Insight from our experts

Digital & Affiliate Marketing.

Mark Syal
Quick Facts Name: Mark Syal
Company: Walker Media
Position: Head of Walker–i
Walker–i

Forward–thinking retailers must not only retain a focus on selling goods online but with the media industry becoming increasingly digitised they should also consider the internet as a fertile ground for marketing. Mark Syal, Head of Walker–i, reviews the increasing importance of digital media and affiliate networks.


Digital media

What retailers face is a confusing array of online options including online display advertising, social networking, blogging, micro–blogging, and a variety of other online activities revolving around online conversations that might either be the ideal solution for marketing of a client's products, or totally irrelevant.

Mark Syal, head, Walker–i, says: "There are many options and retailers need to find ways to zone in on the most relevant ones to their businesses." He suggests the way to do this is to look at relative size of the activity amongst the target audience and to consider what role it might play in a communication plan.

It is essential to prioritise these options, according to Syal, as with nearly 32 million people 'frequently online' in the UK and more than six out of 10 adults online at least once a week, digital channels have become a mainstream way of reaching your target audience.


Purchase Plan

Such is the variety of digital media that Syal says it can occupy any area on any 'theoretical purchase path' typically used by the advertising industry. It can affect all the elements in this chain – awareness, engagement, liking, consideration and research, and purchase. Almost any activity in traditional media has its digital equivalent.

Individual digital channels are now starting to rival traditional channel's size; YouTube, for example, would sit between Sky One and E4 on the list of the most popular TV station's monthly reach figures with its 12.9 million unique monthly users aged over 16 years.


Emerging Trends

Syal says that one major emerging consumer trend is the mixing of domestic TV viewing with web surfing: "Using the internet and TV together is becoming more common. Retailers need to look at the joint effect as there is a noticeable increase in recall and product consideration when both are seen by consumers."

The levels of consumer engagement with some of the major online properties also highlights the growing importance of digital media, according to Syal, with as many as 6.2 billion minutes spent on the social networking site Facebook in April 2009 alone, according to Comscore.

An increasing area of activity for advertisers is to use digital media as a channel to engage with consumers. T–Mobile managed to attract 13,500 people, by sending invites via Facebook and on Twitter, to converge on Trafalgar Square in London and sing The Beatles's song 'Hey Jude'. The event has also subsequently attracted 500,000 views on YouTube, and of course was then turned into a TV ad which was seen by most of the UK population.


Affiliate Marketing

The major focus for most UK web advertisers is not branding or engagement activities, however, but sales driving activities. Search marketing, either through search engine optimisation or through paid search is the primary medium here, but increasingly affiliate market is becoming a key channel. Most major UK retailers will have an affiliate programme running – although not all are run according to best practise.

The three parties involved in affiliate marketing are the publisher/affiliate that runs the website, the retailer or advertiser, and the affiliate network that enables the two parties to work together. The arrangement centres on advertisements being placed on the affiliate website and payments only being made to its owner when consumers have clicked on ads and gone on to purchase the advertisers' product or service.


Advantages of affiliate marketing

Syal says the advantage of such marketing is its low risk, potential for a high volume of sales; cost–effectiveness; accountability; and the fact that an advertiser can engage in quite a wide variety of activities through affiliates, typically all paid for on a cost per sale basis.

The sites/affiliates can be anything from blogs run by individuals, to cashback or discount sites, to major price comparison websites such as Kelkoo and Moneysupermarket.com. One of the key tasks involved in this form of marketing is the management of the relationship between the affiliate (generally handled through an affiliate network) and the retailer to ensure that sales are maximised for the advertiser.

Syal says it is essential that there is negotiation between the two sides and that different ways of advertising are constantly tried on the different affiliates' sites in order to achieve the best levels of click–through and sale. "You need to be pro–active and offer good bounty payments if possible because you are competing for space with many other advertisers for share of sales," he explains. The affiliate will give priority to advertisers who generate the highest yield for them. What helps this process is the ability of retailers to be able to see what commission rates other advertisers are paying affiliates.

Examples of big categories in affiliate marketing include travel, mobile phones and Digital TV, with their key attributes of mass appeal and good margins enabling a higher price to be paid to the affiliate, thereby ensuring the top spots on its site. Affiliates themselves have created many sites that have responded to the demand of users for content to help them whilst buying these products. It's this closeness to the point of purchase that makes many affiliate sites such efficient sales drivers.

With the variety of affiliates in the marketplace and the competitiveness in securing the top advertising slots with each of them, Syal says that effective affiliate management is essential if retailers are to achieve their full potential from using this form of marketing. Walker–i use their bespoke WASP affiliate platform – an invitation only affiliate network – to focus their management efforts on the larger affiliates. Typically, 10% of affiliates will drive up to 90% of sales on an affiliate programme.

Sayal's key recommendations are: ensuring regular and frequent contact with affiliates to encourage the optimisation of campaigns; providing affiliates with access to a full range of promotional materials; creating tiered commission structures to drive more traffic and maintain interest in promoting campaigns; offering high levels of service to affiliates resolving any issues quickly; and ensuring that commission is paid to affiliates on time.

Mark Syal
Head of Walker–i
Walker Media
Telephone: 07775 515 041
Email: marks@walkermedia.com
www.walkermedia.com