Revolution: Special Report - Battle of the brands

For retailers such as Marks & Spencer and Next, whose customers lap up the fashion advice dished out online, affiliate marketing can be particularly effective. Kim Benjamin compares their programmes.

Skip to tables

It's easy to see why retailers are embracing affiliate marketing. The activity can ensure exposure in locations where consumers seek out information or opinion to shape their purchasing decisions, while still protecting the brand.

'Internet shoppers know a good deal when they see one, and many retailers are experiencing a decline in email conversion and online customer acquisition due to the growth of the savvy consumer,' says Mary Keane-Dawson, director at digital management consultancy Reform. 'Voucher-code aggregators and affiliates can capture those consumers because of the depth and breadth of their offers.'

Affiliate marketing is growing in importance among fashion retailers - such purchases are a constant, with consumers buying one or two new pieces each season. Furthermore, fashion-conscious consumers are frequently looking for style advice on blogs, online magazines, price-comparison sites and places where they can read recommendations from style gurus. This means brands need to be putting themselves in front of the consumer at every stage.

'The mixture of affiliate types to work with - from bloggers, voucher codes, shopping aggregators and cashback sites - ensures plenty of potential partnerships depending on the brand's objectives,' says Chris Bishop, founder and managing director of affiliate agency 7thingsmedia and former online acquisition manager for House of Fraser. 'Affiliate marketing is now mainstream - 95 of the recent IMRG/Hitwise Hot Shops List Top 100 have affiliate campaigns, and this trend is replicated across smaller merchants.'

He adds that there is also evidence that affiliates actively increase conversion rates and consumer spend. This, he says, is due to the nature of how affiliates work - they are conducting a large element of the pre-sell of a brand's products, optimising the opportunities for the brand, and therefore themselves, to make more money on each customer.

And unlike sectors such as consumer electronics, fashion brands have larger margins to work with and can strategically incentivise their top affiliates. More recently, a major focus for fashion retailers has been on long-tail engagement - those affiliates that won't necessarily achieve significant sales but which are an important brand partner with dedicated followers.

To assess the affiliate marketing strategies of fashion retailers, Revolution asked Commission Junction's account director, Hardeep Sohal, and its publisher account director, Emmanual Odigan, to review Next and Marks & Spencer. The retailers' use of affiliate marketing was assessed across ten criteria, including programme visibility, commission structure and brand perception (see box).

M&S emerged as the winner, scoring highly for its programme transparency and its communication with affiliates. The retailer uses two networks for its affiliate marketing activity - Affiliate Window and LinkShare - and says it works closely with its partners to find out what works and what doesn't. 'We believe there is value in the affiliate channel and the exposure we can achieve through some of our main partners is unparalleled,' says Jack Lemon, marketing manager at M&S. 'We work closely with our networks to help grow our relationships within the affiliate community.'

Tailored programme

Kevin Edwards, strategy director at Affiliate Window, says affiliate marketing will enable any advertiser to tap into a whole range of online activity. The key, he says, is understanding which aspects best fit your brand and working to optimise those elements.

'M&S runs a mature affiliate marketing programme and has well-established relationships with so-called "incentivised sites" - those affiliates offering a voucher, cashback or loyalty reward for purchasing,' he says. 'It has invested considerable time and resources into building close relationships with its top affiliate partners.'

Edwards adds that it is important for M&S to ensure it is visible on major sites, especially during key marketing periods; also vital, he says, is the retailer's effort to continue its dialogue with fashion bloggers in order to guarantee that it is covering the whole spectrum of affiliate activity.

'M&S has also invested in the long tail and the tools and technologies that appeal to a wide affiliate audience,' he says. 'This includes initiatives such as the launch of content widgets that showcase the range of the retailer's products and promotions, and a feed creator powered by FusePump. This allows affiliates to access rich information and review available products from the M&S site, and to see a sample output in a preview screen.'

