ModerN MarketiNg 22 November 2013...

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22 November 2013 MODERN MARKETING CREATIVE ENERGY THE POWER OF PERFORMANCE ® Performance

Transcript of ModerN MarketiNg 22 November 2013...

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22 November 2013ModerN MarketiNg

creative energythe power of performance

®

Performance

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THE DRUM 22.NOV.13 www.thedrum.com Performance 03

CONTENTS 04 Performance update The Drum takes a look at recent developments in the world of performance marketing, including the social affiliate scheme launched by O2. 08 Innovate for growth The Drum takes a look at how publishers are using technology and creativity to drive innovation in the affiliate space. 12 Opinion: A waste of hot air? Nathan Salter, chief operating officer, OMG, and chair of the IAB affiliate marketing council’s legislations and standards committee, sheds light on the potential ramifications of Ofgem’s energy industry cashback ban. 14 Affiliate and channel diversity A look at the role of affiliate marketing in the omnichannel and multichannel approaches of Burtons and Debenhams.

16 Q&A Performance industry insiders discuss topics including how to optimise the publisher/network relationship, reliance on cashback, managing international affiliate relations and performance predictions for 2014.

THE DRUM is published by Carnyx Group Limited. The publishers, authors and printers cannot accept liability for any errors or omissions. Any transparencies or artwork will be accepted at owner’s risk. All rights reserved. On no account may any part of this publication be reproduced in any form without the written permission of the copyright holder and publisher, application for which should be made to the publisher. © carnyx group limited 2013 iSSn 2046-0635

The rapid progress of this industry is what makes it such an interesting one in which to work. We were fortunate enough to acquire more space in our building this year and in the ensuing clear out, we found some client strategy documents from a few years ago. There has been a monumental improvement in the quality, depth and richness of the analysis we provide today compared to then and brands are making much better decisions as a result.

A new era of wider data sharing and collaboration was ushered in throughout 2013 and it continues to reveal how valuable affiliate marketing is at driving quality customers. In highlighting this value, some of the shortcomings of pure CPA are brought to the fore. This year has seen a marked increase in tenancies, post-view activity and publishers using Affiliate Window’s soft click solution, which rewards while preventing cookie overwriting.

All these are sensible forms of attribution modelling and are designed to be practical solutions to ensuring value is rewarded appropriately across all publishers. There are a number of ways we see this evolving in 2014, but it is certainly an area of major focus for us and needs to be supported by increasingly sophisticated tracking and technology solutions.

Clients engaging in attribution discussions should be applauded. We should be on a constant drive to understand as much as we can about consumer behaviour but the phrase ‘a little knowledge is a dangerous thing’ often springs to mind. With multi-device journeys becoming more popular, there is currently no solution offering the complete picture. While this blind spot exists, we must take extra care with the solutions we implement, always remembering attribution is neither a cost cutting exercise, nor about splitting commissions, but is about rewarding value appropriately.

2014 promises to further broaden our perspective ensuring affiliate programmes are fine tuned to deliver even greater value with unrivalled insight. We wish all our clients a successful end to the year, a relaxing holiday period and prosperous 2014.

Adam Ross, COO, Affiliate Window

a NETwOrk Of iNNOvaTiONSCreative innovation is the foundation of performance, and an energetic vigour characterises this space, as this supplement will seek to show – starting with a word from the sponsor.

editing Katie McQuater and Jessica Davies illustration Ross Lesley-Bayne design & production Amanda Dewar and Ross Lesley-Bayne commercial management James McGowan

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www.thedrum.com 22.NOV.13 THE DRUM04 Performance

The Drum rounds up the news, trends and findings in the performance marketing space

from the past couple of months.

performance update

85% of Bloggers missing out on affiliate sales

Research by affiliate network Paid On Results has found that 85 per cent of all bloggers are missing out on potential affiliate sales income.

The UK affiliate marketing and lead generation industry has been valued at £9bn but many with an online presence are missing out on their slice of this cake, particularly individuals who pen their own blogs.

Of 967 UK bloggers, posting at least once a day, quizzed on their success at monetising their endeavours, 52 per cent claimed to receive or ask for free product samples to feature.

However when asked on their use of affiliate links 85 per cent conceded that they didn’t harness affiliate activity in any form.

The most common reasons given for this were, not understanding what affiliates links are (37 per cent), being unsure how to set it up (23 per cent), wishing to remain unbiased toward particular brands (17 per cent), couldn’t be bothered (12 per cent) and not concerned with making money (eight per cent).

Graeme Sandwell, managing director at Paid On Results, said: “Whilst the affiliate marketing industry has exploded in recent years, there are some people that are clearly missing out on the financial rewards it can bring. Bloggers should definitely do their homework on affiliate marketing, because even one reader that goes on to make a purchase though an affiliate link on your blog could make you a decent bit of money.”

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Ofgem dismisses affiliates’ appeal On cashback ban in energy sectOr

Ofgem has dismissed an appeal from the affiliate sector regarding its ban of cashback models in the energy sector, instead tightening its policies outlined in its Retail Market Review.

The report, published in June, aimed to tackle widespread confusion over the various energy tariffs on offer in the market, making it easier for consumers to switch between providers.

However, it also stipulated that energy providers could no longer use cashback rewards for consumers who switch, which frustrated many in the cashback affiliate sector.

The move triggered an appeal, led by the Internet Advertising Bureau (IAB) and its affiliate members including Quidco, Affiliate Window, TopCashback, Afilinet, and Online Media Group (OMG) in August.

Representatives from a mix of the companies, together with the IAB, met with Ofgem to try and clarify the importance of cashback rewards and how cash incentives help encourage, rather than deter, consumers from switching energy providers.

However The Drum has learned that Ofgem has rejected the appeal, instead tightening its policies on the ban of using cash rewards in the utility sector, with all to comply by March next year.

Currently the rules only apply to energy providers, but they are expected to extend to comparison sites in the near future, meaning the likes of uSwitch and Moneysupermarket will also have to cease all cashback rewards for energy providers.

The Drum understands companies such as Co-op Energy have already pulled their cashback offers in anticipation of the ruling, while others that are still running cashback offers including npower, M&S Energy, and First Utility will have to pull their cash incentives by March next year.

