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Rakuten Marketing Blog

How Personalization Successfully Drives Affiliate Marketing

Posted on Thu, Sep 22, 2016 @ 17:09 PM by Daniel James

Advertisers and their affiliate publishers share an important goal: to increase conversions from affiliate-driven traffic. Promotions have been a long-favored tool for converting site visitors into paying customers, but another is emerging that doesn’t eat into the advertiser's margins. In this post, special guest and marketing expert Liad Agmon of Dynamic Yield provides high-level insights on how to get started for success with personalization.

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Personalized website content to resonate with visitors is delivering more sales, revenue, and profit for the entire ecosystem. There are many ways you can integrate personalization into your marketing strategies, but how successful is personalization? We’ve seen simple tactics, such as using price to optimize product sorting by affiliates, deliver a 10% boost in revenue. At the other end, we’ve seen automated personalization deliver a 100% increase in profit (not just sales!). The equation we’ve seen over and over is:

Profit = relevanceX

Put simply: If you increase content, product, and offer relevance by say 20%, you will have a multiplier effect in your sales and profits. The increase is sustained because the more your increase the relevance, the more you’ll reward your affiliate partner, who will continue to send increased traffic. And, since most retailers operate on an economy of scale, an increase in transactions will allow you to lower your shipping costs and even negotiate volume discounts with your suppliers, resulting in higher profit and better margins.

4 Steps to Getting There (Track, Segment, Act, and Learn)

Success in personalization requires the asking of two key questions:

"What do I show a given user in a given context in order to maximize yield?"

And "how do I do it at scale?"

To answer these questions, there are four steps you must take:

Step 1: Tracking

The first step is to track your affiliate traffic across all customer touch points. This can include the web, mobile app, customer emails, and digital ad campaigns. Which emails do users open? Which products do they click on? What devices do they use the most to engage? Is there a time of day when display ads garner more clicks? All of this provides insight into what content is relevant to each consumer.

Be sure that the tracking system you use is able to capture interactions on an individual user basis; you’ll need that level of granularity to change your website experience for them.

Step 2: Segmentation

The biggest problem I encounter with e-tailers is that they treat all of their customers exactly the same. I’m always amazed to see women’s undergarments on the home page of a site where I, a male, am a regular shopper. Real estate is valuable (even more so on mobile), so why would any retailer waste it by showing me irrelevant products?

Look at the data you’ve tracked and identify the patterns. Do women from Affiliate A look at shoes more than dresses? Do men from Affiliate B have a higher AVO than those from Affiliates A and C?

Use all of your data including data collected from your own website, and also leverage other forms data like context (location, device type, IP address etc), 2nd party data, 3rd party data from data exchanges, and your own CRM and purchase history data create robust audience segments. That way, when a user from say, Affiliate A click on your ad, you will immediately identify to belong the right audience segment and will know what to show them in order to grab their attention.

Step 3: Act

Here’s where you need to predict what’s relevant by segment so you can optimize yield. But don’t rely on your gut feeling. If women from Affiliate A are more apt to buy shoes, then your destination URL should take them to a shoe category page. And if you have 300 products in that category, find more ways to personalize them further (designer vs. budget friendly, pumps vs. outdoor wear). 

The question to ask yourself is "are these the best banners to show for this specific affiliate’s traffic?" Perhaps banner ads without calls-to-actions perform better. We’ve found this is an area where retailers benefit from substantial experimentation because the revenue impact is huge, easily reaching millions of dollars.

This step is particularly urgent for mobile, where real estate is even more limited, which makes all of the decisions harder.

Step 4: Learning

We all have hypotheses. All retailers have merchandisers on staff who make educated guesses on which landing pages will work for each demographic. But given the volume of traffic that you pay for (at a price that goes up each year!), you’ll need a way to automate those decisions so you can scale it. You’ll need to qualify these decisions empirically before moving on the next idea. The more you speed up this process, the faster you’ll see better results.

The truth is, a human doesn’t have the capacity to curate content and offers so that it delivers a personalized website experience across hundreds of product categories. This kind of testing and learning must be done with the help of machine learning and advanced algorithms.

Choose a Partner to Help

Dynamic Yield and Rakuten Affiliate Network

Dynamic Yield offers Dynamic Links, a customizable link that lets you easily define multiple destination URLs for a single source URL or ad placement. Using advanced machine learning, Dynamic Link auto-optimizes the traffic flow traffic flow to intelligently route users to the right destination within a retailer’s site for maximum conversions and yield. This powerful tool can be used by advertisers and publishers in the Rakuten Affiliate Network. For more details, reach out to your Rakuten Affiliate Network account team and Hallie Gellman from our Business Development team, or click below to schedule a demo from Dynamic Yield.

At Dynamic Yield, we help retailers maximize affiliate revenue by quantifying, optimizing and personalizing every customer interaction in real time, across any channel. We are the only Unified Customer Engagement Platform (USEP) that offers customer segmentation, automated personalization, yield optimization, recommendations and 1:1 omni-channel messaging across web, mobile apps, and email in a single platform. Click below to schedule a demonstration today.

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Tags: Affiliate Marketing

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