Penny Mather, marketing director at LinkShare, believes that what matters most is using shopper data and insight to understand how your customers, and those of your competitors, like to shop; also important, she says, is that brands invest in those technologies that best accommodate their needs. Fashion advertisers in the LinkShare UK network saw sales through the affiliate channel grow by 29 per cent in 2011.

'This is where affiliate marketing can add huge value - offering brands a test-bed for technologies, such as mobile voucher codes, and brand presence on up-and-coming blogs without requiring the budget commitments of a self-run programme,' Mather says.

Next, which works with Affilinet, scored highly for its programme transparency, programme terms and brand perception - the retailer ranked high on many shopping portals, reflecting its popularity with buyers. Its affiliate marketing strategy was less impressive, however, when compared to M&S's, with regards to its use of creative and availability of offers.

M&S's Lemon says that while the retailer has a robust way of measuring the incremental value of certain categories of affiliates on its programme, a watertight method of measuring the incremental revenue for specific offers is needed.

Affiliate Window's Edwards adds that the challenge any brand has is to predict the likely budget for an affiliate marketing campaign.

'All major retailers will want a sense of what they will have to invest in their affiliate programme even though, unlike almost every other channel, the activity is organic, evolving in line with the engagement and flexibility of the retailer and affiliates,' he says.

As Mather outlines, changes in consumer shopping habits are being fuelled by the rise of smartphones, tablets and social-media marketing. 'Consumers are constantly connected. They can take a break from work and shop or chat with their friends about what products they like or don't like. It's a retailer's dream,' she says. 'Brands, however, are in danger of getting left behind, and affiliate marketing ensures they are able to move with the times.'

Increasingly, retailers are looking at affiliates as more than an acquisition channel, recognising the branding they can achieve from being featured on highly trafficked sites. Meanwhile, affiliates are becoming brands in their own right, many of them with more traffic than the major advertisers they promote. They are also multichannel, with mobile apps, newsletters and on-site promotions, and a few of them can even track consumers as they move 'online to offline' via codes and special deals.

It will therefore be increasingly important for advertisers to recognise the value in all this, but also to choose and optimise the elements that are the best fit for their brand.

SUMMARY - MARKS & SPENCER

Marks & Spencer has a transparent and informative affiliate programme, with data on some of the prices that its products are sold for. This enables affiliates to convert their traffic through widgets, product feeds, banners and text links, with a number of widgets in a wide range of sizes and themes. Affiliates are also encouraged to generate more for their brand by incentivising performance, which is the best way to get more out of a programme. The retailer's communication with affiliates is impressive, with affiliates provided with all the relevant contact details. However, M&S could enhance its programme further by informing affiliates if its m-commerce site has an affiliate pixel on the confirmation page, as this would open an additional pool of publishers it could work with.

SUMMARY - NEXT

The Next affiliate programmes look to have a solid foundation with good brand perception; numerous publishers that work with Next have the brand listed close to the top of their web pages and it ranks high on many shopping portals. Its programme transparency scores highly, similar to that for Marks & Spencer. For Next to take its affiliate marketing to the next level, however, it could increase the use of creative and take advantage of widgets and more dynamic creative that will match the look and feel of the Next website. Furthermore, Next could capitalise on the social and mobile boom by allowing affiliates to work with its m-commerce platforms, as well as bridging the online and offline gap by introducing performance incentives for those publishers driving sales in-store.

League Tables

Use of affiliate marketing
  Marks & Spencer Next
Programme visibility The programme is visible on M&S's affiliate network Next works with one network and the programme
  as well as on the a4u site and Google. can also be found across forums and Google.
  8/10 7/10
Commission structure M&S promotes a standard 2% revenue share as well as a tiered Next pays a standard 2% revenue share for fashion categories,
  commission structure rewarding affiliates that drive over £200,000. increasing to 4.5% for publishers that generate over £200,000.
  8/10 7/10
Diversity of publisher M&S uses behavioural retargeting as well as promoting Although Next seems to work across all business models, the use of
business models an easy-to-use m-commerce site. promotional codes and increased commission is used in line with its marketing calendar.
  8/10 7/10
Programme transparency M&S provides ample detail on brands and delivery windows;there is also information Next has a comprehensive description of its programmes giving details of
  on its average order value as well as some of the prices M&S products are sold for. average order values, conversion and whether commission is inclusive of delivery.
  9/10 9/10
Communication with Affiliates have been provided with all of the Next has provided internal contact details as well as those of the account
affiliates relevant contact details for M&S and its network. management teams at both networks, but there are a lot of questions on forums about the programme
  9/10 7/10
     