Nathan Salter, chief operating officer at OMG, which led the appeal, and chair of the legislations and standards committee on the IAB affiliate marketing council, said Ofgem’s drive to make the market more clear and transparent for consumers is welcomed by all, but that cashback has been unfairly wrapped up in the decisions.

“Our understanding was that they [Ofgem] were looking specifically at how energy providers were rewarding with cashback, but our argument was that it is the cashback site that passes on the revenue – not the energy provider itself.

“We believe consumers are clear on that distinction, that they like it and that it goes in the spirit

of switching and providing a hook for consumers looking for a good deal. That was what we lobbied.

“Unfortunately they didn’t buy it and the result is that cashback will now be prohibited. Energy providers are already pulling out of cashback space – that’s not good for consumers or affiliate businesses,” he said.

TopCashback’s commercial director James Little said the ruling has “frustrated” the cashback affiliate market where cash incentives are widely regarded as being the best motivator for switching energy providers.

“The whole point of Ofgem’s report is to encourage switching, which we support, but what it doesn’t get is that cashback sites do encourage switching. There are approximately six million people who are signed up to cashback sites, and it will mean they now have less choice,” he said.

Ofgem was unavailable for comment at the time of this article’s publication.

OMG’s chief operating officer and chair of the legislations and standards committee on the IAB affiliate marketing council, Nathan Salter, has written more on the ramifications of the move on page 12.

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Tesco, The Body shop and eFlorisT To Trial apple’s passBook aFFiliaTe soluTion

Tesco, The Body Shop, Seatwave and eFlorist are to trial a performance marketing technique which integrates Apple’s mobile wallet, Passbook, into marketing programmes.

The solution will enable advertisers to follow-up the delivery of vouchers, coupons or special tickets after customers have left the original affiliate channel on their iPhone of iPad, opening up opportunities to offer updates to customers when codes expire and encourage them to visit stores through geo-targeting.

By simplifying the purchase process on mobile the journey can be more accurately tracked and the affiliate rewarded, according to performance marketing technology company Tradedoubler.

Apple’s Passbook allows consumers to store digital tickets, store cards and coupons in a single app and figures from Tradedoubler’s Insight Unit show 51 per cent of connected consumers pro-actively search for vouchers on their phones.

The solution was created by Tradedoubler in partnership with mobile wallet technology provider Passforce, making Tradedoubler the first affiliate network to introduce a marketing solution for Passbook.

“This is an exciting and unique proposition for our clients and a first in the performance marketing world,” said Neil Ranatunga, head of mobile, UK, Tradedoubler.

“We now have the ability to help improve conversion, even after the customer has left an affiliate website. By driving more sales for our clients and more commission for our affiliates from the same level of traffic, we believe that Tradedoubler’s Passbook solution opens the door to a brand new way of improving brands’ voucher code performance.”

The trial will be conducted through select affiliates such as Netvouchercodes.co.uk.

Stephen Kerin, managing director, Webgains UK, commented: “One of the major advantages of digital wallets is their scope to facilitate online-offline integration. This together with the potential they offer for geo-targeting means that if correctly harnessed they can be a powerful tool. Having said that, we are perhaps seeing this technology used a little indiscriminately at present, which alongside their limited consumer uptake is preventing it from being used to its full potential. When it comes to using this technology to increase engagement though, I think it’s up to publishers to find new ways of doing so and making the technology more relevant to advertisers.”

o2 uniTes social media and aFFiliaTe channels wiTh ‘reFer a Friend’ scheme

O2 is to reward people who recommend and share its products on social networks with £20 Amazon and M&S vouchers, with the view to extending this to cash rewards in future.

The mobile operator has already launched the scheme, called Refer a Friend, in Germany, but it has now been working with Online Media Group (OMG) to roll out the programme in the UK.

The scheme marks the first time the mobile operator has tied together its social media and affiliate channels so closely.

People who recommend an O2 phone to a friend either via email, or by sharing the affiliate link on Twitter or Facebook, can receive either a £20 Amazon or M&S voucher, if that friend goes on to become a paying O2 customer off the back of the recommendation.

The scheme is voucher-based for launch, but the brand will consider extending it to offer cash incentives in future – a model which has worked for its German counterpart for some time. It will also look at introducing a more tiered structure to the rewards.

O2’s affiliate marketing manager Ben Hayward told The Drum: “For launch we are just doing a standard £20 voucher offer, which the person who has recommended a phone will receive, as will the person

who has gone on to become a paying customer from that recommendation – once the recommendation has been validated – which could take weeks.

“Once it is more established we may look at playing around with the tiers and CPAs, if for example certain phones are more profitable than others or we have more stock of one particular phone that we want to drive,” he said.

Hayward said the move will also open up opportunities to share expertise with the brand’s award-winning social media team. “They deal with all sorts of enquiries and for us to be able to engage with them over how best to engage with people, how to encourage them to interact with each other, and how to make tweets stand out and be popular, will be really valuable. There is a lot of knowledge within O2 that will allow us to cross over,” he said.

Running affiliate activity on Facebook has previously been difficult because the social network will often “strip out” affiliate links, according to Hayward. However, OMG’s scheme is designed to ensure the link is still recognised as an affiliate link, but made relevant only to the two individuals sharing the recommendation, which can then be tracked so O2 can see the whole journey.

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Advertisers naturally focus on big numbers, which more often than not come from big publishers. But there are other, more imaginative publishers out there recognising the value

in innovative new propositions, as Katie McQuater reports.

publisher innovation

“The market hasn’t changed in a long time, it’s just consolidated around major players. The challenge is how to stand out from the crowd and break the cartel of ‘affiliate super brands’.”

P erformance marketing is an industry founded on innovation, and new affiliate models have always been at the forefront of the continued evolution of digital marketing. The

desire to innovate has led to the creation of mutually beneficial approaches that bring value to advertisers and publishers alike, and it isn’t slowing down. As we approach 2014, advances in technology and creative ways of thinking are creating new and lucrative means for advertisers to increase their return from performance-based channels.

The advent of cashback affiliate sites brought an innovative approach to an existing model by incentivising consumers, while voucher codes affiliates brought incremental value to advertisers – but outwith the big affiliates, smaller publishers today are now using different approaches to create valuable experiences for their visitors, while untapped areas such as video affiliate are seeing greater investment from advertisers looking to capitalise on new opportunities in the space.

