The definition of Performance Marketing is quite hard to pin down, and usually varies depending on who you ask. For many, it is the absolute tip of the marketing funnel, where leads convert into sales through channels like affiliates and retargeting. For others it is a catch-all for all digital channels, and all digital channels are thought of in this light as being last click revenue drivers. 

The Performance Marketing Association defines it as “a comprehensive term that refers to online marketing and advertising programs in which advertisers (a.k.a., “retailers” or “merchants”)  pay marketing companies (a.k.a, “affiliates” or “publishers”) when  a specific action is completed; such as a sale, lead or click.” 

While this is a solid definition, it is not always accurate. What, in this definition, would display prospecting, or video pre-roll be? Not performance in this sense, but probably also not quite brand marketing in the sense that a creative director might talk about it.

In fact, this distinction between “brand” and “performance” marketing is, in the first place, a completely false one. No individual channel is innately only suited to driving direct response or long-term brand perception, as the two are inextricably linked. When it comes to specific marketing channels, they can all do both tasks in different ways and to different extents. “Performance marketing” as such needs to develop from being a very narrow view of direct response tactics and channels, into a broader set of approaches and methodologies.

Developing a performance approach 

This is, of course, easier said than done. The first, most critical, step however is to broaden the way we look at marketing by considering all channels as part of a complex mix, and consider the phases consumers pass through in any purchase decision journey. Broadly, and extremely simplistically, consumers are either passively or actively thinking about products and services. 

When they are thinking passively, they may not be “in market” to purchase, but they are consuming content and being exposed to messaging that will influence their decisions further down the line. This might be how we most conventionally think about “brand” advertising such as TV or print ads, but it is not exclusively the case, especially considering prospecting-style activity on social on display. Moreover, performance tactics can trigger a change of mind state, from passive to active. For example, a TV ad that includes the call to action of “Sale this weekend only” could prompt a consumer to start actively considering the product, which would be a performance approach applied to a brand channel, communicating with a consumer that is not conventionally in-market.

When consumers are thinking actively, they are in the process of exploring their options and evaluating the best choices. Exploration is an additive process of adding additional brands and products into their comparison set, while evaluation is the narrowing down of that set to their preferred final option. The role of any marketing is to shorten this process down as much as possible, up to the point where the consumer simply repeatedly buys from their preferred brand without considering alternatives. This is a highly complex mixture of branding and performance tactics that drive either brand/product consideration or taking action and purchasing. This final act of purchase is historically where “performance” marketing sat in the journey, but this final trigger could be prompted by any touchpoint or combination of touchpoints.

Applying a performance approach

Now that we have developed a more holistic view of how marketing (and performance marketing specifically) interacts with a consumers decision making process, we come to how we apply this in a practical sense. The simplest way to layer this thinking into your planning is to consider the two basic states of thinking: passive and active, and the two sub states within active thinking: evaluating and exploring, as moments that can be influenced. 

Then, the task of marketers is to map the various spectrum of channels, tactics and activations they can use to the various moments of influence in a way that maximises their impact. For example, while retargeting can have a role in all stages, it is perhaps best deployed on those in an evaluative mindset to trigger the change towards purchase. 

Lastly, we need to consider that the correct answer in this view of marketing may not always be, or even include our “performance” channels and tactics. And that is part and parcel of having a more sophisticated approach to performance marketing: knowing when it is not the best answer.

The post Is Performance Marketing Much Broader Than Just Affiliate And Retargeting? appeared first on PerformanceIN.

Marketing psychology is a constantly evolving field, as the marketing landscape becomes ever more interconnected and complex. There is a limited spectrum of what can be achieved to influence consumer behaviour through any marketing, and once you get into the realm of digital, this becomes even more limited. 

Outside of pure awareness, there are only two behaviours that can be meaningfully influenced by digital for any consumer: exploration and evaluation. Affiliates tend to be more towards the “bottom funnel” than other digital channels, as consumers tend to come across them while they seek out the best option, and when they have already found their options and are looking for deals/vouchers. Affiliates then sit neatly within these Exploration and Evaluation behaviours of consumers.

Exploration is an additive phase of consumer research and decision making where a person is looking at options on the market from the set of brands and providers that they know of (or discover) to research various options and add potential solutions to their comparative set.

Evaluation is the exact opposite and is a reductive phase where a person is looking at the relative pros and cons of the brands and providers, they found in the exploration phase, and removing options as they are ruled out for various reasons. 

