The initial impact of coronavirus and what it means for the industry 

Hoteliers and airlines around the world have paused their programs. These pauses will be in place until global travel resumes and that obviously affects travel publishers that earn affiliate revenue. Shorter-term, we’ve also seen brands with high demand products enact temporary pauses. Several supermarkets have paused programs for that reason, but as demand eases we can expect that to change. There are fashion brands that have had to pause as they’ve closed warehouses, but alternative fashion brands have kept programs active thus far. 

The other impact has been on supply chains and brands’ ability to stock high demand items. Across almost every vertical delivery windows have lengthened, in part influenced by an increase in e-commerce, but also to ensure brands have time to stock goods in order to ship them. The limited availability of the Nintendo Switch has been widely reported, with new stock selling out as soon as it becomes available.  

These are critical issues, but it should also be noted that while there are changes in programs, less than 200 of 48,500 in Skimlinks’ network have been paused overall. Skimlinks has also added almost 400 merchants since March 25 and several merchants who paused programs two weeks ago have begun to reactivate. There are also clear ways for merchants and publishers to respond constructively. 

How merchants can respond

Pause programs only when necessary. A total pause on affiliate programs can be counterintuitive. Publishers will prioritise brands they can earn commission from and performance in our network has actually increased since lockdown began in the UK. 

So we encourage and are working with brands to limit pauses on programs to only categories that are actually affected by supply chains, shipping issues or high demand. Brands that can maintain their program will gain market share in the long term and reassure publishers that the relationship will continue in the future. 

Seize the opportunity to help people 

This is an opportunity for brands to help consumers get the goods they need. Brands in categories that have not traditionally performed in e-commerce can benefit here. People typically buy Easter Eggs in store, but now demand for chocolate easter eggs is through the roof: Publishers commissions from Easter merchants are up 201% year-on-year, with conversion rate up 122%. As people turn to publishers for advice on where to buy these goods, there’s an opportunity for brands that aren’t traditional e-commerce players to turn to affiliate to promote products, drive traffic and generate sales. 

Combing trending product information with compelling promotions 

The definition of “need” changes weekly. At first, the focus was essential items – e.g. hand sanitizers – but as people adjust needs to change. In the past weeks, we’ve seen different weekly trends from bread-makers to outdoor play equipment to children to video games. If merchants in these trending categories can offer promotions on popular items to publishers they’re likely to benefit from a spike in affiliate revenue. A clothing retailer that launched a jeans promotion achieved a higher conversion rate than during the Black Friday and Cyber Monday peak. 

How publishers can respond: 

Create practical commerce content that helps people 

People need to find items and commerce teams at publishers are ideally placed to help them. For starters, they’re masters at finding products online and can help surface new brands where people can get the goods they need. 

We’ve already seen this with commerce content from publishers focused on hygiene and online grocery orders: The top article related to the virus in Skimlinks’ network focuses on face masks and has generated over four times more commissions than its nearest competition. 

Adapt to changing needs

Publishers also need to know what people “need” at a given time. Demand now changes weekly. The initial focus was items like hand sanitizers or surgical masks, then it changed to online grocery orders, and now people are focused on adapting to lockdown.  Timeliness is key. A publisher that featured a flash sale from a merchant saw a 6.4% conversion rate, two points above their conversion rate during Cyber Week last November. 

This new emphasis on timeliness has led Skimlinks to introduce bi-weekly bespoke communications to publishers, that give them the latest insights on trending topics in our network and updates on affiliate programs. 

We also suggest alternative merchants publishers can feature to get people the products they need and continue to earn commerce revenue. 

Key takeaway 

For merchants with existing programs, the priority should be to limit pauses where possible and surface trending product information. Brands that combine information on trending items with compelling promotions stand to benefit. For new merchants, and those that have not traditionally performed well in e-commerce, there’s a new opportunity for promotion here. 

Publishers need to be more reactive and create timely content based on trending product information they receive. They also need to ensure they redirect traffic and keep apprised of program changes so they can continue to earn commissions. 

The post How Merchants and Publishers Can Respond to the Impact of Coronavirus on Affiliate Marketing appeared first on PerformanceIN.

If experts are to be believed a global recession may be on the horizon. And naturally, as economic speculation runs rife, it also expands into questions about how the advertising industry will respond, and in our case what the means for affiliate marketing and commerce content publishers who drive revenue using it. While the situation remains unclear, one can say that if challenging conditions do arise, commerce-content – where publishers write articles about products and earn commission from brands when their articles drive sales – may be uniquely well placed to weather any coming storm. Here’s why. 