The Beans Group, the company behind affiliate publisher StudentBeans.com, created an online version of the traditional freshers’ fair in 2012. The site was built with the insight that to reach 100,000 students, a brand would need to have a presence at 35 offline fairs and spend approximately £70,000. In comparison with offline freshers’ events, the website offered measurable ROI for brand partners and allowed students to focus their interest only on the offers, deals and content that was most relevant to them.

In its second year, the campaign has seen 200,000 conversions (visitors clicking an offer or entering a competition), with involvement from over 100 brands.

“Creativity played a big part in the success of

the campaign,” says Simon Eder, commercial director at The Beans Group. “When we first ran this campaign in 2012 it had never been done before.”

Content was also important in this year’s approach, adds Eder, with advertisers able to get involved in branded content created to fit their objectives in the tone of a typical StudentBeans.com article.

Eder says that the biggest challenge for publishers trying to innovate is standing out from the voucher and cashback affiliates.

“The market hasn’t changed in a long time, it’s just consolidated itself around the major players.

According to Alicia Navarro, CEO and co-founder of Skimlinks, the means of creating revenue from the affiliate channel has been made easier by this technology, meaning it is a “no-brainer” for many publishers. As a result, says Navarro, affiliate marketing has become a “ubiquitous mainstream form of monetisation for publishers; a natural component of their revenue mix”.

Aside from the removal of complexity for the publisher, other benefits of the technology include insight into which retailers are most popular with their readers, the days that are busiest for shopping, and a host of other data.

The challenge is how do affiliates stand out from the crowd and break the cartel of these ‘affiliate super brands’. It comes from adding value, which in turn only comes from innovation.”

Mutually beneficial technology Technology, the foundation of performance marketing, continues to drive the industry’s growth in new ways. Automated link-tagging tools such as Skimlinks and Google-backed VigLink allow publishers to monetise their existing content by changing words or product references into affiliate links.

“For advertisers, we have created this ecosystem of high quality content sites that are incentivised, encouraged and trained to link out to those advertisers natively in their content, and to create more commerce-related content,” says Navarro. “Advertisers derive all the branding and PR benefits of advertorial, with content created naturally by publishers for their readers.”

Mutually beneficial models that derive value for advertisers yet also incentivise the consumer are key to the success of affiliate channels. Adpoints, a viewer choice video platform that rewards people for watching and interacting with video ads in exchange

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“The market hasn’t changed in a long time, it’s just consolidated around major players. The challenge is how to stand out from the crowd and break the cartel of ‘affiliate super brands’.”

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“Publisher innovation is progressing at a faster rate than ever. Unfortunately, most of this innovation goes unnoticed and is therefore under-utilised.”

Video is one area that as yet has remained relatively untapped in comparison with more established affiliate models. Yet according to Cisco, video will account for over half (57 per cent) of all consumer web traffic by 2015 – almost four times as much as web browsing and email.

Video affiliate technologies which enable clickable affiliate links to appear over related videos are offering publishers a means of monetising their content. Coull’s Vidlink technology works by adding contextually relevant affiliate links to videos on publisher websites. According to Rae Rawlings, SVP Europe, maximising click-throughs and conversions is dependent on “targeting content, not people”.

“As video grows in popularity, performance models will continue to play a part in the monetisation process for publishers, alongside other models that recognise the power of video to drive wider branding and engagement goals for brands through association with publisher content,” she says.

However, Rawlings adds that many publishers don’t yet understand how to monetise their video content effectively. “The current formats made available to brands when they choose to advertise through video are restrictive. By this we

The unTapped opporTuniTy of video affiliaTe

mean they don’t let brands associate with the content itself, which would enable the advertiser to provide a more targeted and bespoke advertising experience. Currently a lot of the formats are predicated on tracking people across the internet, not actually focusing on what the video is about and what contextual relevance the ads have to the viewer.”

Jaakko Iso-Järvenpää, senior partner manager at ‘smart content’ platform Kiosked, echoes Rawlings’ comments on the importance of a contextually relevant model when it comes to unlocking the opportunity of video affiliate. The platform, which enables the addition of shoppable elements to images, videos or apps, has seen a 12 per cent increase in time spent on-site when using kiosks in image content.

“When consumers view videos the focus is in the content itself and anything disturbing will interfere with this experience,” says Iso-Järvenpää as he explains why brands have been cautious and slow to adopt video solutions.

“Marketers (affiliate and others) need to find ways to turn advertising into service. Innovation is the key and it should focus on how to capture impulses people get from visual content and how to deliver call-to-action in a non-intrusive manner.”

for Nectar points, segments consumers to show them ads based on their preferences. Meanwhile, advertisers pay on a cost-per-engagement model.

“We’ve found that interweaving relevancy, choice and reward results in a far greater pre-disposition to the messaging and offer,” explains founding director Jason Froggett, who suggests that the future of affiliate marketing lies in the creation of “integrated” rather than “interruptive” online experiences.

“Video is beginning to play a significant role in the consumer’s web experience, so it’s a great opportunity for both advertisers and publishers. However, publishers need to think carefully how they leverage and monetise it. Real estate is limited, so they need to ensure that short-form content isn’t overly disrupted by interruptive formats.”

Size, scale and Cpa – barriers to innovationThe importance of continued affiliate innovation can’t be understated, yet publishers face a raft of barriers – not least fending off competition from larger publishers and missing out on revenue as a result of the last click attribution model favoured by the majority of advertisers.

Andrew Copeland, network director at Tradedoubler, suggests that the focus on “instant return” often leads to innovative ideas being dismissed because they can’t deliver immediate results for advertisers.

“Publisher innovation is progressing at a faster rate than ever. Unfortunately, most of this innovation goes unnoticed and is therefore under-utilised. Naturally, advertisers focus on big numbers, which often come from big publishers. Imagination is key in seeing the value in a new proposition, which has no pedigree in delivering results.”

Meanwhile, the failure of the CPA/last click model to adequately recognise the value of all influencers in the path to conversion has created another barrier to innovation, according to Affilinet MD Helen Southgate, who says that the current model means innovative thinkers simply aren’t being rewarded.