Consumers can move through these phases once, multiple times, or even not at all, depending on the product and the overall context. However, for almost every product these two phases of decision-making play a major role.

Evaluation is the exact opposite and is a reductive phase where a person is looking at the relative pros and cons of the brands and providers, they found in the exploration phase, and removing options as they are ruled out for various reasons. 

Consumers can move through these phases once, multiple times, or even not at all, depending on the product and the overall context. However, for almost every product these two phases of decision-making play a major role.

Can affiliates fit into these points?

What then, if anything, can affiliates do to influence the decisions made at these points? The degree of influence sits on a spectrum that ranges from “almost none at all” to “fundamental” depending on the type of affiliate being discussed. Where any given affiliate sits on that spectrum depends on a range of factors such as the type of affiliate in question, the product being promoted, and the user demographic being targeted.

Affiliates offering incentives such as voucher or cashback sites have very limited impact on consumer behaviour, as they sit at the very bottom of the funnel where most of the decision has already been made before the consumer arrives at the site. However, even here there is a degree of influence as studies have shown that average order value tends to be higher when a discount or cashback offer has been used, as people tend to be more likely to upgrade what they are buying because of the discount they are receiving. 

However, sites that have closed (or even semi-closed) user groups where offers can not be seen (or in the case of semi-closed, redeemed) unless you are a member can have a larger impact on decision-making, as people tend to browse them looking for offers, rather than seeking out specific offers. Which is what makes ensuring that you, as an affiliate, are present in paid and organic search for “product + offer/voucher code” type search terms. Consumers that are carrying out these searches are more likely to engage with a voucher/cashback site than the brand, and this very late step of the funnel is a key one to ensure drop-off is minimised.

Equally interesting are the giant aggregators of “super affiliates” like Moneysupermarket for finance, or Skyscanner/booking.com for travel. These brands have radically changed the verticals within which they operate, influencing massively the consumer buying journey by presenting all available options in one place. It is worth noting that this impact is most keenly felt in verticals where products are largely homogenous, or rather are perceived as homogenous. Consumers generally do not care what brand of car insurance, or budget flight they are getting, as long as it is the cheapest option that meets their needs.

However, these sites must protect their “integrity” or at least their perceived integrity, and so can actually do very little to manipulate or influence consumer behaviour. The best or cheapest product generally wins. With this in mind, there is a lot to be said about mere exposure of a brand, and many brands will need to be present on aggregator sites purely from a brand awareness point of view.

The last and most important point to consider is the age of your target audience. Younger, 18-34 audiences tend to be much less brand loyal, and are far more concerned with saving money and getting the most value for their money. This means there is a great deal of room to manoeuvre with these users in terms of influencing their buying behaviour. Possible tactics fall into two areas of exploration and evaluation discussed earlier. 

Content is king

On the explorative front, affiliates must consider the importance of content in introducing new brands and products into a consumer’s comparative set while they are doing research and are still susceptible to messaging. During this exploration phase, these younger consumers are not necessarily looking for the cheapest option in absolute terms, they are looking for what they perceive as the best value option. Meaning that content affiliates can guide them towards alternatives they may not have considered before.

During the evaluative phase of research, these younger audiences are much more clear on what products they are considering and are now most likely looking for the best prices. It is at this point that discounts and cashback can have an impact, as they make a decision on which product they will buy, and crucially where they will buy it.

A final point to note is the digital connectedness of this audience means they will do far more in-depth research and are much savvier when it comes to blatant online promotion. It’s absolutely critical that affiliates do not move too far into the “manipulative” end of the spectrum or these consumers will desert them entirely.

Conclusion

In summary, it is hard to define the exact psychology of modern consumers, but there are a few simple behavioural levers that affiliates can tap into, which are:

• Ensuring that voucher codes are structured to maximise the “added value” effect, such as using spend thresholds such as “20% off over £50” to ensure that AOV is maximised
• Aggregators have a huge role to play even for brands that do not have the most compelling offer, as they offer a degree of value in terms of pure brand awareness based on simple exposure to consumers in an Explorative/Evaluative mindset
• For younger (18-34) audiences, the key is to maximise the prominence of content that promotes the value proposition of the various options; and then once decisions have been made, to influence purchase location by offering key incentives via discount or cashback. However, while doing so, it is crucial to maintain the impression of impartiality.

