With 92% of Americans always looking for a deal, it’s no secret that US consumers like to save money. However, research and industry experience shows that simply lowering the everyday price of your products isn’t enough to keep today’s smart shopper happy. They expect more. They want to feel like they have discovered the best deal, especially if they perceive that they obtained a discount which isn’t readily available to other consumers. This is, of course, where nuanced coupon strategies come in very handy. But first, let’s look at the internal factors at play.

Coupons and the cuddle chemical

Those who have heard of oxytocin are more likely to associate it with significant life events such as the birth of a child or getting married. The hormone, sometimes called the cuddle chemical, is released in everyday situations such as when we share hugs and kisses with those we love, and during moments of social bonding.  However, research from neuroeconomics expert, Professor Paul J. Zak highlights that the love hormone is also present when smart shoppers receive a coupon. His study found that participants who received a coupon experienced a significant boost (38%) in oxytocin levels. In addition, they were found to be happier (11%) than participants who didn’t receive the offer.

Even though consumers expect to find a coupon nowadays, this effect continues to come into play. Interestingly, the level of the cuddle chemical also rises when users receive likes and comments on social media platforms such as Instagram.

Price, brand and self-image

Research from the Association for Consumer Research suggests that ‘smart-shopper feelings’, which can result in excitement, self-confidence, satisfaction are highly likely to increase and intensify when the consumer feels a sense of control in the process of obtaining a discount. 

A number of studies have found that consumers experience increased satisfaction when they receive a discount of 15%, for example, in cases where they felt responsible for having found the deal themselves rather than getting the same offer as a result of pure luck, or another factor that is out of their hands. Finding the best deal can elicit a number of responses in shoppers. For example, they could feel ‘proud, smart or confident’ (Holbrook et al. 1984), Or there might even be a feeling of playing the system, which can be quite thrilling for consumers. So we can see that, that the perception of paying a lower price can have a positive impact on the way we view ourselves. When we combine this insight with what we already know about millennials and their shopping habits, this creates an incredibly fruitful opportunity for advertisers. 

As well as making purchases that are informed by an expression of their personalities, millennials are also open to trying new brands. While previous generations may be seen as creatures of habit, coupons further encourage millennials to try new products and experience new things.

Consumers want more than everyday low prices

While common sense suggests that shoppers prefer regularly low priced goods, real-life examples tell a different story.  When the now former JCPenney CEO, Ron Johnson, took the helm in 2011 he decided to simplify the company’s pricing structure. However, introducing an easy-to-understand everyday low price strategy didn’t have the results Johnson had hoped for. Just a year later, J.C. Penney saw its sales slashed by 25% and experienced a $1 billion dollar loss. Not only did this strategy fail to win over new customers, but it also turned off JCPenney’s existing customer base. Shoppers want the thrill-of-the-chase feeling that they get from finding the best deals through coupons, with a more static approach to pricing this excitement simply ceases to exist. This highlights what we know from industry research: as well as attracting new customers, coupons keep them coming back. 

As an aside, it hasn’t been all doom and gloom for Johnson. According to a recent article, he’s now one of the most well regarded retail analysts in the US. 

What this means for advertisers

Getting a good deal is about more than cost-savings for customers. As I have previously discussed, coupons are proven to add value for advertisers in a number of ways. Carefully targeted coupon strategies make a positive impact on smart shopper behaviour. They encourage savvy consumers to buy in larger quantities and from brands that might not ordinarily be on their radar. Coupons enable shoppers to experience new things and try new products, which presents the opportunity for advertisers to gain incremental sales. We also know that shoppers who are introduced to a brand through a coupon are more likely to be return customers and develop brand loyalty.

All of this adds up to brands having new opportunities to reach new customers while helping shoppers get the best deal and feel a little bit happier in the process. Everybody wins.

Do you have an exciting performance marketing campaign in the US region that should be recognised on a global scale? Download the entry kit today and enter for a chance of winning an International Performance Marketing Award.

The post The Real Reason(s) Why US Smart Shoppers Love Coupons appeared first on PerformanceIN.

Recently I took part in a panel debate on the subject of voucher codes and whether they add value to affiliate marketing. As it’s not the first time this has been a topic of discussion in the performance marketing industry, it got me thinking about the reasons why it has come up again.

There are some in the industry who believe that voucher codes are simply gaming the last click attribution model. They contend that affiliate networks and advertisers do all the work and voucher code companies reap the rewards. However, this does little to recognise the impact that well planned and executed discount code strategies can have.