It is a mature and integral revenue stream for publishers

Research last year showed over 40% of publishers generate revenue from commerce. The top publishers now drive 25% of revenue from commerce content articles and further research shows commerce content readers are not only more engaged than pure editorial readers, but that they also spend more time on site and return more often. Per-headcount, commerce teams are comparable to any of the highest revenue driving commercial teams at a publisher and represent a cost-effective investment for publishers. They can also rely on partners in the industry, even in times of economic certainty. Publishers can also rely on partners in the industry. Skimlinks helped publishers pioneer commerce content monetization and is now a profitable platform, deploying new solutions to help publishers seize every growth opportunity the new revenue stream has to offer. Both Skimlinks’ longevity and profitability mean it can be relied upon by publishers to support efforts as they moved forwards, even in times of economic uncertainty. 

Commerce revenue earning isn’t dependent on trending content 

Much of the best commerce content is evergreen. Large publishers can generate up to 40% of their revenue from articles that are over 60 days old. These are typically focused on items that either don’t go out of fashion or are big-ticket investment items. Purchases of that kind are unlikely to be changed by a recession, people tightening their belts as a result of refraining from spontaneous spending due to less disposable income. 

Shoppers will turn to brands they trust 

Trust is a key commodity in commerce content. Publishers can only make money from their commerce content as long as readers trust that the recommendations they make about products to buy are genuine. And in uncertain economic times, as shoppers become more speculative, they are more likely to double down on recommendations they know that they can count on and that should again serve to benefit publishers monetizing commerce content articles with affiliate links. 

Cost efficiency

Commerce content is also likely to appeal to brands as a cost-effective way of putting products in front of high intent customers. Unlike advertising revenue streams, in affiliate marketing, there’s no upfront cost and brands only pay for sales that actually happen. Market leading publishers have audiences who actively seek out their team’s recommendations on what to buy. Investing in affiliate programs, to attract the attention of publishers and convince editors to write about products is likely to remain attractive to brands, particularly as other advertising budgets will likely be the first to go in cost-cutting efforts. 

Commerce is a growing revenue stream 

Over 60% of publishers in a fall 2018 survey said e-commerce revenue had increased since the start of the year. At a time when the effectiveness of other channels is falling, commerce continues to grow and deliver significant ROI for publishers. Attention and investment should be expected to increase as advertising budgets should be expected to fall in the event of a global recession seizing hold. Publishers are intent on diversifying revenue streams and a global recession should only increase the urgency for publishers to pursue this course. 

At this stage, a recession is not a certainty, nor is a smooth path through troubled times for commerce content publishers. But there are signs that publishers and brands can be optimistic about commerce content and its value during a global recession. The name of the game for publishers is diversifying revenue to be sustainable businesses. For brands during a recession, it will be how to get the best return for the least investment. And in both cases, affiliate marketing will provide part of the answer. 

The post Can Commerce Content Publishers Prosper in a Global Recession? appeared first on PerformanceIN.

One of the executives I work with doesn’t buy his own clothes. Instead, his wife does all the shopping. For the two of them, it’s an arrangement that works well; she cares about what he looks like and he doesn’t mind as long as he’s comfortable. And while this works really well for them, it doesn’t help the brand marketer who is trying to target him based on the assumption he buys his own clothes. 

Purchase journeys are complicated

We think that because we know who a person is – boy vs. girl, geolocation, age, etc. – we also know what they care about and what they’ll respond to. In some cases that’s true. Men are most likely to buy men’s shoes, as women are most likely to buy women’s shoes. But this is not always true. 

Look at toys for example. There are some common assumptions here: if you buy toys for kids, it’s likely you’re a parent and if you’re a parent it’s likely you’re under 50. Except on analysis, that isn’t the case: over a third (35%) of people who buy toys don’t have kids in their household and 38% are 56 and over. That means you could miss out on up to 73% of your potential buyers if everyone over 56 doesn’t have a kid in their household.

Don’t be fooled by fakes

Sociodemographic data can be misleading. Built using a small amount of seed declared data, sociodemographic segments are models based off of onsite behavior. These segments typically include lots of bot behavior because they are trained on ads, which means you could end up relying on data from fake cookies and fake people. One way to avoid being scammed by bot data is to rely on transactional data; bots will never buy anything. Validating segments this way enables you to mechanically exclude fake cookies and focus on the people who are actually in the market to buy something.

Target customers for the future not from the past

One point that is often forgotten when it comes to sociodemographic data is that it doesn’t take into account where someone is in the shopping journey. This means segments will often contain people who’ve already bought the product they were initially browsing for and are no longer in need. That’s not an issue where repeat purchases are likely, but it becomes problematic when people only need one item, as in the case of many big-ticket purchases like a refrigerator. In these instances, people don’t typically buy two refrigerators so targeting them after the purchase was made is a waste of time and money. 