As relevancy becomes ever more important to time-poor consumers, affiliate sites who embrace innovation are delivering results for advertisers. Challenges lie in the form of outdated affiliate payment models and a lack of understanding from advertisers, but what’s clear is that creativity and technology – the backbone of performance marketing – will continue to deliver results for forward-thinking publishers and partners. And this, in turn, is what drives the industry forward.

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Ofgem’s decision to ban energy suppliers from using the cashback model has faced criticism from the affiliate industry. Here, Nathan Salter, chief operating officer of OMG and chair of the Legislations and Standards Committee on the IAB affiliate marketing council, shares his views on what the ramifications

will be for not just affiliate suppliers, but also consumers.

waste of hot air?

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“The regulatory and consultation process doesn’t always seem equipped to hear the arguments and make commonsense adjustments to mitigate damage.”

W ith thousands of sales and considerable monthly advertising revenue at stake, affiliate networks and cashback companies recently joined

forces through the IAB to persuade Ofgem that the cashback model should not be needlessly caught up and damaged by their new regulatory arrangements via the Retail Market Review.

Despite the case we put to Ofgem, we received confirmation that cashback will be not be permissible on domestic energy products because it will impact the customer’s decision to select an energy provider. The reasoning does seem strange, and ambiguously (although positively) it will remain permissible to influence consumer purchases with other forms of reward and incentive.

The fact that cashback will no longer be offered through the likes of Quidco and TopCashback is concerning on a number of levels. It’s not just the obvious disruption to customer acquisition and considerable advertising revenues that concerns. It’s also especially frustrating because it is an unnecessary restriction directly impacting a growing community of empowered consumers. To remove the cashback loyalty option feels like a counterproductive, counterintuitive and incidental side effect rather than a well considered improvement.

The thrust of Ofgem’s “clearer, simpler, fairer” measures is all about ensuring consumers can access information that is less complicated, ambiguous and, overall, far more transparent. It will become easier for consumers to compare providers like for like and so switching to get a better deal should be more practical and less of a gamble. Especially with bills at their current levels, this is good news for everyone. Indeed, focussing on greater transparency, there is nothing that I can really complain about here on any level.

The question is whether banning cashback contributes to Ofgem’s objectives and, if not, why has it happened? Given the commercial disruption, I and others in the industry will predictably argue that it is not necessary. Though undoubtedly important we have to accept that our commercial arguments are more than likely lost on Ofgem who rightly so focus on the interests of energy customers. That being the case an argument that we hoped would not be lost is that cashback sites are completely distinct from energy providers, just as they are distinct from the insurance providers, retailers, travel companies and telecoms providers that they list and where cashback is available.

Cashback users are savvy and can tell the difference between receiving a cash discount from an energy provider and receiving cash from a cashback site which is passing on its advertising

revenue. With Ofgem’s objective to increase shopping around and switching there’s also another compelling argument not to blanket-ban cashback. In short I do not believe that cashback is a complexity or a problem that needs solving and consumers certainly do not need to be protected from something that they value and benefit from.

What I do believe is that the wider publisher community, including cashback sites, will welcome Ofgem’s guidance and clearer parameters that define how best to list an energy advertiser clearly so that consumers aren’t left confused or alienated. Product and tariff clarity would work absolutely fine alongside cashback just as it will with the other types of reward or incentives that remain permissible.

Having chaired the IAB affiliate Legislation and Standards Committee for two years I’ve experienced a few regulatory processes, and the Ofgem scenario compounds a bigger concern that I hold. While it’s probably more widely symptomatic of regulatory change, we certainly see how digital advertising can be impacted by regulatory objectives that have clearly unintended consequences. The Ofgem cashback decision may only be important to those of us that have specific linked commercial interests. But elsewhere regulatory proposals with widely supported broad objectives risk creating huge collateral damage across the entire online space. For instance, EU data protection proposals, which aim to simplify and standardise, propose measures that would undoubtedly cause damage and disruption to both businesses and consumers. All too often, whilst the objective is sound, the measures are not so.

The regulatory and consultation process doesn’t always seem equipped to hear the arguments and make commonsense adjustments to mitigate damage. Of course where there is change there will be winners and losers but it would be good to think (and reasonable to expect?) that effort will always be made to correct unforeseen outcomes and unintended side effects, such as with the cashback banning.

There is certainly a big challenge when it comes to being heard and it is almost impossible for a single business to effect change. This is why, especially within the recent regulatory context, I place a lot of importance on the need to put effort into industry collaboration wherever possible. It’s important to do all we can to educate and therefore influence the relevant authorities. The framework and structure is in place through the IAB. It needs to be put to good use to galvanise a strong industry voice to crystallise not only how we operate and our considerable economic contribution, but also our commitment to the same transparency goals as the regulators. If they understand that we’re all on the same page when it comes to some key issues then perhaps they will pay more attention and take greater care to tread more carefully.

While the Ofgem rules may be set in stone for now, discussions are still ongoing with industry colleagues as to whether a rethink might be at all possible and when that might be. In the meantime, while mainstream consumer demand for cashback may be left disappointed where energy providers are concerned, performance publishers have never struggled to innovate and efforts are underway to fill the gap.

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“The affiliate channel is hugely important for us in tying up our online and offline marketing efforts” Charlotte Heleine, digital marketing manager, Burton

diverse means of return

T he advent of the constantly connected consumer has brought with it a change in the way advertisers interact with their audiences. The affiliate channel is crucial for retail brands adopting

an omnichannel approach to their marketing. Here, we publish two case studies that

detail the role affiliate marketing plays in the omnichannel and multichannel approaches of Burton and Debenhams.

Burton adopts omnichannel approachMenswear fashion brand Burton recently launched an initiative to enable consumers to choose where they would like to purchase. By providing two publishers with exclusive voucher codes entitling customers to 25 per cent off their purchase (irrespective of where they purchased), the brand was able to increase brand exposure as well as footfall to its stores.

By providing customers with the choice of channels to purchase from, Burton saw some impressive results – online, through mobile and in-store. With the increased exposure given across the publishers’ sites, Burton saw a significant increase in activity. Affiliate traffic increased by 260 per cent on the previous week while the offer also converted exceptionally well at 14.5 per cent click to sale.