A proven model: 100 years of voucher codes

Money saving vouchers have a long and established history in print media. For over 100 years, advertisers have disseminated them through media houses in order to grow their customer base and build brand loyalty. One of the reasons why this works is because publishers provide advertisers with access to a mass audience in a brand-safe environment. Now, the ubiquity of digital means advertisers have a renewed opportunity to achieve increased visibility and reach a new audience of savvy consumers who invest time and research in order to make the best choice.

Voucher code use is increasing across all demographics

The demand for discount codes is growing. According to industry estimates, 31 billion online discount codes are set to be redeemed worldwide in 2019. It is an accepted fact that smart shoppers in all age brackets and demographics are looking to make the most of their money. Eight out of 10 millennials use voucher codes when shopping online and a third reported that they use them frequently. With millennials earning less than the previous generation and less than they expected, it’s no surprise that they are savvy consumers. However, older people also use discount codes too.

Voucher codes positively influence consumer behaviour

Discount codes consistently carry smart shoppers over the line to the point of purchase and give them the last incentive to buy. When voucher codes come into play, smart shoppers buy products sooner, buy more and buy from brands that they wouldn’t have necessarily considered initially. In fact, research from inmar has found that 83% of respondents changed their shopping habits as a result of a discount code.

Incremental sales and building loyalty

We know the assumption that consumers go to advertiser sites, put items into their baskets, look for a code and return to the advertiser site to complete the purchase at a lower value is in fact faulty. However, there is empirical evidence that shows sales that follow the use of voucher codes are not sales that the advertiser would have benefitted from anyway. A 2018 study conducted by Google and comScore show 94% of customers were not on an advertisers site prior to finding a voucher code.

This is further evidence that supports the view that voucher codes lead to incremental sales – which is the crux of this issue.

Recently, in a number of markets, we’ve seen advertisers abruptly decide to stop working with voucher code sites, giving the market little time to respond or to even put our case to them about the detrimental effects this might have. In the past, advertisers who have stopped working with voucher code partners have seen a significant negative impact on overall sales. However, the risks of halting a voucher code strategy are wider ranging than losing immediate sales.

Research from Google and comScore reveals that the use of discount codes has a longer-term impact on shopper behaviour. As well as being more likely to convert, consumers who use voucher codes are returning customers who are likely to spend more and are more loyal to advertisers.

How advertisers can develop an effective voucher code strategy

Advertisers, networks, and voucher code partners need to work closely and collaboratively to help drive the market and develop strategies to help push sales forwards. We understand that offering codes with no expiry dates, for example, can lead to senior management seeing voucher codes as a “blunt sales tool”.

However, as we have seen, using a more targeted and sophisticated approach is likely to yield better results. Advertisers can find their voucher strategies to be more fruitful when they employ tactics that increase the average basket value, or when they offer gift cards, provide access to exclusive content, which is behind a paywall, following the purchase of a specific product or use voucher codes to optimise stock.

Think about your affiliate marketing efforts as a football team, with voucher code sites acting as the striker. If advertisers are the managers of the team, then they should want to work with the striker to score as many goals as possible, working collaboratively with the whole team to help score more goals than the competition. Work transparently and openly with your strikers to achieve the best results possible.

The post Why Voucher Codes Add Value to Affiliate Marketing appeared first on PerformanceIN.

The Competition and Markets Authority (CMA) is looking into the way price comparison websites operate and whether consumers can trust them. This isn’t the first time that they’ve done this, and the last time raised a few questions, but I’d like to look at two fundamental points.

Should price comparison sites be more transparent with consumers?

Questions have been raised over consumers not necessarily being aware that price comparison sites – such as those comparing broadband, energy and insurance – make their money from commissions when they refer a customer. 

This strikes me as a similar scenario to that of ad blocking; the consumer is getting a service but does not neccessarily know, or care, how it’s funded.

The main issue is that consumers assume they are being shown the deals with the cheapest prices, which is not always the case. The rise in the amount of choice available to consumers spurred the growth of price comparison sites, but it is unclear why this success hasn’t been replicated in more sectors – something the CMA’s investigation will look into. 

Interestingly, a 2012 YouGov survey found that 30% of people don’t realise that price comparison sites are paid by providers when a switch occurs. 

Many people don’t realise these websites are commercial organisations that spend millions of pounds on branding activities, such as TV advertising, which they have to make money to fund. 

The latest ruling means that sites don’t have to give a full market overview, but if the consumer isn’t able to find the best price in the market, can we really call them price comparison sites? This ruling means those that don’t provide a full market review are “aggregators” that pull together selected offers, rather than “price comparison” sites. 

