Monday, 4 November 2013

What next for the affiliate industry?


Okay so firstly it's been a while since I've been involved with the industry directly, but I think that gives me a perspective few have when it comes to performance marketing.

Hopefully below gives people an understanding of someone who's been in the industry, come back and seen what's changed and where I see it progressing.

I hope a mix of people will comment to give their opinion, after all that is all a blog is, my opinion on anything I decide to write on. Quite often I may be wrong, other times I may prove insightful in a positive way.

So what's changed in the affiliate industry?


The Name

For starters it's no longer the affiliate industry but Performance Marketing. Everyone I speak to who's been in the industry a while still calls it affiliate. I can see the change of name and the justification for it, but to quote Shakespeare "What's in a name?


"What's in a name? That which we call a rose

By any other name would smell as sweet."


well firstly it's not just about CPA any more. The industry has adapted to changing online technology, consumer behaviour and affiliate sites have seen the opportunity doesn't just lie with CPA any more. Many have shifted their focus to build a brand in their own right with smaller affiliate building a database of users and able to approach advertisers for newsletter inclusions and advertising space to help them push their offers, brand and campaigns further. Ultimately this has allowed many publishers to still function as a business.

Affiliates now help with reach... it's not just incremental sales any more. 

Fagin's program had many young publishers
There is also the argument the term 'affiliate industry' made it sound grubby and under hand. There are still plenty of rogue affiliates out there with many sites like Smart Insights showing how to pick these up in Google Analytics and other methods.`

lets be honest online advertising channels are merging, through changing habits, multi device and also the fact that many sites which started out as affiliates are indeed their own brand, advertisers and offer transactions on their own website.

Just look at Go Compare, huge spender in online advertising in the UK in 2013. The entire concept of comparison websites were from the affiliate industry were they not? You could argue Travel Supermarket were their first, but I think (and correct me if I am wrong) they began as the industry was already up and running and I know they had trackable links on their search results years ago.


The Growth


Affiliate industry is growing a lot

well no shit sherlock

You might as well put IAB predicts something obvious but just needed the research to prove something obvious. 

It sounds like something out of Blackadder and to be fair the channel does seem to be viewed as Baldricks cunning plan when talking about spending marketing budget to get a decent RoI, but it's been around for years and I cannot believe the cretins which aren't involved. 

Shanghai a simile for the affiliate industry?
I am not trying to belittle the research because there's a lot of it and some very detailed and very insightful. but really that's your big nugget of information?

I know the figures is there to be a sort of hand waving gesture to the audience not aware of affiliate marketing. But to be honest the hand waving gesture I'd offer would be very different.

Can someone tell me why you wouldn't have an affiliate program?

Google enjoying the rise of PPC
Forget about the fact you can justify apportioning marketing spend to other channels which are working, affiliates will always work, it may not deliver the volume you are expecting. Well that's to be expected because the reach is less than spending £XX,XXX on PPC on a search engine where 80% of the worlds fucking traffic goes through it. 

Anyway back to the point about growth. 

25% of advertisers spend 20% or more on affiliate marketing


the research tells us 77% growth last year with an expected 71% increase this year. I BET you it's more than that especially with "experts" saying the recovery is going to be with us in about 6 months time. The 6 months they've been predicting for the last 2 years. 

Interestingly though the report says that 1/4 of respondents to the research said that 20% of their budget went to affiliates. Bet you that's industries where comparison sites feature heavily, but anyway I imagine there are smaller advertisers in other sectors who have similar spend.

And don't get me started on comparison sites. I had a go at advertisers before about them being too naive about cashback sites, well comparison sites it's even more apparent.

If they didn't have such bloody complex products that no one fucking understands there might not need to be for comparison sites.

anyway...

Shut up Dan and get your hair cut
Whilst gambling websites rely on incentive offers, I think they won't be anywhere near 25%, not with that cockney middle aged Henry VIII telling me to "get me laptop and mobile out" every 15 minutes on Sky Sports. I bet they vomit their affiliate marketing budget Sky' way every week. and ITV, bloody morons. 

I am not trying to be some Russell Brand off the cuff, marketing predictor mixed in with a bit of comedy banter, I am merely trying to type this post as my mind says it, removing silly quotes and as much swearing as possible. 

So to sum up the growth, yes it's there, in bucket loads, but everyone knew that right?

Oh apart from people who have to Google what affiliate marketing is, well they can fuck off, especially if they are working in an online marketing role.

The following video explains affiliate marketing.



Professionalism

Not one of these spotted at PMILDN13
Seriously does no one wear combats and t-shirts to these things any more?

Performance Insights 2013, which I wrote about in my third post on this rather crummy looking blog, showed me how much experience the industry had gained. 

The one thing which I value most, is the ability to speak to people about advice and thoughts, who otherwise I would never get the chance to meet, let alone speak to. 

How many times in a working year can you say you can go somewhere and speak to people and in less than 5 minutes have the ability to fix a multitude of issues and potentially gain a shed load of traffic and revenue?

This happened throughout the conference, all with shirts and ties on and everything. 

I am wearing this next year
I did see a LOT of jeans and blazers combinations. If I ever do that can someone please slap me across the face and stop dressing like a 90's dad. Nothing wrong with it, but just not me. Perhaps when I hit 40 that will be my look.

A large part of the professionalism which has come to the industry is down to the publishers. No longer websites with an inferior design, albeit with better content than many advertisers, lack of insights into user behaviour and inability to develop as fast as they need to, the tables have turned completely. 

