How should advertisers be marketing through social distancing?
The world has changed beyond recognition over recent months, and marketing is changing with it. Reactions to coronavirus have varied across sectors and individual advertisers, with large shifts in consumer demand.
For some retailers, the onset of the COVID-19 pandemic had come at the end of several difficult months, with UK's Brexit continuing to cause uncertainty and the global economy already wobbling on the edge of a recession. With the lockdown now already leading to a number of businesses going bankrupt, news outlets report we should expect more in the coming weeks.
When it comes to affiliate marketing, advertisers are taking different approaches based on where they find themselves in this new landscape of demand. With so much uncertainty in the market, some have reduced channel activity in line with scale backs of all marketing spend, but this is not the whole picture.
Customers are now relying on online retailers more than ever to deliver their needs. While no brand wants to make undue profits from the crisis, there is a sense of duty to both staff and customers to continue trading.
Overall, advertisers are falling into three core buckets:
1. Too little demand
Advertisers facing declining customer demands have tough decisions to make. Board-level directives to reduce all costs are understandable; however, research has long told us (since the Great Depression of the 1920s in fact) that those increasing marketing spend during downturns will reap the benefits long term.
It’s important that retailers separate the impact of coronavirus from other drivers, and still adhere to best practice guidelines. Both publishers and consumers will remember how they were treated during this crisis, and this will inform their brand loyalty in the future.
Some advertisers with lower demand paused activity to review their position in the new landscape, as well analyzing stock, warehousing and delivery capacity. However, we are now starting to see programs relaunch as the affiliate channel’s capability to deliver sales at a strong return on investment rate means it’s a low-risk channel for advertisers placing more scrutiny on their marketing spend.
2. Too much demand
The grocery sector provides a familiar example, where too much demand caused retailers to stop all marketing activity, and in some cases temporarily close down websites to add virtual queues and increase server capacity. However, it’s the niche product ranges sold by smaller retailers that tell us what consumers are focused on during lockdown. Sports equipment, leisurewear, toys and games, gardening equipment and food takeout are all in huge demand, and for the majority of cases it’s the smaller retailers who are seeing the strongest demand. If we look at UK advertisers by size across the Awin network, it’s our smaller online businesses and start ups that are seeing the largest increase in demand.
More agile businesses are reacting quickly and succeeding in bringing their in-store customers online. With Amazon cutting search spend by 90% during March, there is a unique opportunity for smaller brands to get in front of more customers.
So, when is an increase in demand too much? Some retailers have had to stop taking new orders as they can’t fulfil them, either due to stock availability or delivery capacity. However, these measures can be short lived, and if new supply chain processes can be established these retailers have the opportunity to flourish.
3. Push/pull demand
There are many retailers who, while still impacted by the pandemic, are seeing overall online demand stay fairly consistent. These include retailers like department stores which offer both in-store and online propositions; loyal in-store customers are moving online, but there are declines in demand for categories like womenswear. This push/pull effect means traffic levels are staying relatively consistent.
So how should advertisers within these buckets be marketing through social distancing?
There are several key considerations when developing affiliate strategy over the coming weeks:
Make data-driven decisions
Now more than ever, the importance of using data to guide decisions is paramount. Understanding which channels drive strong return on investment, and specifically which publishers, will help ensure activity continues to make the biggest impact possible. This means all relevant information needs to be passed back within your tracking tag, like payment types and coupon code usage. This will allow you to clearly see which publishers are driving your most desirable customers.
Make sure assist and attribution data is considered, and there is a clear understanding of which affiliates are delivering value when sales are re-attributed. Splitting commissions across individual sales isn’t recommended but understanding the data and setting commissions based on re-attributed value ensures those higher up the funnel don’t have their contribution overlooked. It’s vital any decisions made during the crisis that affect an advertiser’s commission strategy or publisher base are both informed by data and implemented in line with best practices. In particular, appropriate notice must be given to any affected partners.
Get the message right
No brand wants to alienate either customers or partners by setting the wrong tone and coming across as putting profits above people. Advertisers have a sense of duty to both their staff and customers to continue trading, and it’s this position that needs to be clearly communicated to both affiliates and consumers.