As a result of the CMA’s decision that they don’t need to give a full market review, I think price comparison websites need to become more transparent, either telling consumers upfront that they are not showing deals from the entire market, or provide a full market review that includes the deals they don’t make a commission on. 

A consumer or business review?

This investigation comes just months after the CMA made the controversial decision that price comparison sites do not have to show the cheapest deals and can just show the deals that they make a commission on. This is a reverse on an earlier decision by the Energy Select Committee that sites should show a full market overview. 

If it’s not the best price, price comparison sites need to make it clear what they are offering. These websites should bear in mind that Tradedoubler’s Digital Connections study found that 68% of European consumers feel their privacy is compromised when information is collected without their knowledge. Consumers don’t necessarily understand the commercial business model of comparison websites and this needs to be made clearer and more transparent to avoid misleading customers.  

Trust is essential to secure the future of price comparison websites, which came about because consumers did not trust the service providers, and trust is based on transparency. At first glance the CMA’s ruling earlier this year doesn’t appear to be in consumers’ interest, but perhaps this latest investigation will bring about transparency and standardisation. 

Read more from our PI Columnists here

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I’m sure you’ve all heard a lot of facts and hypotheses over the past weeks from some very clever people, regarding the threat of recession, regulations, investment in the UK and the technology sector. I think it is worth concentrating on a few key points that relate specifically to the performance marketing industry: talent retention and potential changes to consumer shopping behaviour.

Before we do, let me just clarify that Tradedoubler is an international company, with a good portion of our workforce in the UK having been borne outside of the UK. We speak 18 languages natively in our Telford office and in the London office we have a huge contingent of French, Italians, Danish, Spanish, Brazilian, Greek – even Scottish – employees, and I believe our workforce and output is better off as a result. Sometimes it feels like I’m back living in the 16th arrondissement of Paris – and I love it. 

Retaining our talent

With regards to talent, I believe we’ve done really well as an industry over the past 10 years to recruit and retain some amazingly skilled people. Opportunities within the UK marketing and tech sector have been thriving and in the start-up world we’ve seen massive inward investment. However, will that remain if we are outside of the EU? 

If the pound stays at its current post-Brexit level, labour in the UK will be cheaper, which will attract investment in the UK. But with regards to regulations, if we suddenly do not have the ability to offer companies the surety that the UK regulatory system is the same as the EU, this will undoubtedly make alternative tech hubs, such as Berlin, Paris & Madrid, more favourable. In the UK performance marketing Industry, it is not immigration that we should be watching out for, but emigration.

Consumer behaviour 

The other area that I think is interesting is consumers’ reactions to the impending Brexit, and how their shopping habits may change as a result. Many people are talking about recession, tax rises and falling disposable income, this will inevitably have an effect on advertising levels and probably lead to a shift towards performance metrics. This is obviously great news for our industry; TV companies will trot out the usual marketing to brands about how Smiths Crisps didn’t advertise during the recession and Walkers advertised on TV, growing their market share and eventually buying Smiths Crisps – but technology advancements, Internet of Things and the digital industry will surely all gain advertising budget. 

However, it is how consumers interact with brands and how they go from first seeing an advert to buying the product, in-store or online, which will be interesting to watch. At Tradedoubler, we’ve seen average order values (AOV) placed on tablet devices overtake desktop devices back in Q4 2015 – and we saw initial click to conversion times decrease at the start of 2016 – but how will consumers change the way that they buy? Will we see an increase in use of vouchers, or more people buying online when they’re instore to see if they can get a better deal? 

What is evident straight away is that marketers will need to have real-time access to full user journey analysis and be able to optimise quickly and effectively to take advantages of emerging consumer behaviour trends.  

Lastly, let me say that I didn’t vote to leave – it’ll create some very interesting times ahead, which will change the way that marketers interact with our industry. I do think that Brexit will change the way that the industry operates as a result and what we all concentrate on in the coming years.

The post Dan Cohen: The UK’s Performance Marketing Sector Post-Brexit appeared first on PerformanceIN.

Back when I started working in affiliate marketing at a network in 2005, I remember a constant schedule of meetings and introductions to new publishers who wanted to show the account managers and advertisers their new websites, or technology. 

I remember when we had Quidco into the office for the first time and being genuinely excited about what this opportunity could mean for our clients and for the industry. 

Fast forward 11 years and new, weighty publishers are harder to find, and instead of coming direct, it is up to networks and advertisers to go out and source them. 