Total 42/50 37/50
League Tables
Use of affiliate marketing
  Marks & Spencer Next
Availability of offers There do not appear to be any recent offers on the forum, Although Next is visible on publishers that utilise the cashback model (at a lower revenue share of
  perhaps because M&S does not work with discount sites. 1%), it does not appear to be running any voucher codes/special offers outside standard sales.
  5/10 6/10
Basic technical offering Affiliates can send traffic to the homepage or the destination of their choice Next allows publishers to deep link to any page on the website, helping
  via a deep-link generator. However, the programme has only one standard text link for affiliates. to minimise clicks and maximise conversions.
  6/10 7/10
Creative M&S has nine different widgets in a wide range of sizes and themes. Next has a wide range of sizes for
  Although there are no Flash links, there are 15 banner sizes. the banners available to publishers.
  8/10 6/10
Programme terms M&S has a clear commission structure that is grouped in levels; affiliates are also Next breaks down commission structure, cookie length, existence
  made aware of their current tier and that the cookie length is 30 days. of a product feed and contact details of the account management team.
  9/10 8/10
Brand perception It appears that the brand perception for M&S is the same both offline and online, The Next affiliate programme has good brand perception. The brand ranks highly
  although there are more deals for technology online than there are offline. on many shopping portals, reflecting popularity with buyers.
  7/10 8/10
     
Total 35/50 35/60

OVERALL TOTAL: (analysis provided by Hardeep Sohal and Emmanuel Odigan, Commission Junction) 77/100 and 72/100

Discussion

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now

Latest

John Lewis walks consumers through its history to celebrate 150 years of business
Waitrose boosts content strategy with 'Weekend Kitchen with Waitrose' C4 tie-up
Hottest virals: Cute puppies star in Pedigree ad, plus Idris Elba and Fruyo
Amnesty International burns candles to illuminate new hope
Toyota achieves the impossible by calming angry Roman drivers
Tom of Finland's 'homoerotic' drawings made into stamps
YouTube reveals user habits to appeal to 'older' marketers
Ex-M&S marketing chief Steven Sharp consulting at WPP
Wolff Olins reveals new CEO after Apple poaches Karl Heiselman
Glasgow offers £30,000 prize to best digital idea for 2014 Commonwealth Games
Google's revenues surge but shares drop as it grapples with transition to mobile
Facebook beats Twitter to most 'marketing friendly' social media site crown, says DMA
Fableists believe children like Finn should be outdoors enjoying life
Homebase, Baileys and Camelot join the line-up at Media360
MasterCard renews Rugby World Cup sponsorship to push cashless message
Lynx unleashes £9m 'Peace invasion' campaign
Social Brands 100 Youth: Pizza Hut most social youth brand in UK
Cheryl Cole is wild and arresting in new L'Oreal work
Morrisons told not to show alcohol ads during YouTube nursery rhymes
O2 head of brand Shadi Halliwell departs after 23 years at company in restructure
Tesco hit by further sales decline as it turns to digital Clubcard and social network
Branding guru Wally Olins dies aged 83
Duracell short film captures epic Transatlantic voyage
Ash runs Tinder experiment to show smokers are less desirable to opposite sex
British Airways teams up with Gerry Cottle Jnr for summer of rooftop film screenings
Arklu says 'girls can be superheroes too' with doll design competition
Coke enters squash market with Oasis Mighty Drops
Virgin Galactic signs up Land Rover as space flight sponsor
Motorola marketer Andrew Morley departs as Google gears up for sale to Lenovo
US Airways apologises after tweeting obscene image at a customer