The difficulty with sociodemographic data ultimately is that it works on the assumption that we think we know who people are. And as we all know, assumptions aren’t always right, and where sociodemographic data can miss the people who really matter, it’s essential that you make sure to take the intent of the shopper, not just your assumptions of the shopper, into consideration to ensure you’re reaching the people who are genuinely interested in make a purchase. Taking this holistic approach to targeting will improve campaign effectiveness, leading you to higher ROI.

The post A Cautionary Tale of Relying on Sociodemographic Data appeared first on PerformanceIN.

It’s a little-celebrated fact that e-commerce led the growth at the business end of the internet as we know it. Amid all the hype around martech and ad tech, it is easy to forget that advertising revenues are dwarfed by e-commerce.

Global e-commerce currently sits at $1.672 trillion this year. By 2019, eMarketer expects it to more than double to $3.578 trillion. By comparison, total global ad spend hit just over $500 billion in 2016, and will total around 640 over the same period. At the last count, digital was still only about 30% of that.  

Retailers are currently the top digital ad spenders – you could even attribute much of digital advertising’s growth over the years to e-commerce. For better or worse, that symbiosis is also a big part of why the digital ad industry is so inextricably linked with performance spend.

But what are the lessons for advertising in the world of retail? And is there any way that co-dependency can be used to everyone’s benefit?

The devil’s in the detail, or more appropriately here, in the data.

Data disillusionment

For too many people, data sits in the trough of disillusionment, somewhere between ad blocking alley and various walled gardens.

Several years ago, data applied to display advertising – or more precisely what was then called ‘behavioural targeting’ – was seen as a panacea that might fuel the growth of the entire media organisations. No one is making those claims anymore.

The reality, as it worked out, was a little different. Real-time bidding brought some transparency to the world of data-driven display. And you can’t underestimate the benefits of that. But in the shift of focus from context to audience, it also ended up starting a race to which ad company would have the highest delivery frequency and buy the cheapest inventory – sacrificing user experience in the process on the altar of good last click performance. What we ended up with is a lot of disgruntled users, juicy margins for middlemen, questionable incremental revenue for retailers and a big hole in the middle of publishers’ revenue forecast.

And although some would still have you believe activities such as retargeting in its current form is a silver bullet for retail, I would say consumers have voted with their feet – look no further than the correlation between searches for ‘ad blocking’ and retargeting.

The original native

Alongside the growth of display, another less publicised business that grew up in the wake of e-commerce was affiliate marketing. While it suffered from growing pains of its own along the way, it is now emerging as a renewed area of focus for many of the smartest publishers on the block, from Business Insider to Buzzfeed and Vox. All are embracing ‘comtent’ or commercial content. Why? Simply because they are always looking for smart, data-driven ways to monetise content without alienating their audience. And in a sense, affiliate marketing is also being rediscovered as something akin to native advertising – fitting seamlessly within the user experience, through well-researched, relevant and useful links to products people want to read about, and often buy too.

In fact, ‘comtent’ is probably more akin to search than display in a number of ways – live and unobtrusive, well-researched and relevant, it may even be useful to the user – the holy grail as far as commerce goes.

But what is currently most exciting about this area is the data perspective. At the cross-roads of publisher, retailer and shopper, the combined insights of environment and intent tell us all kinds of fascinating things about who buyers are. Not just what they looked at while on a retailer’s site, but also what else they read, which brands they feel close to and what else they want to buy. And that’s just the start.

Winning factors

Terry Kawaja, CEO of Luma Partners calls out two things as key for winning in advertising and marketing: one is the accuracy of first-party data, and two is the “right time decisioning” of that data.

We couldn’t agree more but think that combining both requires a very special kind of approach that we do not see enough in the third-party data space: focus on declared first-party data at scale delivered in real time. Despite all the hype, you’d be surprised how a lot of the data out there still isn’t ‘real-time,’ yet when a lot of products sold online are impulse purchases, being real time is the key to succeeding.

Implementing this approach successfully requires to involve publishers, advertisers and agencies, as well as thousands of our customers. All are now contributing to what has been a massive development project, Skimlinks’ audiences co-operative.

As well as affiliate marketing and ‘comtent’ being a great additional revenue source for publishers, we firmly believe the marriage of content and commerce can bring a smarter, more creative approach to advertising. And one that benefits all parts of the chain, not just a few links in the middle

So there you have it: e-commerce, data, advertising – in that order.

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