During the week-long promotion, Burton also increased sales by 395 per cent online and via mobile devices through the performance channel. In addition to this, an integrated approach saw them generate an additional £55k in revenue from in store purchases.

The promotion also had a positive impact on average order values both in store and online. Prior to the offer being run, AOV in store stood at £25. During the promotional period this increased to £27.48. The affiliate channel also saw increased AOV online compared to Burton’s other online channels, with an average order value of £50 through affiliates versus £47 for other channels.

Adopting an omnichannel approach has seen Burton install functionality in-store to ensure all sales generated

through these publishers track in real-time to monitor the effectiveness of the promotion. This enabled a smooth transaction process and ensured the correct partner was rewarded for the sales generated in store.

By providing consumers with the choice and convenience of where to purchase, Burton has successfully leveraged the performance channel to increase sales and drive additional revenue.

Charlotte Heleine, digital marketing manager at Burton, explains:

“The affiliate channel is important to Burton because we’re keen on getting more eyes on the Burton brand so customers realise the evolution

Multi and omnichannel approaches to retail marketing are essential to reach today’s consumer. Burtons and Debenhams adopted approaches which used affiliate channels to enable a choice of purchase location – tying together online and offline.

of the brand. Partnering with our affiliates whilst running our 25 per cent off event creates the opportunity to reach potential customers; once they arrive on site conversions are great!

“The affiliate channel is hugely important for us in tying up our online and offline marketing efforts – our customers can be very promo-driven and they will use all of the available channels to find the best deal. As a brand therefore we need to offer a seamless and consistent experience in order for our customer to redeem those offers in a way that is convenient for them – affiliates who operate across platforms allow us to do just that.”

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THE DRUM 22.NOV.13 www.thedrum.com Performance 15

During its ‘Summer Spectacular’ campaign, VoucherCodes.co.uk worked with Debenhams on a multichannel promotion, delivering 1,650 new customers to Debenhams.com in 48 hours.

ObjectivesThe objectives were to drive a strong year on year sales uplift to hit Debenhams’ challenging business targets for this key ‘Summer Spectacular’ event, engage with new revenue streams and increase offer redemption potential, by driving multichannel sales.

Other campaign objectives were to maximise new customer acquisition by promoting the brand to a high volume, high quality audience, as well as deliver a compelling average order value, despite a focus on reduced price stock.

ExecutionA market leading ‘Exclusive Extra 10 per cent off Online & In-Store in the Up to 25 per cent off Summer Spectacular’ was secured from 24-25 May 2012. Users were able to access the voucher for redemption in one of three ways: online by entering the voucher code at the checkout, by showing their iPhone app barcode in-

store, or by printing out a voucher to be redeemed in-store.

To maximise results within this short promotional window, VoucherCodes.co.uk offered Debenhams the following coverage package:

• ‘Code Alert’ email – A fully branded email sent to over five million subscribers, optimised to reach the most active shoppers before the rest of the database. The send was timed to reach all subscribers before lunchtime on Thursday 24 May, therefore maximising the redemption window.

• Mobile – fully branded banner placement on the VoucherCodes.co.uk app, visible to every user opening the device during the 48 hour period, as well as a push notification targeted to its most active ‘opt-in’ members.

• On site – premium on site placements including homepage banner, carousel banners and a top listing within VoucherCodes.co.uk’s popular ‘Fashion’ category, providing exposure to over five million monthly visits.

• Social media – promotional posts to the most engaged fan base in the industry.

• Search – PPC bidding rights were secured providing peripheral search coverage for

relevant brand and voucher related terms.

Results & ROI During the 48 hour period the following results were achieved:• 5,057 online sales• 1,659 new customers to Debenhams.

com• 4,300 in-store sales• Increased existing customers’ average

transaction value by 27 per cent, when compared to their last purchase period

“As a business, multichannel is a key focus for us and it’s where we believe significant growth can be generated,” says Gill Makepeace, affiliate marketing manager at Debenhams. “Consumers want to interact with us via multiple channels and in a way that is convenient for them, whether they are in the high street, browsing on their mobile whilst waiting for the bus or at home with their laptop on the sofa. Commercially too, multichannel customers are very valuable. A customer that interacts with us via two channels is likely to spend almost double that of a customer that just uses one. And if you loop in a third channel, then their spend almost triples.”

Debenhams anD VouchercoDes multichannel promotion

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www.thedrum.com 22.NOV.13 THE DRUM16 Performance

How do you manage international affiliate relationships and what lies in store for performance marketing in

2014? These were just some of the questions we put to our panel of experts. Here’s what they had to say...

trusted advocates

How can the publisher/network relationship be optimised?

Martin Ferguson, director of publisher services, Rakuten LinkShareWe are in a relationship-driven industry, so continuously improving the relationship

between publisher and network is paramount for us. We’re the match-making service between publisher and advertiser so the publisher must feel that the network understands its business model, and completely trust that the network can sell the benefits of that publisher to the clients if they are to create lasting relationships.

As a network we have the responsibility to be the publisher’s ‘trusted advocate’ and this only comes with a full knowledge, understanding and trust of how that publisher could work with a brand. For example, we can identify the sites where video yields the best results or where a particular product sector can excel. The relationship will only grow if the network facilitates the relationship, while simultaneously advancing and improving its services.

Carla Arrindell, client services director, OMGThe key here is direct engagement and greater transparency. As publishers become

more sophisticated in their ability to define, target and reach consumers, the sales channels for networks, and in turn their clients, continues to broaden. But, to attain this level of detail, there needs to be regular engagement and greater transparency to ensure that these opportunities are leveraged fully. We engage with

our publishers regularly to keep abreast of how their model is evolving and innovating, and at the same time share data and insights we have from our advertisers to create and identify further opportunities for growth.

Adam Ross, chief operating officer, Affiliate WindowThis is an area that needs constant attention. Affiliate marketing works exceptionally well

for those that understand it, but is a minefield for the uninitiated. Networks have a responsibility to provide solutions to alleviate this and to lower the barrier to entry for publishers. This can be achieved through offering better tools or simplifying our interfaces, but also through providing a broader range of transparent payment models. I would emphasise the word transparent because in the advertiser’s quest for improved cross-channel ROI, publisher ROI is often forgotten.