Technology and developments by businesses and individuals all based around the affiliate CPA model. I cannot imagine comparison and voucher sites came about because of a gap in shopping habits online when it came to users finding information. It came about because:

"wouldn't it be nice to build this website because it would make online consumers lives much easier, and then we can drive traffic to the right places and make lots of money". 

I think the second part of my made up quote is why they were developed. Yes without the first bit it's a bit of a waste of time, but without the second why bother?

If we want to help as many people as possible for free we'd all be dealing with Groupon right?

So much of the web now we take for granted when it comes to online purchases, (and looking back) much of it is down to this industry with the more recent in roads made by publishers not networks or advertisers. 


The Future

Okay so the future is still Attra-fucking-bution but at least we are getting closer according to a few presentations at PerformanceInsights. 

I'm sorry sir, we just don't have the (data) Power
I still think without the industry as a whole to share their data and understand the channels true place in the mix of advertising spend, attribution will work. 

A lot of trying and not a lot of doing

The industry needs the equivalent of CERN, some fuck off expensive project where all marketing data is collected in one place and shared out for everyone to understand their place, all controlled by an overarching organisation to maintain secure and anonymous data management. 

Sounds fucking mental right?

but how is it going to work otherwise?

How will a network know whether sales were truly incremental and where the user really had a significant interaction with the multitude of touch points and say YES, That lovely little site deserved most of the credit. 

I am no developer, data analyst or tracking expert, but just from my viewpoint of being this affiliate double agent, it seems there's a lot of trying and not a lot of doing when it comes to attribution. 

Apart from the A word, the future for the industry lies in what I touched on before, Growth. I echo the points about the industry and publishers moving away from simple transactional CPA but to lead generation, user registrations, segmentation publisher side and more targeted campaigns. 

The ROI is going to increase but I think marketing spend overall will go down.

Cost of sale is something I always work towards, it's just in my nature now, my marketing DNA. I don't understand the concept of brand spend. Throwing money to get your name in expensive places. I need to work on that part of my understanding. 

The future of performance marketing is also to educate the rest of the marketing audience that it's there and it's something to be considered within a marketing plan.      

Networks will bare the brunt


Networks will bare the brunt of the storm I feel with publishers getting larger and role reversing some relationships with advertisers. 
Advertisers will get pissed off because however small, they fund the industry. The HR manager at Manchester United gets paid in a decade what Rooney earns in a week, but he can still cancel the payment can't he!
Networks have opportunities with
many smaller industries and advertisers

Part of the solution is to make the route to affiliate programs cheaper for smaller brands and advertisers, particularly some niche industries which are still traditionally offline. Independent tracking companies are enabling people to do that, but you really need to know what you are doing.

What do they say, look after the pennies...


Google are bastards

Sums it up nicely doesn't it.
Laying it on the line, industry beware, Google is trying their best to absorb whatever it can from you.

Comparison portal for car insurance now present on Google search results

Comparison portal for travel insurance.

Tiny little additions Google have been trying for years to get right and present to their visitors instead of you. 

The fact that their affiliate network died on it's arse, was because it had about as much resource as KFC has late on a Friday night. All the customers but no one to serve them and no one answering the drive through either. It was their attempt to muscle in on a piece of the pie and they failed epically.

If they had the balls to do it properly they should just buy a network like they did with Double Click for online display. But they won't, because they've been burned already and that's great because it shows this giant online corporation is fallable, even in an industry who's success is largely down to their own creation.

Isn't there a greek myth about the Titans, and their children ended up killing them off? 

They have, like Yahoo before them, been instrumental in the growth of online marketing and the world we live in today, but make no bones about it THEY ARE NOT YOUR FRIEND. 


They used to make a big deal about their motto "Don't be Evil". You hear jack shit about that now do you. 

But sooner or later they will trip up. History has proved this time and again. 

If they hadn't have bought YouTube they'd be sitting way down the list in that part of the internet, you could argue would YouTube be as big without them, probably not but look at Facebook. Once belittled by Google they now partner with them.

I would watch Twitter too, they could cause Google problems. Just from my own interaction with Twitter for real time results for news, local information it's way faster than Google. Google plus won't do crap to shift that user interaction either. 

If Twitter can offer a more customised visual approach to their platform and the ability to integrate notifications across devices then they could be onto a winner.

Cookies and the Law

The EU own website doesn't have a cookie
statement FOR FUCKS SAKE
Something I know little about in detail but welcome people to correct me on whether or not the following statement is true. 

The EU are trying to place a law on something they know nothing about, which could actually cause significant damage to their own revenue (taxes) let alone businesses and consumers. 

Are they that fuck dumb that they would risk removing their own revenue in taxes from the online advertising industry and everything else they earn down the chains which would be affected by it?

There's no way anyone, even Search Engines would switch off this capability. 

Consumers would be worst hit, because you cannot communicate to a closed group of users who have opted into communicating with you. They won't get any offers or promotional activity. 

Also it doesn't work offline does it. 

I cannot un hear some shitty made advert on Talksport when I am driving unless I turn the radio off. 

I cannot un see an awfully produced billboard advert.

Why should it be the case online?

if you don't want to see adverts which are personalised to your behaviour online then turn off the computer and do what you need to do with books or something. 

AND FINALLY

Consumer behaviour is driving a lot of this any way isn't it. People don't want general adverts thrown at them all the time. They want targeted, relevant information, real time. 

So the EU can go back to being idiots at other things. 




Right i'm off to play Farcry 3 and shoot some people in the face to the Predator theme tune.