Coupon Affiliates: To Pay or Not to Pay
When an advertiser makes the decision to either work or not work with a coupon affiliate, special considerations need to take place. For our purposes today we define “advertiser” as either a retailer or merchant.
On a recent call for the Retailer and Merchant Council, PMA members discussed the validity of sales driven by coupon affiliates. The call included advertisers with different models: some who do accept coupons onsite, others who do not; advertisers who work with coupon affiliates, others who do not. And, while there were differences of opinions on the value that coupon affiliates do bring, there were two things all agreed upon: (1) having a direct relationship with the affiliate is vital and (2) paying the affiliate based on the lifetime value of the customer.
As to the first point: when an advertiser decides to accept coupon codes, there was overwhelming agreement that working with coupon affiliates as direct affiliates is vital to a program’s overall health and value. When an advertiser and/or their OPM works directly with the coupon affiliate, there is more control over and transparency in the relationship. Working with coupon affiliates via sub-networks brings violations of brand, violations of terms, and enforcement that, frankly, takes up valuable time.
“Having a direct relationship with the coupon sites gives us much more flexibility to properly attribute value to the coupon sites, transparency and visibility into how the coupon sites are promoting, and more options as far as placements, exclusive offers, and creative promotions,” Joe Sousa, Fanatics.com.
Is that to say that sub-networks don’t bring value? Certainly not. There are several sub-networks who are members of the PMA who are valuable members of the performance marketing space. Those on the call, however, believed that coupon affiliates are best managed when they are managed directly.
Regarding the second point (paying the affiliate based on the customer’s lifetime value), there was some debate as to whether coupon affiliates bring value at all. All agreed, however, that analysis needs to be given to the customer’s clickstream and where the coupon affiliate falls. Paying the affiliate should be in reflection of the advertiser’s perceived value of where the click falls in relation to other paths to purchase.
“Coupon sites can drive a lot of value for merchants, but you have to be meticulous about measuring multitouch attribution and rewarding coupon sites based on the value they drive toward helping you close the sale!” David Vogelpohl, WPEngine.com.
Questions advertisers need to consider when determining a coupon affiliate’s value: did the customer click on other channels? Where in the clickstream did the customer click on the coupon affiliate’s link? Do I value top of funnel? Do I value bottom of funnel? Did the customer go find a coupon while in the cart? If so, did it result in the customer taking additional actions and, therefore, bring added value to the cart? And, while it’s impossible to determine with absolute certainty, is this a customer I would have acquired anyway?
In all, however, the two points we discuss here in this post are moot without establishing best practices when an advertiser decides to accept coupons onsite. This is a goal of the Retailers and Merchant Council: to establish best practices in regard to performance marketing in many areas, one of them being coupon acceptance.
“Any half-way decent analytics package can determine if the shopping cart was abandoned by the customer so they could go find a coupon. Coupon codes can and do go viral. It’s essential, therefore, that best practices are in place to avoid training the customer to do just that. Using coupon codes to measure the success of any campaign is a disaster waiting to happen,” Maryellen Garasky, Jane.com.
Is it wise for advertisers to post coupon codes far and wide? Available to just anyone to find all over the net? Certainly not. But then, how does an advertiser keep coupon codes from going viral?
I understand this blog post presents a lot of questions without answers. I, also, understand that this might be a source of frustration for many of you. Frankly, I’m not bothered by it. If you wish to benefit from the discussions, I invite you to become a part of them. Much more than these questions were considered on our call and best practices were discussed in detail and at length.
The Retailers and Merchant Council meets on the first Thursday of every month. Email Rachel G. at the PMA to find out how you can join in, benefit from some of the greatest minds our industry has, and be part of the discussion.