Helen Southgate, managing director UK, AffilinetUnderstanding a publisher’s business model is vital for a good working relationship. It

might sound obvious, but it is something that a lot of networks often overlook and it, rightly, really frustrates publishers. Networks must understand how publishers make money and the tools they need to be able to do that. That means networks need to ensure that their teams have broad experience and skills across multiple disciplines. Equally though, publishers need to be transparent with networks, open to the ideas of doing things differently, and be proactive in taking new ideas to networks that will help advertisers to do things differently.

How can advertisers decrease their reliance on cashback sites?

James Milne, head of client services UK, TradedoublerThe reliance on incentive site traffic has long been a talking point in the performance

marketing channel and the stock answer seems to be switching to some kind of weighted attribution based payment model, but this is missing the point a little…The most important thing here is the value of the customer, not the value of one part of the sales chain, which delivered that customer. We need to be looking at the true value of the customers we are delivering, the journey they take to sale (across all channels), and what they go on to be worth. Only when we understand all elements of that equation and the final answer can we be in a position to start looking at how to change it.

Stephen Kerin, managing director, Webgains UKThis will always be a contentious subject. Cashback and voucher sites will always be

among the big volume drivers and it’s important not to overlook their contribution, both in terms of volume and incrementality. That said it is of course important not to be over-reliant on such publishers. Ultimately advertisers should be looking to achieve a healthy mix of publisher types and it is this which should shape their recruitment strategy. Advertisers should speak to their network account manager for advice as to what a healthy publisher mix looks like and identify the gaps in their current coverage.

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THE DRUM 22.NOV.13 www.thedrum.com Performance 17

Jo Thomas, assistant head of performance marketing, DigitasLBi Advertisers can decrease their reliance on cashback by working more strategically

with other types of affiliates and not relying on the larger cashback sites to generate high sales volumes. A number of clients want to reduce the reliance on cashback but very few actually do anything about it.

Tina Judic, managing director, Found Cashback sites, voucher code sites and social codes, and what each brings to the market, remain a core topic of discussion.

We live in a world where everyone is now seeking a bargain, so the first question any advertiser needs to ask is whether they are comfortable to be seen in this bargain-seeking market or not?

If an advertiser understands what part cashback plays in the conversion process, a much more informed decision can be made to embrace, remove or realign. It needs to know if cashback touch-points are integral, or are they a bit-part player? Could they be managed differently? And very importantly, does the brand operate well in a cashback scenario? But moving beyond the initial sale, it needs to also understand what impact cashback is having on the lifetime value of the customer? Only when these questions are answered can decreasing reliance be contemplated.

Helen Southgate, managing director UK, Affilinet Decreasing reliance on a channel is not the same as decreasing sales. Cashback forms

a very important part of many affiliate programmes and we should continue to optimise that channel. Equally though, the same amount of focus should be given to the rest of the affiliate channel, particularly in content, which is where the majority of publishers sit. Advertisers should work hard to balance out their programme and work more intuitively with the medium-to-long tail. To do this though they have to make sure they make their messaging relevant and have good content and tools for publishers to leverage.

What are your tips for managing international affiliate relations?

Kevin Edwards, strategy director, Affiliate WindowIt’s important for affiliates to recognise there are cultural differences around promotional

activity between regions and countries. The UK has probably the ‘cleanest’ affiliate mix in the world due to a strong central, self-regulatory framework and certain traffic or promotional mechanisms allowable in the US or Germany, for example, wouldn’t be allowed here. As a general rule, if your activity is permitted in the UK you are probably secure wherever you go. Advertisers should be mindful that their T&Cs have to reflect this mix. They should also consider that whilst mainstream networks overseas may forecast good sales volumes this may not take into consideration this quality threshold that many UK brands work towards. I would also recommend advertisers get the basic reporting right. We’re able to split sales by territory but just because an affiliate is geographically based in

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www.thedrum.com 22.NOV.13 THE DRUM18 Performance

one country it doesn’t mean they will not have traffic sources elsewhere. Similarly having the ability and resource to manage many supplier relationships may be necessary as there is no such thing as a truly global affiliate network, therefore a variety of local experts may be your best bet.

Tina Judic, managing director, FoundDigital marketing gives us global reach, but when it comes to international affiliate relations it pays to take the time to get

to know individual markets, the key brands and the way customers engage online within each market. It’s so easy to assume that you can simply replicate a UK campaign and enjoy the same success with it elsewhere. It’s also important to understand the differences of the search engines – from the functions available within Google across the markets to the varying search engines who dominate in different countries. For example, Baidu owns 67 per cent market share in China (a country with 513 million web users and 164 million online shoppers) and, whilst technically it’s not dissimilar to Google, there are many variations to the standard Adwords model.

Carla Arrindell, client services director, OMGCommunication and setting and managing expectations is key – many brands will

manage an international campaign from a central contact based in one territory, which can make understanding the opportunities and limitations of a specific market difficult. Similarly, ensuring that publishers across the various territories understand a brand’s identity and requirements can be challenging, so clarity on all these aspects is vital.

Having an agency or network team on the ground is crucial to achieving this. Every market has its own nuances and unique trends, and to truly drive success in each territory a team or contact who knows the

market well and can turn that expertise into tangible strategy and tactics is key.

Martin Ferguson, director of publisher services, Rakuten LinkShareWorking with a trusted global network that can advise you on publisher relationships

abroad is the best place to start. Partnerships with well known international publishers can do wonders for unknown brands in a new country, introducing your brand to new audiences through a trusted publisher and associating your brand with the right sites for your audience. Recent research we did with Forrester reveals that three quarters of UK shoppers have bought cross-border in the last 12 months highlighting the potential of an international presence.”

What are your predictions for performance marketing in 2014?

Jo Thomas, assistant head of performance marketing, DigitasLBi Tracking functionality will improve; this includes cross device tracking, offline to

online and via mobile devices. Tracking will become more granular and easier to report on which will enable clients to stop thinking in channel silos. This will allow them to have a more holistic view on their campaigns so that they can drive the channels that are working most efficiently for them.

