Global Affiliate Marketing: Approaching International, Regional & Local Strategy

Affiliate marketing global expansionWe are into day two of the Performance Marketing Insights Conference in New York and I’m sitting in a session called Global Affiliate Marketing: Approaching International, Regional and Local Strategy, presented by Peter Figeuredo, James Maley and Jess Nathan.

Following are my notes and personal takeaways from this session:

 

US OPPORTUNITY

  • US Market Overview: B2C ecom sales will grow 12% to $384.8 billion in 2013 (30% of worldwide ecom)
  • US remains the largest spending country online but China is closing fast.
  • Avg B2C ecommerce sales per user reach $2466 *Source: EMarketer
  • Advertisers with programs see 23% of their online sales coming from Affiliate.

 

EU OPPORTUNITY

  • 289MM people online
  • Average 30 hours a month online
  • $1738 average customers spend online in 2012
  • $111BB online retail spend in 2012
  • 12% annual growth forecast over the next 5 years
  • $5BB sales revenue driven within UK affiliate channel

His recommendation: service and focus on your local market before you move to others.

 

Top Affiliates in the US (Note: Shown in sales, not by my personal recommendation)

CashBack Affiliates

  • Fatwallet
  • ShopatHome
  • Ebates

 

Loyalty Affiliates

  • Upromise
  • MyPoints
  • iGive

 

Coupon And Deal Affiliates

  • Savings.com
  • Offers.com
  • CouponWinner

 

Comparison Shipping Affiliates

  • TheFind
  • Kaboodle
  • ShopStyle.com

 

Top Affiliates in Europe

Cashback & Loyalty

  • Payback
  • BeRuby
  • Quidco
  • iGraal
  • TopCashback

 

Meta & Price Comparison

  • Dkyscanner
  • Kayak
  • PriceRunner

 

Voucher / Coupons

  • MyVoucherCodes
  • KuponKoder.com
  • Savoo.co.uk

 

Closed Network

  • Mecenat
  • NextJump
  • Asperity

 

Supplementary Paid Search

  • Media Planet
  • UK Web Media
  • JVWeb

 

Vertical Affiliates US  – Higher Value, Higher AOV Affiliates (take longer to work with and recruit but add huge incremental value to an affiliate channel)

  • AudioBookNerds.com
  • Skimlinks
  • Blogger
  • Invitation Crush
  • CampusBooks
  • AudioBookStore
  • HotelsCombined
  • HotelsEtc
  • PeerTrainer
  • Jetradar Flight Search
  • Audio Book Mart
  • TopTenReviews
  • BooksPrice
  • Subscription.com
  • Site Builder Report
  • Body Editor
  • Small Businesses do it Better
  • Diamond Games

 

Vertical Affiliates: UK, France and Germany

  • Advanced multi-channel journeys
  • Vertical sites drive incremental traffic
  • Purchase on Cashback / Loyalty
  • More PPC Affiliates
  • Lack of quality content
  • Cashback sites starting to develop more
  • Combined cashback and content offerings
  • Eastern Europe is an emerging market

 

Recommendation: In EU shoppers are very social and mobile heavy, meaning you should have opportunities to engage with affiliates and allow them to earn through these channels to have a more successful affiliate program.

Side note: The Asian market is extremely email heavy and also are paid on a CPA model. Be sure you can pay in local currencies if wanted, but also in USD if preferred.

After you find your top affiliates, be sure to work with niche affiliates to grow revenue. Provide them with content. Hilton Hotels showed a case study on the power of working with content bloggers and niche affiliates, and how they can drive strong incremental sales.  According to this panel (and me) Content Affiliates drive the most value. The value of reviews is incredibly powerful.

 

Legal Considerations in the US

  • Tax Law – See CJ’s US Affiliate Tax Law map (color coded)
  • Trademark and trademark bidding allowances
  • Cookies – soon to follow EU law
  • US Law – anyone can sue for any reason

 

Legal Considerations in the EU

  • Tax Law – Each market has deductible taxes that are fixed and based on services you provide.
  • Trademark – Protecting your brand in the EU
  • Cookies – To protect users from cookies being downloaded on their device and have their behaviour tracked without consent
  • International Law – Supranational and local law, and the future… the right to be forgotten.

 

Mobile – the Big Picture

Over 50% of Americans have a mobile phone (comscore2012)

Half of US smartphone users use m-commerce apps (Nielson, June 2012)

Examples of mobile-optimized publishers:

  • RetailMeNot
  • CouponCabin
  • TapJoy
  • RedLaser
Some Stats:
  • 15% of conversions tracked by Impact Radius are mobile
  • 64% iOS and 35% are Android
  • Conversion rates on mobile is typically higher than traditional channels
  • AOV is typically higher than traditional channels
  • 6x growth in traffic across top mobile categories
  • Only 33% of CJ advertisers have a mobile enabled website

 

Top 5 Categories for Mobile:

  1. Department Stores
  2. Clothing, Apparel, Accessories
  3. Computer and Electronics
  4. Travel
  5. Sports and Fitness

 

How to make the most of mobile in Europe

  • Mobile sites – 57% of top 100 UK brands have a mobile site, up from 37% six months ago.
  • APPS – 88% of the top 100 global brands have an app in the App store
  • Integration – omni-channel – make sure it can be used across any platform and in person.
Recommendation: this differently then test test test.