Why the shift? 

Affiliate Marketing was always a great route for start-ups, as the industry is a sandbox of great ideas when marketers don’t know where else to put them! Obviously our market has matured, so we can’t expect to hear from hundreds of new high-profile publishers every day, but the current rate worries me. 

I’m hearing more and more from advertisers that finding the next big source of traffic is a challenge, so even though a start-up might not be able to prove their value up front, clients are willing to listen, which is positive. 

Today, large organisations’ internal teams are more structured than they used to be, making it easier for a start up to gain access to clients via alternative routes. Technology has also helped speed this along, advertisers tend to have some form of analytics on their sites that allow new traffic sources to be easily integrated and valued.

However, from my point of view the problem is bigger and goes back to peoples’ perception of the industry. 

A start-up is usually a fast paced, innovative, disruptive environment and not one I’d suggest is synonymous with affiliate marketing. Although the IAB has done good work in quantifying our industry, we still do not project the right image to most CMOs.

Tradedoubler has re-started its Zoo Project, which launched in 2012, designed to nurture start-ups and this year it also launched TD Ventures, our business accelerator investment fund.

Other networks have contributed to driving industry growth by trying to introduce new traffic sources, but it is not enough, we’re losing momentum in the start-up space. Our industry is growing, but not as fast as other channels within the digital arena.

Why write this column? 

I believe that if the industry doesn’t start welcoming new traffic sources with open arms, we risk losing some of our entrepreneurial spirit. 

We need to create environments where start-ups can thrive – maybe the recent moves towards showing the full user journey can show the value and influence performance marketing channels can add and reward these influencers for the roles they are playing. 

Secondly, if you’re a start-up, I urge you to harness the technology that is available, speak with the networks and clients regularly, pitch your idea.

Read more from our PI Columnists

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The increase in digital marketing activity has resulted in an avalanche of data. In fact, a recent study by IBM found that each day the world creates a shocking 2.5 quintillion bytes of data. This provides marketing professionals with an advantage – but also an analysis challenge — when it comes to understanding their target market. Harnessing data to gain actionable insight will prove key to marketers’ success in 2016. Using insights into their customers’ online behaviours, marketers should focus on the following five areas to produce and measure results during the coming year.

1. ROI must be demonstrated

Research by ZenithOptimedia shows that by 2017 the internet will be the biggest advertising medium in 12 key markets, which together represent 28% of global ad spend. As more brands move their budgets online, the simple economics of supply and demand will come into force. Online advertising is still relatively inexpensive, especially when compared to TV, but as demand increases I expect online advertising will become increasingly expensive as brands compete for consumers’ attention. If marketers are getting less for their money, there will also be increased pressure to invest in the right places.

2. Delivering content effectively remains vital

In 2016 marketers need to stop thinking ‘channel’ and start thinking ‘consumer’. Marketers are often guilty of placing too much focus on separate channels, whether that is social media, print or in-store branding. Consumers don’t see brands this way. For a consumer, there is no distinction between channels; communication channels between a brand and its customers are entwined in a complex relationship that often demands a two way conversation. Marketers need to adapt to this way of thinking and develop content that reflects how their customers want to interact with brands across different channels. As Steve Jobs once said, we need to ‘create relevance not awareness’.

3. The importance of mobile advertising

More Google searches now take place on mobile devices than on computers in ten countries, including the US and Japan. Brands that are not yet taking mobile seriously need to take note. It’s surprising how many big brands still haven’t mobile optimised their websites and those that have often neglect to optimise their entire online shopping route. This results in many lost customers simply due to poor user experience at the point of purchase. Ensuring the customer journey is viable on all major devices is a basic requirement for all brands.

4. Sources of traffic will widen

Wearable tech has been on the news agenda for some time and although adoption has been relatively slow, we expect that marketers will start to take these new channels more seriously during 2016. The ‘internet of things’ will continue to be a theme with tech getting smarter in general, including white goods like smart-fridges. With the pool of devices available in the digital marketing mix growing, the amount of traffic will widen. Marketers need to ensure they allocate their digital budgets to the right channels and use customer insights to optimise across devices. Affiliate programmes present a huge untapped opportunity for high end brands which is sure to gain momentum in 2016.

5. Bridging the gap between online and offline

Not only do marketers need to think holistically when planning their activity across multiple digital channels, they need to bridge the gap between their online and offline marketing. Not simply regarding tone of voice and branding, but the user journey between online and offline. Click and collect is a prime example of how user experience doesn’t stop at the online checkout.  According to our research, between a quarter and a third of people go online while in store to look at reviews and price comparison websites, among others, which is why it’s so important to ensure you’re reaching out to new or existing customers via all possible touch points.