Stephen Kerin, managing director, Webgains UKSomething we’re seeing a great deal at the moment is multiple touch-points across

multiple devices and we’ve been collecting some significant and interesting user journey data. I expect that as we head into 2014 we’ll see such data put to real use. There’ll be more and more people looking to find ways of implementing multi-device multi-publisher

attribution and this will go hand-in-hand with the progression of the multi-screening trend. We know the technology is in place for multi-screening to shape search and I think we’ll also start to see publishers exploring ways of harnessing multi-screening habits in their own activity.

Adam Ross, chief operating officer, Affiliate WindowAttribution is a critical topic and, when used correctly, can be a force for positive change

and growth within the affiliate channel. If advertisers start to really see the significant value publishers are delivering across the purchase cycle and beyond, it could pave the way for improved payment models that encourage and inspire new publisher types. However, it is crucial advertisers avoid seeing attribution as a cost saving exercise and rather see it as an important step in the quest to better understand consumer behaviour. We must also bear in mind even the most sophisticated solutions are blinded by the increase in multi-device journeys and these are on the rise.

Dan Cohen, regional director, TradedoublerIn short, it will grow! Firstly, in terms of traffic: mobile and on-to-offline will become integral

parts of an advertiser’s affiliate program. There will also be a rise in local affiliate marketing ie advertisers being relevant “here and now” and having geo-targeted vouchers and deals. In addition to this, the industry will further embrace social, video and offline – for example pay-per-call. It’s going to be about understanding the user journey and their path to conversion better.

Secondly, it will grow in terms of data: advertisers will provide data to networks, for example, data on the lifetime value of consumers, other channels, and cross-device activity. This will mean that we can all make more intelligent, insight-based decisions which will make us more effective at new customer acquisition.

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THE DRUM 22.NOV.13 www.thedrum.com Performance 19

KNOWLEDGE

BANKThis section showcases

performance industry insights. For the opportunity to share your knowledge,

contact James McGowan at [email protected]

or call 0141 559 6072.

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www.thedrum.com 22.NOV.13 THE DRUM20 Knowledge Bank

“Online browsing is not a linear experience – shoppers don’t do one thing, complete it, and then move on to the next thing. It’s easy for consumers to get distracted before they decide to put items in their basket.”

RAKUTEN MARKETINGT - +44 (0)20 7427 8120W - www.mediaforge.com - @RakutenMKTG_UK

HOW TO RE-ENGAGE YOUR POTENTIAL

CUSTOMERS ONLINE

Online sales in the UK are predicted to reach £69.7bn by 2020 according to the investment fi rm Panmure Gordon. Due to this growth, brands are pumping

their budgets into the digital channel. Most of this is aimed at getting customers to the website, so they can then make a purchase.

However, industry estimates show that a massive 98 per cent of these potential customers will not go on to make an online purchase there and then. This is why retargeting (serving relevant and targeted ads to people more frequently after they have left your website) should be a key part of any digital marketer’s toolkit.

Online browsing is not a linear experience – shoppers don’t do one thing, complete it, and then move on to the next thing. At any one time, a typical consumer will be doing several things; such as shopping on multiple sites, streaming music and instant-messaging friends on social networks. It’s easy for consumers to get distracted before they decide to put items in their basket and complete a purchase.

As well as this, and in part because of it, the retail purchase journey online is complex. Despite individual items sometimes being relatively low value, shoppers often engage in a long ‘research’ stage before committing to buy. Clickstream has reported that only 20 per cent of conversions from research to a completed sale occur in the fi rst 24 hours for clothing purchases. On average, one in three conversions occur 30 days or more after initial research begins, and the volume of research is not linked to average order value.

There are three ways that digital and performance marketers can utilise re-targeting and reactivation techniques. This means that when consumers leave your site, you can re-engage them with content and products that they are more likely to have a genuine interest in.

1. Search-Initiated Retargeting This allows brands to advertise to consumers who are using a search engine to research products that you offer. Search retargeting extends the interaction with the same searchers when they move away from search query results pages, by directly serving the consumer ads as they move onto other websites. Given the dominance of search engines in our online lives this is very powerful. The most cutting edge search retargeting ads are dynamic, including technologies such as in-ad search or video ads.

2. CRM Retargeting CRM retargeting is enabled by brands sharing their customer relationship management (CRM) data with a retargeting partner, who then anonymises the data and uses cookies in order to fi nd those people online. It’s an effective way to re-engage both online and offl ine shoppers who haven’t purchased for a while. The ad strategy can be tailored to that shopper, so you can serve different ad creative to consumers who originally bought from you online vs. offl ine or shopped sale items vs. new arrivals.

3. Audience ExtensionThis is a technology for acquiring new customers. It analyses existing customers of your brand to

help you fi nd people with similar online profi les and behaviours. This means you can target potential customers with qualifi ed interest in your brand based on the the web pages and sites they visit (e.g., travel, fashion, or fi nance).

Due to the long and complex online customer journey, creating multiple opportunities to engage with these shoppers is essential to converting sales online. Retargeting presents an ideal opportunity to engage with people that may well otherwise never convert to a sale, or choose a different brand over yours when they do. Whether the content that reaches the consumer keeps your brand front of mind through a month-long ‘research’ journey, or provides the fi nal incentive that convinces them to buy, it’s a tool that digital marketers should include in the marketing mix.

Tony Zito, CEO of Rakuten MediaForge the Display and Retargeting arm of Rakuten Marketing

AFFILIATE MARKETING GETS SMARTER

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THE DRUM 22.NOV.13 www.thedrum.com Knowledge Bank 21

AFFILIATE WINDOWT - +44 (0) 844 557 9240E- strategy@affi liatewindow.com

W - www.affi liatewindow.com- @AffWin

The affi liate industry is an evolutionary channel, responding and adapting to changes in consumer behaviour and technical innovation. Occasionally game

changing propositions emerge such as the 100% cashback model, representing a fundamental shift, but more often than not advertisers will react more passively to the channel’s ebbs and fl ows.

It needn’t be that way and on the cusp of a new year there are changes many programme managers can make that both shed light on the affi liate channel’s value as well as demonstrate increased acumen and targeting.

With that in mind, here are some actions account managers can take in 2014 to ensure they benefi t from the industry’s increased sophistication.