By keeping these in mind, affiliates of all kinds can be sure to influence consumer buying behaviours.

The post How Affiliates Influence Consumer Buying Decisions appeared first on PerformanceIN.

US Treasury Secretary Steven Mnuchin recently said that Amazon had “destroyed the retail industry across the United States,” and arguably it has had an even more destructive impact on the online retail industry. Where does that leave the Affiliate industry that relies on online retail? Under serious threat, unless it adapts rapidly.

Amazon is now the most valuable brand in the world, and it has gotten there through a heady cocktail of customer-centricity and competitive aggression. First, it disrupted the global publishing industry with its Kindle device and platform, exerting monumental pressure on hitherto unchallenged industry powerhouses. Then, it sought to expand from being the go-to place to buy books, into the go-to place to buy anything, with innovations like next, or even same-day delivery across a vast product range. It repositioned itself as a retailer-cum-wholesaler, offering scale, affordability and convenience to its millions of users. And finally, it turned its sights on the home device market with its monumentally successful range of Alexa-enabled devices. 

Throughout this expansion and evolution of its business, Amazon has used a number of not-so-secret weapons to continue its growth, in the absence of more conventional marketing campaigns. Its web platform is possibly the case study in massively scaled search engine optimisation for an ecommerce site, as it is set up and optimised radically towards appearing in searches for specific products, rather than higher-trafficked “generic” terms. This strategic approach focuses on the bottom of the funnel where its money is made and has psychologically positioned it as the end-point of the shopping journey for most consumers., who will research elsewhere, but end up on Amazon to buy, for its sheer convenience.

This psychological positioning has resulted in consumers increasingly going directly to Amazon as their first port of call when searching for products. In fact, studies have found that more than 46% of product searches begin on Amazon. With this mental primacy now firmly established in consumers’ minds, Amazon has begun to flex its considerable financial and technological muscle, rolling out a wider range of advertising options. This play targeting Google’s bottom line by going after their primary source of revenue (ad spend) is still in its infancy but is only going to increase in scale and importance to modern marketers.

What does this mean for the affiliate model?

So where does this leave the traditional Affiliate model? Under a fairly significant threat, it could easily be argued. While the use of Google search and the traffic it generates for Affiliate partners at the top of the funnel (in online search terms at least) is not likely to go anywhere or diminish any time soon, the more product-driven, purchase intent led volume is already being captured by Amazon. More significantly, a sizable, and rapidly growing, percentage of consumers are starting (and finishing) their purchase journey on the Amazon platform, and the data suggests that once on Amazon, consumers tend to stay and purchase there, with Amazon Prime customers converting at a frankly ridiculous 74% rate. This means these consumers are not even entering the pool of potential traffic for Affiliates. As Amazon’s product range continues to expand, this threat will only increase.

However, with every threat, there is a potential opportunity for those bold enough to take it. There are broadly two possible options for existing Affiliates.

First, they can diversify the range of brands they work with, targeting higher-end and service-led brands. After all, not everything is sold on Amazon, and are not likely to ever be sold on Amazon. By working with these brands, the importance and relevance of Amazon’s disruptive power is massively lessened. This is not necessarily realistic for many Affiliates, in which case a more radical solution is required.

That is to say, the second option is for Affiliates to “ride the tiger” and jump into bed with Amazon, to take advantage of its outstanding conversion rates and enormous user base. What this means for each Affiliate could mean anything from providing tracked amazon links on brand pages to setting up their own Affiliate-branded stores within Amazon’s platform that acts as a third-party storefront for the brands they work with, which means a move towards more traditional retail that the Affiliate model.

Either option is hugely risky, but simply ignoring the problem will not make it go away. One thing that is absolutely certain, and that every Affiliate needs to start taking into account right now is the radical shift in consumer expectations of online experience that Amazon has driven with its website and app experiences. The Amazon site is notoriously fast, with the oft-cited claim that an increase of 1s in load speed equates to $1.6bn in lost annual revenue. Its app provides an equally seamless experience, which has fast become expected from consumers in their shopping journeys. What this means is that Affiliates must invest in high-quality website and app experiences that are as easy, or easier, to use. A great example of this is Quidco, whose app is brilliantly designed and easy to use from an end-user point of view.

In conclusion, the relentless growth trajectory of Amazon presents the Affiliate industry with steep challenges that must be rapidly adapted to, if the threat they represent is not to prove terminal.

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