands are missing out on a powerful app acquisition channel

For brands, app installs are hard to come by, and quality app installs are even harder. In 2018, AppsFlyer forecasted that spending on app installs would increase to $64 billion this year, up from $27 billion just three years ago. Brands everywhere recognize the value of app users and are competing with each other to acquire them. The install-to-purchase rate has nearly doubled since 2017, according to data from Adjust and Liftoff. 

The affiliate channel is in a good position to offer brands another way to acquire quality, high-intent users. Last year, for example, based on Button platform data, we saw that 36.4% of people who installed an app also made a purchase (8.5% of people made a purchase directly after installing.)

The reason that installs from the affiliate channel perform so much better than any other channel is because there’s an install added to the purchase path, rather than pushing an install on its own. 

The bottom line is, if we can turn the affiliate channel into an app install channel, it opens up access to millions of high-intent installers. 

Broken links: You can’t get paid for what you can’t track

For brands and publishers, broken links are bad business. 

Unfortunately, broken links are common on mobile, particularly, when users move from mobile web to mobile apps, and vice-versa. 

Why does that matter? Because when links break, so does attribution, which is bad for both brands and publishers. Brand marketers don’t know which publishers are their strongest performing partners (and can’t trace the entire user journey), and publishers don’t get properly compensated for the sales they drive. 

There are big knock-on effects for users as well. If a user clicks a cashback offer and doesn’t get credit for their purchase, then that’s bad user experience. Moreover, it means that publishers have to deal with complaints from users upset that they haven’t gotten their cashback.

Bad mobile user experiences are punishing brands’ most loyal users

Speaking of bad user experiences, here’s another one. 

When given the chance, mobile users would much rather transact in a brand’s app than on a brand’s website. We know this from the data. During last year’s holiday season, for example, users across Button’s platform were twice as likely to convert in apps than on the mobile web and represented over 75% of total orders.

Yet, despite that, when users click on a brand’s affiliate link in a publisher app, they’re more likely to be sent to the brand’s mobile website, not their app. This is true even if the user already has the brand’s app installed on their phone. Why is that bad? Because it results in a lower conversion rate and a lower lifetime value. 

More fundamentally, this is just bad user experience, and it should be the opposite of what brands want for their most loyal users 

Why this matters

I promised I would give you a reason why these are problems we need to fix. Well, here it is – Money.

Through poor user experience and untracked sales, the affiliate channel is leaving millions of pounds on the table every single day. The longer you go without fixing it, the more money you lose. This is a challenge every brand, publisher, and network should be invested in fixing.

The post Mobile Affiliate: Three Ways it’s (Still) Broken appeared first on PerformanceIN.

For years, this has been one of the most common questions CMOs have asked their marketing teams about their affiliate spend. Those teams, unable to answer the question with much confidence, have instead responded with a shrug: “We’re not too sure.” 

The result: Lacking a good way to prove the incrementality of the publishers they work with, affiliate marketing managers are forced to optimise for margin instead of for volume.

This is a stark contrast from other dynamic channels, which offer tools that lets budget holders hypothesise, test, and prove incrementality. These tools give marketers confidence and proof of value, and those two things are what help them justify their continued focus on volume.

Here’s how Tiziana Bacchilega, affiliates lead at Deliveroo puts it: 

“Incrementality is key at Deliveroo, and more importantly the ability to rigorously test and prove incrementality to inform marketing spend. It is increasingly difficult to justify investment inactivity if we are not able to measure the return with confidence, and this results in the budget being allocated to channels where incrementality testing is becoming a routine.”

In this piece, I’ll explain the relationship between a brand’s ability to test and their willingness to spend, and dig into how incrementality testing gives affiliates the ability to prove the value they bring to brands.

More channel risk means less channel investment

For marketers, there is usually a direct conflict between margin and volume. The less incremental the channel is perceived to be, the fewer marketers are willing to optimise towards volume and growth. The opposite is also true: The more you can prove your value, the less risky you are, and the more a brand will be willing to spend with you. 

In performance marketing, the way you manage risk is by managing margin, and the way to manage margin is by reducing rates.

When spending on a channel that is perceived to be risky, marketers will typically bake in hefty margins — as much as 75% — to give themselves flexibility in the event of any macro changes. (These changes can include their target profit margins, their ratio of new-to-existing users, or their larger corporate strategy.) 

For better-optimised channels, brands are willing to run activity at a much thinner margin. This is because they know the value of their ad spend and are able to quickly optimise said spend to compensate for macro factors.

What that means for publishers is that the cost-per-acquisition a brand is willing to spend with an affiliate is significantly lower than they’re willing to spend in any other performance channel. To protect themselves, brands will pad their margins and run publishers at a much lower rate than they would deem acceptable in other channels. 

In cashback programmes, this results in less money to the user, which leads to lower volumes, which in turn means less revenue for publishers. 

How to run incrementality tests — the right way

If publishers want to increase the amount of money that brands spend with them, then they need to increase confidence in them at the senior marketing level. In my view, the only way they can do that is by regularly, proactively, and willingly articulating the value that they’re bringing to the table.

How can they do this? Though incrementality testing. Here’s how the process works: 

• First, we create two user groups: one that sees an offer (the test group), and another that does not (the control group). 
• Then, you compare the behaviour of the two groups to see if the users who saw the offer made more purchases than the ones who didn’t. 
• If the test group bought more than the control group then the publisher has proven that they’re providing a level of incrementality. This can be attributed back to a cost per incremental order, cost per incremental ride, cost per booking, or even return on spend.

All that sounds good in theory, but publishers invariably run into complications during the testing process. Here are a few best practices: 

• Publishers and brands should align on what “success” is from the outset. Incrementality isn’t a binary thing. Instead, it should be measured with clear KPIs and alignment on what good looks like, ideally before the tests run.
• Brands should commit to what happens when an incrementality test is a successful one. One of the biggest reasons why publishers are sceptical of testing is that proving incrementality often doesn’t result in an increase in spending. Ideally, publishers should look to brands for a commitment on whether spend will increase when incrementality is proven. 
• Publishers should make sure that the brand is running the test across multiple publishers at the same time. Another reason why publishers are so sceptical about incrementality testing is that brands will often run holdout groups across 10% to 20% of their users (meaning that these users don’t get any cashback) while maintaining existing programmes with competing sites. The result is that these users see they’re not getting any rewards, then transact with another competing publisher. A true incrementality test requires that the brand runs the test across competing publishers at the same time. This is especially important for the UK, where we have two dominant cashback players. 

Smaller publishers need to make sure they have enough resources for testing. Unless you have the right systems in place, the process I explained above will invariably require a lot of data science hours and a lot of CSV files being sent back and forth. This can be a real resource strain for both brands and publishers, particularly smaller ones, which are unlikely to have the scale, data science, and engineering resources necessary to run these kinds of tests. 

More confidence, bigger budgets

The bottom line is this: Marketers today value fewer things more than the ability to optimise and test. For publishers, this means that giving brands the ability to test for incrementality and impact is the surest way to get brands to spend more with them. The publishers that embrace this will see brand investment grow to new heights, while the ones that resist it will continue to decline.

The post How Affiliate Can Prove its Value and Help Brands Spend Smarter appeared first on PerformanceIN.