Affiliate marketing has been around for decades but remains a challenge for even the most advanced e-commerce leaders. While there is still room for improvement, marketers have come to rely on detailed reporting and meaningful intelligence for non-affiliate channels. The affiliate channel, meanwhile, has stayed in the “dark ages” with limited access to data and relevant insights.

Moving forward, affiliate marketers will demand the same level of insights and analytical tools as their peers. For executives to extract the most value from their affiliate channel, they must be able to track the true source of every lead, inbound call, download and sale across multiple channels, platforms, media and points of contact...just like non-affiliate channel counterparts. When that kind of spotlight is placed on partner activity and conversion attribution, affiliate performance becomes infinitely easier to evaluate and affiliate programs begin to deliver much greater results.

Big Data promised to revolutionize access to data and the types of insights that marketers can learn from it. And the change is underway.

Big Data-Driven Insights

According to the 2014 “Measure The Impact Of Cross-Channel Attribution” report from Forrester Research, optimizing based on Big Data attribution-based insights can reduce cost per action by 30–50 percent, driving improvements in ROI by 50–100 percent over time.

Forrester defines Big Data as “The practices and technologies that close the gap between the data available and the ability to turn that data into business insight.” This definition immediately exposes where many affiliate marketers are hurting and where they have an opportunity: availability of data, an open mindset for how to drive value and a process that focuses on leveraging data to drive results aligned to the organizational objectives. Extracting Big Data insights relies on analyzing and contextualizing data points from a wide spectrum of sources and translating them into actionable insights. When leveraged and applied appropriately, it will help a business to understand how their various marketing initiatives are contributing to key business objectives. What you will find may tell a different story from what the standard KPIs are saying.

In today’s marketing environment, organizations have to create a culture and commitment to data-based decision making. This also means re-evaluating departmental key performance indicators (KPIs) to ensure that they are appropriately aligned to the larger business objectives. It is not uncommon, for example, for the data to reveal that the return on ad-spend (ROAS) of some spend can be much higher than legacy metrics would suggest. But to take advantage of this insight, the organization must be open to alternative departmental KPIs.

Big Data promised to revolutionize access to data and the types of insights that marketers can learn from it. And the change is underway.

For instance: many online retailers are focused on driving so-called new-to-file customers. The big challenge that marketing executives face is identifying which channels are truly responsible for driving a new customer conversion. Unfortunately, there is no straightforward answer.

When analyzing top purchase paths for new-to-file customers, one large U.S. online retailer found that 20 percent started their journey to purchase from a few, very specific content sites that were strongly aligned to their product category. Although these sites were responsible for ‘introducing’ new customers in 20 percent of total conversions, they were only last click five percent of the time. This resulted in a distorted view of who was driving new-to-file customers because their legacy data sets only contained last click data. The retailer’s realization was that a major opportunity existed to drive more new customer conversions by partnering with these specialized content sites on different terms. The affiliate team decided to partner with these high-value sites on so-called hybrid terms: a guaranteed minimum CPC and a CPA bonus in case they were involved in the last click. In a few cases, they partnered through sponsored content and monitored traffic coming from these pages. This strategy turned out to be wildly successful – 12 percent growth in new-to-file customers. In addition, the affiliate team demonstrated to the rest of the marketing department how it was contributing to the organization’s growth goals by leveraging Big Data insights and thinking outside the traditional channel silo.

Another good example is that of a travel company which wanted to increase sales of high-margin inventory. To optimize sales of premium cabins and premium vacation packages, the company analyzed a large dataset that included traffic and conversion data from all digital channels, including mobile and in-app. They found that consumers purchasing premium products tend to have a different purchase path than other customers. When analyzing traffic from the different media partners, it became clear that partners had a significantly higher percentage of premium target customer traffic. They then leveraged the data by developing custom partnerships that offered tailored, sometimes exclusive, premium inventory to these partners on custom contractual terms. As a result, there was a notable increase of premium product sales through the affiliate channel.

Big Data can completely change the way you build and leverage affiliate and other direct partnerships and also allow you to fully optimize your investment in the channel.

Leveraging a turnkey solution that employs Big Data analytics to help affiliate marketers intelligently credit every conversion (including those that occur through mobile and in-app platforms) is a big step in the right direction.

The bottom line: apply Big Data analytics to gain multi-dimensional insights, cut out the middleman and shift your mindset from affiliate marketing to a more bottom line-centric performance marketing approach. Adopting a Big Data performance marketing strategy provides a welcome disruption to the old-school model with its real-time, multi-dimensional insights for smarter decision making and ultimately increased operating margins.  

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