Understanding who your customers are is therefore incredibly important. That may have been relatively true at the start of the year, but shifts in demand caused by the pandemic means you could be marketing to a different demographic than previously.
Advertisers will be acquiring new online customers, many of which could be making their first online purchase. This could be particularly true for the older generation. Research from October 2019 showed that 71% of customers preferred to make a first-time purchase in store. The closure of physical stores therefore provides a significant opportunity to acquire new customers, and messaging needs to adapt to this using simple language and making the benefits clear. Publishers need to focus on how advertisers are helping customers with content that includes awareness of the crisis but isn’t wholly focused on it.
Affiliate marketers also need to analyze which publishers these customers trust to help inform their first online purchases. As well as ensuring these ‘first timers’ have a good experience now, we also need to put in place measure to retain them once social distancing has been lifted.
These include considerations across email activity and ensuring repeat purchases are rewarded. When considering discounts and offers, the tone of the messaging becomes particularly important. While there are numerous sales being promoted, brands are moving away from ‘free’ delivery messaging to focus on ‘safe’ delivery messaging, as well as extending returns periods.
Know your publishers
It’s important for affiliate marketers to be aware of the recent shifts across the publisher landscape, and how new partnerships with publishers seeing increased traffic can support continued performance.
There are several publishers from across the discount and loyalty space promoting offers for hospital and medical staff and other essential workers. They afford advertisers with a great platform to offer support by providing strong deals.
The loyalty sector is overall seeing some declines; however, selected loyalty publishers are offering customers bonuses to ensure customers the best deals.
Discount code sites have also made some small shifts in focus, with the larger traffic sites giving more inventory to ‘freebie’ content, such as free trials. These are now being offered by a larger number of retailers and complement the increased volumes of subscription service purchases we have seen in recent weeks.
As fast home internet and adequate work from home set ups become more important, price comparison sites who often specialize in telecoms and electronic categories are seeing increases in traffic.
Influencers are also becoming more important to the publisher mix as customers search for inspiration. They also provide the opportunity to ensure advertiser messaging hits the right tone. Research has shown that influencer-produced branded content is considered to have more organic, authentic, and direct contact with potential consumers than brand-generated ads.
Support other businesses
Changes in consumer demand across retail sub-sectors present the opportunity for advertisers to develop affinity partnerships with other brands. With some brands seeing too much and others seeing too little demand, directing traffic to a non-competing but complementary retailer supports both customers and other businesses.
Affinity partnerships can be set up and activity measured using publisher tracking functionality, with each brand acting as a referrer for the other. By providing customers with information about other companies that are relevant and can support their needs, the perception of an advertiser’s own brand can improve.
Make the most of your network
Sector-level trends need to be considered when determining where to invest. How in or out of sync are you with the wider landscape?
Ask your network to regularly provide data showcasing how much the sector is growing vs your own activity. This will help identify both the success of current activity, and where you need to focus your efforts. With daily events causing wholescale shifts in behavior, the situation can quickly change. A regular view of the bigger picture allows fast reactions and the best chance of meeting up to the expectations of your customers.
What does the future have in store?
The COVID-19 pandemic is throwing new challenges at digital marketers that are set to last for many weeks to come. However, more and more brands are using this as an opportunity to do good - supporting key workers making it easier for customers to donate to charities or changing their product mix to react to the current climate.
Distilleries and breweries are pivoting to produce hand sanitizer; Chanel has pledged to use their factories to assist in the creation of personal protective equipment. Within the affiliate industry, we are celebrating advertisers doing the right thing through the Awin + ShareASale Champions list.
However difficult the short-term situation we find ourselves in, such actions and initiatives showcase the strong spirit driving towards the common good. The silver lining for all within digital marketing is that the short-term forced shift towards online shopping can only be beneficial for the long-term future of the industry.
For more information on COVID-19, please visit our information hub where we bring you the latest news from Awin, as well as links to network insights and useful pointers, alongside wider updates.