How incremental are the sales of the affiliate channel? You could say that is, literally, a million-dollar question, because marketers factor this when determining where to allocate their marketing dollars.
Beyond the fact that incrementality is really just a long word for a quite simple concept, what do marketers mean when they ask this question? And is it even relevant given how marketing channels are converging and consumers' online shopping behaviors are changing?
Some interesting research related to affiliate sales and incrementality have been done, but incrementality is still a topic that causes the most seasoned marketer to want to pull their hair out—but why is that?
When did the definition of incrementality move away from a definition of lift, and turn into a question about predicting consumer intent?
These were the main questions posed during a popular CJU 2012 session earlier this year. It's the start of many conversations that CJ is driving related to this topic and others important to the affiliate marketing industry. Some key points from "Incrementality: Does it Matter?" presented at CJU 2012, in Santa Barbara, CA
The definition of "incremental sales" has evolved to mean "sales that I would not have received anyways." As a result, digital marketers are frustrated by trying to determine the intent of shoppers.
The traditional sales funnel is outdated—it fails to convey the typical, modern-day path to purchase—and marketers should instead view the consumer journey as a circular one. Affiliates play a role in many stages of this new journey and deliver more in the way of:
New Customers: Advertisers who track new customers in the CJ Network see an average of 25% of sales coming from customers new to them. This underscores that affiliates successfully influence consumers and can deliver new customer rates that exceed most other digital channels.
Conversion Rate: Affiliate marketers help deliver more sales to advertisers by "closing the deal" with their content and offers. In fact, closing the deal has become even more important as consumers increase their pre-purchase evaluation activities and shopping cart abandonment rates increase.
Frequency: CJ Network data shows that shoppers who connect with advertisers via affiliate publisher websites shop more frequently and this translates to incremental sales. Advertisers value the volume of repeat customers that come through the affiliate channel and recognize how publishers keep core customers engaged.
Reach: The reach of the affiliate channel can be viewed as important "shelf space" for advertisers. Affiliate clicks reflect consumer engagement and, thus, reach is a metric that should be used to value affiliate effectiveness, particularly as affiliate websites grow their unique visitor counts.
Answering the question of "are these sales incremental?" is important, but marketers need to focus on measureable incremental proof points—not on consumer intent. As an industry, we should also more closely consider the myriad of journeys that consumers are making while shopping in our hyper-connected world.
Sandrine Thompson will be attending Affiliate Summit West as moderator of the panel "Coping with Affiliate Marketing Challenges" that will cover typical challenges advertisers and publishers face, such as optimizing relationships and working efficiently to scale their business. The panel will be held on Sunday January 13th from 3:30-4:30 in Florentine 3 & 4.
Also be sure to visit the CJ Affiliate team at Affiliate Summit West: Meet Market table #85 and Exhibit Hall booths #315/414 from January 13-15th in Las Vegas.