Retailers Shift Focus to Offline Affiliate Marketing | Street Fight

Retailers Shift Focus to Offline Affiliate Marketing

Retailers Shift Focus to Offline Affiliate Marketing

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Location analytics represent the new battleground in retail, but imagine if you could apply the same analytics for online attribution to offline purchases. Offline affiliate marketing does just that, giving retailers the tools to analyze data from in-store purchases similar to what they can do for online purchases. The industry, with several new advances, is closing the gap to making that situation a reality.

One of the biggest initiatives underway now comes from Foursquare, which is launching a location analytics service called Attribution. The service offers local retailers the ability to put big data to work in understanding what motivates foot traffic. Foursquare promises its Pilgrim platform will be able to identify when consumer phones enter one of the 65 million locations that register more than one billion place visits per month.

As soon as data is collected it can be analyzed in real-time. That lets retail partners make adjustments in the middle of a campaign. Retailers can receive daily reports on what’s driving business and fine tune as necessary.

Equal Efficiency in Online vs. Offline
In a parallel development, Peoplecount just concluded a two-month location analytics test of foot traffic at a suburban mall, using cell data, mobile beacons and Wi-Fi data, and it measured related statistics like dwell time, return trips and pathways.

This analytics test was designed to simplify attribution for location-based media and advertising. The next step is connecting this technology with existing attribution methods for offline affiliate marketing strategies, like LinkConnector’s multiple attribution models.

Thanks to technologies like these from Foursquare and Peoplecount, retailers should expect to see an equal efficiency in the attribution of their online affiliate marketing versus their offline marketing efforts within the next 12-18 months. These efforts will take very different analytical pathways, but the end result will open up new revenue streams.

The rise of offline attribution is already presenting new challenges to traditional direct marketing channels. More elaborate use cases of location-based data like Foursquare’s new service are tackling the biggest drawback of traditional advertising and marketing: lost attribution.

Advances in Handling Lost Attribution
Affiliate marketing has already addressed the question of lost attribution for online affiliates, even though it has grown increasingly complex. Last year, Google posted an update on its blog for performance marketing techniques in the field of affiliate attribution. This update specifically detailed the advances and how technology has changed industry expectations in recent years.

Google concluded that data-driven attribution of affiliate sales is now finally able to create a unified framework to compare performance of such difficult metrics as clicks versus impressions.

Performance marketing also offers better visibility into which affiliates really bring in net-new customers, separating those who are critical for a multi-touch path from those who aren’t pulling their weight. This also means that retailers can maximize affiliate contributions along other channels, such as offline coupons. Top-performing affiliates have begun investing in new forms of data-driven attribution in an attempt to keep up with the new omnichannel consumer.

More Horizontal Platforms
As data has grown increasingly valuable in tracking the efficiency of offline affiliate marketing, many companies are actively developing horizontal platforms to boost traffic to SMBs and local merchants.

Competition is intense for these dollars, and no company has yet emerged as the dominant force. What’s at stake, as revealed in a recent report by Forrester, is $6.8 billion — that’s how much the affiliate marketing industry is predicted to be worth by 2021.

Forrester’s survey found that 90% of advertisers identify affiliate marketing as important to their overall marketing strategy. The majority also said that affiliates brought in around 20% of their annual revenue.

Forrester discovered that advertisers have a much greater insight into how purchase decisions are made today, since two-thirds were able to track catalog-driven sales. Some 57% were able to track affiliate influence from sales at brick-and-mortar stores.

Why the Investment in Location Analytics?
The takeaway is that investment is going into location analytics this year as offline affiliate metrics take center stage. Even though e-commerce is growing rapidly, the lion’s share of revenue in retail still comes from in-store purchases; in-store represents not only vastly more revenue, but it also tops consumer preference.

For example, the International Council of Shopping Centers (ISIC) reported that 91% of consumers preferred to shop in-store over the last holiday season. Thirty-two percent of consumers bought the item online and then went to the store to pick it up, while 76% bought more items while shopping or went to a nearby store. If attribution had been fully tracked for each of those sales, the affiliates market might look even bigger than Forrester suggested.

By 2017, the world of affiliate marketing is likely to look very different from today, since SMBs and local retailers will become much more experienced and skilled in deploying big data to accurately target their best customers.

The next 18 months are also likely to be a turbulent time of both growth and consolidation, and affiliate networks will need to either learn or acquire partners with new skills in location analytics as well as more accurate attribution for offline campaigns. In the future, you many not even measure online and offline as different categories, but rather merely as parts of the emerging omnichannel customer experience.

Grace_Chan_hiresGrace Chan is vice president of product for Wanderful Media, a startup reimagining the shopping experience with Find&Save, an app providing cash back offers and deals for retail stores near a shopper’s current location. Her product development experience includes leadership roles at MerchantCircle, Yahoo! and Intel.

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