1. Not all mobile traffi c is the sameWe should all know by now that granularity when assessing who individual affi liates are, how they work and the consumers they can target is essential. With our latest mobile fi gures showing one in four clicks originating from handsets and tablets, we now need to add an extra layer of understanding.

Take group buying for example. Working with several of the major players in the space we know these advertisers over-index on handset traffi c and sales. Drilling down deeper we can see email affi liates will outperform compared to other affi liates on these campaigns to the extent that is not uncommon for them to pull in as many sales via handsets as any other device.

This multiplier effect means advertisers with mobile optimised or favourable propositions need to start paying attention to those affi liates pulling in the mobile

traffi c. Challenge your network to offer the insight you need to support your efforts.

2. Stop measuring clicks, start measuring valueI’m not going to bore you all senseless with the tired (typically misguided) attribution piece, but let’s make an agreement that in 2014 we will start to understand individual affi liates’ contribution around the click: that is where they fi gure in the path to purchase and, signifi cantly, the quality of the customers they deliver.

Metrics that are important to advertisers will vary (churn, average order value, frequency of purchase and so on) but when benchmarked, will start to truly paint a picture of value with affi liates fairly rewarded for their efforts. It’s not quick, but it shouldn’t be complicated.

3. Don’t be so suspiciousSomething that often baffl es is the advertiser’s desire for a more diverse affi liate base whilst simultaneously rejecting countless opportunities offered. There is a natural caution within the channel about promotional activity and the industry can sometimes be opaque at best, but we invest heavily in compliance tools, procedures and physical resources to ensure affi liate lists offered are as ethical as they can be.

Given the ongoing need for diversifi cation, give affi liates the benefi t of the doubt, test, scrutinise and optimise.

4. Multi-channel means multi-salesAs I mentioned, granularity is a critical consideration when managing an affi liate campaign. This is also exemplifi ed by the increasingly multi-channel affi liate offerings available. Take a major voucher code or cashback site for example. They may offer an app,

mobile site, desktop presence, solus and weekly emails, push notifi cations, in-store check-ins, voucher redemption and tenancies alongside standard CPA.

Recognising these routes to market can hit customers at different times and at different stages in their purchasing path, and should ultimately help drive better targeting. Assess your efforts in 2014 and analyse traffi c sources and sales from individual affi liates based on your agreed affi liate promotional plans.

5. Want growth? Go West (and North, South and East)The UK rules the digital waves. We’re often reognised for boasting the most robust and sophisticated e-commerce infrastructure in the world and overseas customers are acutely aware of the choice, delivery and service available from both British retailers of all sizes.

Where there are customers, so there will be affi liates pushing traffi c to them. Understand where your affi liates are based, where their clicks are coming from and the intricacies of their markets and your programme could enjoy an incremental boost.

Whilst this list is far from exhaustive, it hopefully shows how many affi liate programmes could be tinkered with, tweaked or even completely overhauled to ensure they work harder and smarter for all involved. Underlying everything however, is commitment through resource and insight. No one said affi liate marketing was easy but with the right attitude and tenacity, 2014 could shape up to be its most successful year to date.

Kevin Edwards, Strategy Director, Affi liate Window

AFFILIATE MARKETING GETS SMARTER

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www.thedrum.com 22.NOV.13 THE DRUM22 Knowledge Bank

“Generating more traffic to your website is the first stage towards a successful online marketing campaign, but it is just as important, if not more so, to work on converting these visitors into paying customers.”

ABSOLUTE DIGITAL MEDIAT - 0800 088 6000E- [email protected]

W - www.absolutedigitalmedia.co.uk- @AbsoluteDMedia

PREACHING TO THE CONVERTED?

What do you do if you have spent effort, time and money on successfully boosting web traffi c to your website (using techniques such as content

marketing, search marketing, affi liate marketing, social media, etc.) but have failed to see an equivalent boost in conversions?

Generating more traffi c to your website is the fi rst stage towards a successful online marketing campaign, but it is just as important, if not more so, to work on converting these visitors into paying customers.

Every single aspect of your website plays an integral role in your conversion rates, from content, to landing pages, to usability. The answer is simple, make life as easy as possible for your users. Ensure that your site is accessible, improve the navigation and make sure it works in common browsers.

The right content can also be enough to convince your customers that you offer the best product or service for their needs. Work on striking the best balance between entertaining and persuading your readers and providing them with the relevant facts and information. Social media can also act as a fi nal stepping stone towards a purchase. Those with last minute concerns or queries can speak to a member of your team for the reassurance they need to part with their cash.

Technical faults and slow loading speeds are two of the most common blockages to conversion. In fact websites that take longer than 3 seconds to load have been proven to lose over half of their customers, so this really needs to be a priority, especially for e-commerce sites in the run up to Christmas.

Too many steps to purchase as well as asking consumers for too much information can also have a fatal impact on your conversions. Many people are still cautious when it comes to buying online and demanding their email address, date of birth and mobile number could spark alarm bells.

In contrast, it is important to make sure the information they do seek is readily available when they need it. A clear returns policy and information on delivery costs will be well received and goes a long way to prevent unnecessary loss of sales.

For those who use paid search advertising, the focus should be on high quality landing pages. For

limited time periods, such as during sales or offers, additional landing pages with engaging designs and content can signifi cantly boost conversions.

Alternatively, social media is a really effective tool for creating hype around sales and promotions. Increasing the frequency of your posts, engaging with more users and even running competitions can all increase activity substantially within a short period of time. Facebook PPC marketing is also a great way to help your content reach thousands of extra people.

When the average customer makes a purchase, they are excited, even impatient, about receiving their goods and they appreciate being kept informed during every stage of the process; before and after sale. Follow up emails can simultaneously do this while also reminding your customer of your other services, new product lines or special offers in the pipeline.

This same principle can be used across your marketing channels. Using social media you can fl ag up those customers who have made a purchase or enquiry and start to build up a relationship.

Similarly, with paid search advertising, remarketing helps you to reach out to those customers who have already displayed an interest in your site or made a purchase. The real potential is that you can target not just those who have already visited your site, but users who have been to a specifi c page allowing your campaign to be as focused, and successful, as possible.

Ben Austin, CEOAbsolute Digital Media

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