 

Attribution

90% of affiliate shoppers visit more than one site before making a purchase  * Forrester Research 2012
Attribution is NOT going away. Currently the tools to understand attribution data
What attribution model are you currently using?
  • First click
  • Last click (most common) – but going to change as attribution becomes more algorithmic over time and more tools come out (increase to come over the next three years).
  • Linear
  • Time Decay (least common)
  • Customized by Channel (
  • Unique methodology developed in house or by agency

 

What most companies have found who track attribution and multi-channel analytics, is that affiliates DO drive a huge positive impact on the buying cycle, including:
  • Faster Purchase
  • Higher Conversion Rates
  • Higher Average Order Values

 

In EU, Loyalty and Voucher dominate single and multi-channel purchase, with content and vertical sites the next biggest source of traffic.
Merchant Considerations before you move into any of these markets:
  • Where is the bill being paid from and where is the invoice registered?
  • Will you need to deal with withholding tax?
  • which entities are your contracts between?
  • Are you legally allowed to trade?
  • What are the trade retributions in the country?
  • Is there an affiliate base / network in the region?
  • Can you pay in foreign currency?
  • Etc.

 

All in all this group (and myself) believe there is incredible opportunity to expand into new global markets, but going back to the beginning, make sure you do it well locally and within your own market first. Then test, test and test carefully as you go.

Driving International Expansion Through Search

This is a live blog post from the Performance Marketing Insights Conference in NYC. These are my personal notes and thoughts from the session Driving International Expansion Through Search, presented by well known affiliate, Sri Sharma, Managing Director of Net Media Planet.

 

My notes and thoughts:

  • Internet sales and opportunities have grown by 100%
  • 47% Growth in China within the middle class
  • Europe sees a 65% increase of purchasing moving online in 2012.

 

Challenges to international expansion

  • Customer
  • Competitor
  • Operational
  • Regulatory

 

How can search help you?

  • Drive incremental sales
  • Build the international expansion business case.

Quick Stat: Google owns 89% of search and 97% of mobile search.

Don’t forget social media advertising space, such as Facebook in North America, V Kontakre in Russia and Qzone as the leading platform in China.

 

Understanding the Local Customer

  • What do they buy online?
  • How do they start their shopping journey?
  • How do they search?
  • What customers experience is important to them?

The Chinese Market – where we worry about quality of products made in China, they worry about brand credibility. An ongoing trend in China is paying by Cash On Delivery.

Identify primary competitors by product category.

Understand trends, customer needs, and market saturation by keyword.  Understand your competitors because it will help you figure out how to differentiate yourself in the market. Compare your pricing to competitors by product. Analyse messaging that your competitors use.  Analyse the competitor customer profile.

Messaging localization increases traffic and conversion rate. On-site localization increases conversion rate. Think about currency, words used in local areas, and language.

Use the Google Global Market Finder to understand local traffic trends and opportunities.

 

Develop the international business case

  • Grow brand awareness – phase based budget, channels in PPC, display and remarketing
  • Maximize direct response – channels: PPC, Remarketing, Display (RTB)
  • Develop insights – Trends: customer, competitor, multi-channel sales
  • Create recommendations – On-site experience, resourcing

If you take this approach, you can build a business case for any brand.

 

Top Three Tips

  1. Take an incremental approach
  2. Localise your marketing
  3. Call on experts to support your strategy

Is There a Market for Affiliate Marketing in China?

I had three very interesting phone calls last week from completely different people asking me about affiliate marketing in China. One, a US based investor asking my opinion about the potential of affiliate marketing in China, another, a Chinese branding company looking to do business with us and the last a New York based Chinese Affiliate Network focused on US product sales in China.

I asked a few questions to get a better understanding of the marketplace and their understanding of it.

 

Chinese Affiliate Network: ChinadGateway

I was really intrigued when these guys called me because they were looking for US based companies wanting to advertise to a Chinese market on a performance base. However when I asked how affiliate marketing worked in China, they said Chinese affiliate marketers generally worked on a CPM basis only. They do not work on a rev share or CPA model. When I asked why, they said Chinese internet marketers wouldn’t take the risk because Chinese buyers don’t generally look at unknown brands or products. Chinese online buyers want only recognized brands of products that are not manufactured in China. I saw two big problems with their model in targeting US advertisers.

  • US based advertisers would likely not take the risk of doing a CPM model if site traffic is unlikely to buy. Why would an advertiser buy on impressions that are not going to convert?
  • So many products in the US are made in China, so unless you have a recognized brand and it’s made somewhere else, like Italy, Canada or on home turf, you’re also not likely to convert. This just leads to very expensive ad buyers that will likely produce a negative return.

A conversation with a friend from a Chinese branding company added another issue to the mix:

  • Everything in the major metropolitan cities where people CAN afford to buy stuff is within arm’s reach. There is nothing you can’t get immediately going downstairs into the shops in your office building or walking across the street. If it’s a need, they already have it. If it’s a want, the only want they would have from US based retailers is something they can’t already get in person.

 

US Based Investor

Strange that this man called me after I had spoken to two Chinese owned companies looking to leverage the US Marketplace and asked what the potential was in the Chinese marketplace for affiliate marketing. After filling him in on my calls and my thoughts on the potential road blocks listed above, he too agreed that unless he could create a marketplace where Chinese buyers could easily purchase high quality products by international brands made in first world countries, the likelihood of success with traditional affiliate marketing was limited.

BUT, there lies an interesting opportunity here as well. If a niche affiliate network focused on only top level brands made in “first world” countries, would the world jump at the chance to market them? I think so. The challenge would be accommodating different performance models that are acceptable within the countries marketing the products while making them mutually beneficial and profitable to the sellers.

Maybe it’s not for those countries to change their models but for us to find ways to accommodate how they do business while making it profitable for us as well. Mutual win-win.

At the moment there is no “affiliate network” that does such a thing that I’m aware of. However ExactView (founders of Buy.at) has a model that is closest to this and might benefit from keeping these cultural differences and new market potentials on close watch. Who knows, maybe it’s time for a new Global Performance Network that will focus solely on filling this void.

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