From prioritising content to investing in mobile, it’s clear that there are steps that marketers need to be planning for now. The clear themes that will emerge in 2016 is the importance of measuring success in digital, mobile and performance marketing, as well as the need to use data to target customers in the right way at the right time to maximise impact of digital marketing activities.

The post What Trends can Digital Marketers Prepare for in 2016? appeared first on PerformanceIN.

Retail e-commerce is predicted to increase by 12% until 2016 and online advertising is estimated to grow to take a 31% share in advertising spend in Western Europe by 2016. The market is extremely buoyant, so what affiliate marketing trends will be helping to drive this growth in 2014?

1. Affiliate marketing will move up the value chain

Affiliate marketing is about paying for performance, so budgets that are spent on affiliate marketing have a proven return-on-investment. This alone gives affiliate marketing a rightful place on the c-suite agenda, but it’s our responsibility to educate these stakeholders on how they can drive the most effective ROI.

To educate, we should adapt their current affiliate marketing model to address today’s multi-channelled, always connected consumer. From social, to direct marketing and advertising, affiliate marketing will become more deeply integrated into the overall marketing mix.

2. Integration between the online and offline

The interesting trend to watch out for will be the growth in integrated on/offline traffic, and how the smartphone will be the connector to bridge the gap between the on/ offline world.  Consumers will continue to embrace social, video and offline (for example, pay-per-call).

It will be more important than ever for advertisers to be able to track the diverse path that a consumer may take in making a purchase. Add to this, the growing demand for local affiliate marketing with geo-targeted vouchers and deals, and understanding the user journey and their path to conversion better is suddenly critical.

For example, geo-targeting tells the advertiser exactly where the consumer is located, so they can send tailored online offers.  Geo-targeting also helps advertisers to segment their user base, and dynamically change the advertising message they want to send to consumers to increase their chances of a sale.

Advertisers will more than ever have a whole conversation with their consumer, from offline to online and vice versa. Also, advertisers will be able to fully track how effective their advertising campaign was from initial engagement through to the close of sale, thus providing full visibility and accountability for their advertising investment.

3. Data will help understand consumer journey and lifetime value

In 2014, the affiliate marketing channel will be about understanding the whole user journey, not just what the customer did at a certain point in the purchase path. Having the data to understand how the customer first started their engagement and where they ended it will be crucial.

Advertisers will need to know what advertising medium consumers were influenced by, to what extent that medium influenced them, and at what point in the purchasing decision – was it while checking out a promotion on their smartphone, watching a video, reading a newsletter, participating in a social forum, or across all of these activities?

Likewise, advertisers will be able to use the data to analyse how to get value out of the consumer in the long-term (by educating them through ‘long-tail’ channels such as blogs and newsletters), as well as in the short-term (through initiatives like voucher codes and cash-back).

By having the data on the lifetime value of a consumer – across multiple channels and devices – advertisers will be able to make intelligent, insight-based decisions, so they can become more effective at new customer acquisition.

4: Consumer engagement trends will dictate pricing models

Affiliate marketing will continue to embrace the traditional pricing models, such as CPA and CPL. However, as advertising campaigns evolve we will need to incorporate CPE (engagement) and CPV (view) into the pay-for-performance mix, to accommodate consumer engagement trends. Marketers are including a broader mix of marketing mediums into their digital advertising campaigns, to include video and social for example, and are also keen to optimise campaigns with re-targeting.

So, the technology needs to be in place to: track variable traffic activity, set the parameters for the ‘cost-per’ type prior to the campaign commencing, and accurately charge for it.   For the advertiser it’s about being able to effectively manage their budget with maximum insight, have presentable metrics, and prove the return-on-investment through an increase in sales. It’s the responsibility of our industry to have the technology in place to accommodate the expanding and variable cost models to support this.

5. The industry will become more regulated

Over the past few years the IAB Affiliate Marketing Council has done a lot of work to bring the industry forward under some charters, regulation and codes-of-conduct. However, more must be done to formalise the industry rules and approaches for new entrants, to ensure we future proof this industry. This means implementing an accreditation programme, with a regulated audit process for guaranteed compliance. By doing this and working closely together, advertisers will place their trust in affiliate marketing networks and publishers so we gain our rightful credibility in the industry.

The post Five Fascinating Affiliate Marketing Forecasts for 2014 appeared first on PerformanceIN.