Affiliate marketing and behavioural targeting

March 13, 2009 | Affiliate Marketing

Hello there Stranger! If you are new here, you might want to subscribe to the RSS feed for regular updates.

Something that caught my eye earlier today was Matt Wood’s post on Behavioural Retargeting and whether or not Affiliates should still get a slice of the action if the consumer has been targeted following a visit to an affiliate site. Is one taking advantage of the other or is it all fair game?

If I’ve understood Matt’s argument correct I’m not sure I exactly agree with this as a suggestion. Unless there’s a weighted CPA mechanism in place to reward all channels that are assisting the sale then it should still be last click wins regardless of whether this user has been retargeted or not. Of course the argument is always where do you draw the line, do you include email, dispaly, tv?

More often than not 10’s of thousands investment go into testing, behavioural learnings and optimisation even before this type of targeting can generate a return for the merchant or an acceptable CPA. If in Matt’s example an affiliate wasn’t able to covert the sale in the first place but the company carrying out the retargeting was then who should be rewarded? I’m inclined to say the latter.

What if it was affiliate vs affiliate where the customer visited affiliateA before finally buying via affiliateB but affiliateA was running a website and affiliateB was retargeting. Would you consider affiliateA as an assist and reward them a % of the commission? Wouldn’t this just take us back to cookie stuffing where affiliateA could simply try to grab a slice of every sale regardless of whether they were the last click of not.

Furthermore, when retargeting, the messaging and consumer offer often change with the merchant increasing such things as discount or increased incentive to buy. This can happen on multiple levels as the merchant increasingly temps the customer to buy. This obviously impacts margin so would there even be room to pay commission on top of this?

I don’t think there’s an easy answer to all of the above but it’s good to see that many people are aware of what’s going on and constantly trying to discuss new and interesting ways to fairly reward defined actions across multiple channels.

Of course, in the meantime there’s nothing to stop affiliates from using networks or media owners to try a bit of retargeting themselves. After all it’s just another form of driving sales as you would do via paid search or social media, just a different mindset you need to tailor you message towards.

The guys at Specific are very good at this and have a great little retargeting video if all of the above made absolutely no sense to you :)

Thanks

3 Comments

Chris T
Mar 13 at 5:03 pm

Hi Paul,

http://www.google.com/adsense/support/bin/topic.py?topic=20310&hl=en_GB. So.. . Google’s Interest-based advertising will allow advertisers to display ads based on a user’s previous interactions with them, such as visits to advertiser website and also to reach users based on their interests

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- Paul Wright
  Mar 13 at 6:00 pm
  
  Hey Chris, thanks for the extra info. I was alerted to this via the adwords blog announcement a few days ago and our search team here at MEC. It reminded me of when MSN launched adCenter and you could target certain demographics built on previously captured data. I guess what I’m not seeing is the conflict with this addition to Adwords and Affiliate. Those running search campaigns now have this as an additional tool within their arsenal. Privacy issue is the main one I see, it’s a shame this appears to be opt out rather than opt in.
  
  Reply
Jack Rutter
Mar 18 at 3:42 pm

Hi Paul,

Interesting discussion that has come to my attention over the last 6 months. To give you a bit of background I have been examining the possibility of display partners re-targeting “shopping basket abandoners” (as they are known in the re-targeting world) with display messages on CPA (click cookie, not PI).

My opinion on whether affiliates get a cut of the retargeting CPA is dependent on how this activity is carried out. The most important aspect of re-targeting is getting the data with the relevant user profile information. There are two ways in which this can be done:

1) Tag put on the advertisers page to capture the profile data of every non – converter (traffic from PPC, SEO, direct to URL etc) then ALL who did not buy are re-messaged.

In this scenario then it is difficult to justify giving affiliates a slice of the retargeting CPA because they are up against all other channels that have played a role in driving traffic and this would be very difficult to attribute. However the volumes for the partner doing the re-messaging will be huge.

According to my research search re-targeting campaigns have had conversion rates of up to 3%. Let’s think about this from the clients’ point of view for a second and look at the numbers.

Client X 2,000,000 unique visits per month
Conversion rate of 5% = 100,000 transactions
Non-Conversion rate 95% = 1,900,000 unique users not buying
Average order £100

3% conversion from re-targeting messages
1,900,000 X 0.03 = 57,000 transactions
57,000 X £100 = £570,000 in potential revenue for the client

2) If a client with network and or an agency choose to target those “shopping basket abandoners” that were referred from the affiliate channel then it is different, I believe affiliates should get paid a finders fee.

To get this data an append is put onto an affiliate networks’ tracking URL and all affiliate referred traffic that has not converted can then be re-targeted. Volumes would be lower than the scenario above, however it could still have a big impact on the volume of sales over a 12 month period.

There are operational challenges however:

• Getting a client to put a tag on their site (can be very challenging sometimes!!)
• When a retarget ad can be served
• How to attribute paying affiliate refferal fees

Despite this, both are a valuable source of sales that advertisers could investigate and moving forward will help drives efficiency from their marketing spend.

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