Packaged goods brands have been notoriously slow to embrace the Web. In a world where marketers are used to building emotional connections with often very dull products through the use of creative television campaigns guaranteed to be seen by millions, brand-building via the Net has proved a difficult notion to conjure. Yet, faced with a fragmented media landscape and the ubiquity of the Net, packaged goods, from fizzy drinks to toilet paper, are having to change tack.
The advent of broadband, rich media and Web 2.0 has made the internet much more than a useful information resource. It is fast becoming a medium associated with entertainment – an environment that packaged-goods marketers know. The Net, however, is a very different beast to TV and, while the possibilities seem endless, there are very different parameters online. Once marketers sought to drive footfall into stores – now it is the language of cost-per-acquisition and traffic as consumers move their media consumption and, increasingly, retail spend online – £11bn was spent online in the UK last year (Verdict Research).
Travel and financial services adapted quickly to the Net and, for these sectors, affiliate marketing has proved an invaluable source of sales.
For the display of ads or links on third-party sites, the relationship between merchant and publisher has been made all the easier. When online users are directed, say, from Nectar to Norwich Union, they fill out a form on the NU site to enrol as a new online customer. NU – the merchant – pays the affiliate publisher for an action – sale/purchase – and rewards the affiliate on a cost-per-acquisition (CPA) basis.
Many packaged-goods marketers might think this model means it has no place in the marketing mix for their brands. Indeed, they are just getting to grips with the opportunities offered by display ads and rich-media content online and, for them, the affiliate channel is an unknown quantity. When asked direct, marketers at companies such as Coca-Cola were not even certain of the nature of affiliate marketing. “We tend not to participate in affiliate marketing in the traditional sense, but instead look to develop online relationships that are mutually beneficial and stretch further than the traditional click-through interaction that is associated with affiliate. Examples of this are our recent partnerships with iTunes and Toni & Guy, as part of the recent Diet Coke Break on-pack promotion,” says Louise Schrimer, head of digital marketing at Coca-Cola Great Britain.
Explaining this attitude, Rob Tokolics, head of affiliate marketing at Zed Media, says: “Affiliate marketing is still viewed very much as a sales-based channel, where online checkouts are the measure of success. And, of course, this is not how consumers purchase packaged goods.”
There is, however, more to the affiliate channel than sales and brands think, according to Nicky Iapino, former managing director of AdLink Group’s affiliate marketing business Affilinet, and now AdLink Group managing director: “We are slowly seeing packaged-goods brands look at using affiliate marketing. Once they appreciate the opportunities for data capture through registration and online incentives, such as vouchers, affiliate marketing becomes more attractive.”
Tokolics agrees: “The opportunities for data collection and branding have always been part of the affiliate mix, and are being used by many companies wanting to use the internet to drive offline activity. The collection of e-mail addresses or phone numbers, in return for free samples, downloads or prize draw entries, is a longstanding affiliate tactic used successfully by many companies.
“Traditionally, an issue with affiliate marketing had been the inability to run fixed-length promotional campaigns, such as would suit the packaged goods environment. This perception is years old, however, as more advanced tools and methods make such campaigns commonplace. The answer lies in offering tailor-made solutions, specific to a client’s objectives.”
Buy.At chief executive Kevin Cornils says that packaged-goods brands traditionally used above-the-line advertising to raise their brand profile, but he says the same objective can be achieved through affiliate marketing. He says: “Many affiliates have highly-targeted audiences of specific demographics and ages, so merchants can use branding on affiliate sites to drive action.”
Bounty is one such site, and is a “super affiliate”. Bounty targets new mums and is a forum for advice and tips. Many household goods are affiliated to the site, from nappies to detergents. Iapino says Bounty is proof that anything from shampoo and toothpaste to cleaners, can be pushed via affiliates.
Cornils adds: “Brochures have been used to push test-drives in the motor sector, and the same can be done in packaged goods. © Information can be taken from users who sign up to register for certain products or actions, to target them at a later date with new campaigns and products. Coupons or vouchers are highly trackable, so you can identify which consumers went on to purchase and then target them at a later date. Affiliates can then be rewarded on different levels – either by downloading a voucher or by the final sale.”
More than sale
Iapino says Affilinet is already working with packaged-goods brands: “We have had four or five briefs for packaged-goods brands this year. We are also talking to agencies about their packaged-goods clients with a view to rolling out programmes. The channel is becoming more front-of-mind as they see what affiliates can do, and, for this sector, it’s become much more about lead generation and brand-building than sales. It’s a good vehicle for capturing information and raising brand awareness.
“For instance, we’re working with pet food brands Pedigree and Whiskas and have set up successful affiliate programmes through our network. Pedigree asks visitors to sign up to register in order to print off a coupon which is redeemed in store.
“Previously, at another network, I worked with Ariel on a campaign that saw users register to receive a sample. Whiskas has a similar mechanism, encouraging users to register to receive a kitten pack. The user enters their own details and that of the cat. That means Whiskas can target the user as the kitten grows up.”
But TradeDoubler head of consultancy Sarah Escott says, “Some brands get it more than others. It is a challenge to get their cash. They are used to having wizzy sites to engage consumers online and don’t see the value of the affiliate channel. But affiliates can use content to drive them to sites where they ultimately engage with the brand and interact. They’ve been used to in-store promotions and trial, they just need to transfer these online.”
She adds that there needs to be more understanding and cohesion within marketing: “Often the budget to fund product trials of couponing is from a different area to the digital budget, and therefore they are not operating together. The person who controls the online budget may have little input in mechanisms to drive sales. The opportunities for brand-building are huge – targeting users where they are, with the right brand and content.”
Free for all
Being where consumers are is crucial to affiliate, and, as ever with the Net, behaviour changes quickly. Iapino says Bounty is not alone in bringing packaged goods to the online audience. There are many loyalty and discount sites that drive traffic, sampling and purchase. Sites include Greasypalm, iPoints, Pigsback, and Quidco. And all agree these sites are growing in popularity. “Freebies and incentives will become increasingly important,” says Iapino.
Quidco is an online, cashback co-operative. All revenues are returned to affiliates, while Quidco receives a £5 annual fee. In its first 18 months, it generated over £50m and has about 1,400 merchants registered on the site. It is confident of its position, and director Paul Nikkel says: “Cashback co-operatives are growing in popularity. Price comparison sites fulfilled a role for a while, but as awareness of potential bias spreads, consumers will look elsewhere. Just one in three online shoppers go direct to a site, choosing instead to go to a third-party and get money off.”
It seems that packaged goods must wake up to affiliate marketing and take advantage of the data capture, profiling and opportunities for repeat marketing that the channel offers. Cornils, adds: “The onus is on the networks to offer technology and build bespoke solutions for packaged-goods marketers. The channel can be a great medium to drive traffic, trial and ultimately build brand awareness and engage consumers. We have to drive the growth by coming up with new ideas and offering appropriate solutions.”