Global Affiliate Marketing:Approaching international, regional & local strategy

Peter Figeuredo: Partner, Global Head of Client Services, House of Kaizen

James Maley: Head of Corporate Clients Europe, Tradedoubler

Jess Nathan: Global Affiliate Manager, Hilton Worldwide

Agenda

• Market Overview: USA & Europe• Top affiliates • Vertical affiliates• Mobile• Legal considerations• Attribution

US market overview• B2C ecom sales will grow 12% to $384.8 billion

in 2013 (30% of worldwide ecom) • US remains the largest spending country online

but China is closing fast • Avg B2C ecommerce sales per user reach

$2,466*

• Advertisers with programs see 23% of their online sales coming from Affiliate**

Source: *eMarketer, Jan 2013, **AffiliateBenchmarks, 2012

European opportunity

• 289.4m people online

• Average 30 hours a month online

• $1,738 average consumer spend online in 2012

• $111bn online retail spend in EU in 2012*

• 12% annual growth forecast over next 5 years*

• $5bn sales revenue driven within UK affiliate channel

Where is the opportunity…

Affiliate ad spend is expected to grow in H1 2013

+15% UK

+10% Germany

+7% FranceSource: *Forrester European Online Retail Forecast 2011-2016**PhoCusWright European Online Travel Overview December 2012

Top affiliates in the US• 49% of US internet users 18+ will redeem a digital coupon/code for online or offline shopping *

• 55% of respondents said they always check for deals before purchasing

• 43% said promotional offers on coupon or deal sites often close the deal if they are undecided on a purchase

• 48% believe promos on coupon or deal, blogs, loyalty, cash-back, or comparison shopping sites are better than direct retailer websites **

Coupon & deal affiliatesCash back affiliates

Comparison shopping affiliatesLoyalty affiliates

Source: eMarketer, Dec 2012, Forrester Research, 2012

Top affiliates in Europe

Cashback & Loyalty

Meta & price comparison

Voucher / coupons

Supplementary paid search

Closed networks

• 95% of online consumers compare prices online*• 73% download coupons online• Over 40% of consumers via affiliation go direct to their favourite loyalty, cashback, voucher site• 40 – 60% multi channel purchases within affiliation end on a top partner site

Vertical affiliates: US

• Advanced multi-channel journeys

• Vertical sites drive traffic

• Purchase on cashback/loyalty

Vertical affiliates: UK, France and Germany

Vertical affiliates: Nordics

• More blogging and user generated content sites

• Consumers captured at point of purchase

• Reviews/ recommendations more influential

Vertical affiliates: Italy and Spain

• More PPC/SEO/SEM

• Lack of quality content

• Cashback sites starting to develop

• Combined cashback and content offerings

Vertical affiliates: Eastern Europe

• Affiliate channel developing

• CPC prevalent

• Content sites developing

• Looking to UK as a model

Vertical affiliates

Working with niche affiliates to grow revenue

11/1/2012 11/15/2012 11/29/2012 12/13/2012 12/27/2012 1/10/2013 1/24/2013 2/7/2013 2/21/2013

Content affiliates drive the most value

THE VALUE OF REVIEWS

• PhocusWright reports that people who read online hotel reviews are 59% more likely to book

• A 2011 Forrester study found that close to 50% will not book a hotel without online reviews

• Hotels which engage with guests see a 6% increase in review scores

Legal considerations in US

TAX LAW

TRADEMARK

COOKIES

US LAW

Soon to follow EU law (IMHO)

Bid on any keyword but don’t confuse the consumer

See colourful and confusing graphic

Everyone can sue for any reason

US “Affiliate” Tax Law

Map courtesy of Commission Junction

Legal considerations in Europe

TAX LAW

TRADEMARK

COOKIES

INTERNATIONAL LAW

To protect users from cookies being downloaded on their device and have their behaviour tracked without consent

Protecting your brand in the EU

Each market has deductible taxes that are fixed and based on services you provide!

Supranational and local law, and the future… the right to be forgotten

Mobile – the big picture• Over 50% of Americans have a mobile phone (Comscore 2012)

• Half of US smartphone users use m-commerce apps (Nielson, June 2012)

• Examples of mobile-optimized publishers:

– Retailmenot

– CouponCabin

– TapJoy

– Red Laser

• 15% of conversions tracked by Impact Radius are mobile

– 64% iOS & 35% are Android

– Mobile AOV was 39% higher than web

– Android AOV is 29% higher than iOS

Mobile – the big picture• ~33% of CJ advertisers that have a mobile enabled website

• Top 5 Categories for Mobile:

1. Department Stores

2. Clothing, Apparel, and Accessories

3. Computer and Electronics

4. Travel

5. Sports and Fitness

• 6x growth in traffic across top mobile categories

• 4x growth in sales across top mobile categories

• 10% average mobile sales in top categories

2012 2013 2014 2015 2016 2017

€ 2,739

€ 4,620

€ 7,419

€ 10,755

€ 14,656

€ 19,246

Growth of European mobile commerce: Travel and retail (€ millions)

Source: Forrester Research European Mobile Commerce Forecast, 2012 to 2017

+47%

a year

How to make the most of mobile in Europe

57% of top 100 UK brands have a mobile site, up from 37% six months ago

88% of the top 100 global brands have an app in the App store

MOBILE SITES

APPS

INTEGRATIONOmni-channel, geo-targeting and creating immediacy

Mobile: think differently, then test, test, test!

Attribution90% of affiliate shoppers visit more than one site before making a purchase.*

Source: *Forrester Research 2012

51%

20%

29%

AttributionLoyalty and Voucher dominate single and multi-channel purchase, with content and vertical sites the next biggest source of traffic.

Many European markets rely on a few strong converters.

Loyalty / reward programs

Voucher code

Vertical / content site

Secondary search

Price comparison, virtual currency, email

61.1%

21.9%

12.0%

3.4%

1.6%

48.7%

35.1%

11.3%

3.2%

1.7%

single channel purchase multi channel purchase

1 click

2 clicks

3+ clicks

LAST CLICK TO PURCHASE BY VERTICAL

SINGLE VS MULTI PURCHASE CHANNEL

Merchant considerations

• Where is the bill being paid from and where is the invoice registered?

• Will you need to deal with withholding tax?• Which entities are your contracts between?

• Are you legally allowed to trade?• What are the trade restrictions in the country?• Is there an affiliate base/network in the region?• Can you pay in foreign currency?

• Are there any language barriers that need to be considered with creative and landing pages?

• Will you need to adapt your tracking capabilities?• Can you pay on all products or should the expansion be a

separate program?

Summary: opportunities for US Advertisers

CPACPC

Quick win

Consideration

THANK YOU FOR LISTENING

Peter Figeuredo: Partner, Global Head of Client Services, House of Kaizen

James Maley: Head of Corporate Clients Europe, Tradedoubler

Jess Nathan: Global Affiliate Manager, Hilton Worldwide