11/02 2007
Firstly from Matt Bailey and me (Bruce Clayton) – a big thank you to all who came to the B2B seminar at the recent A4U as well as those who (though not in attendance) supported its general aims.
With all due deference to Matt, who’s delivery was a great deal more polished than mine, I was once again left with the sense that we’d made a tidy summary, but there are still more questions than answers. So the quest for a thriving B2B affiliate marketplace in the UK continues!
The consensus in the room after the Q&A I would summarise thus –
- There are not enough merchants and sectors covered
- There are not enough affiliates devoting serious energy at B2B
This stalemate results from the perceived inability of the infrastructure of affiliate marketing to deliver for anyone other than mainstream consumer facing merchants. This can be summed up as –
· Affiliate distrust of non-transparent and long sales processes that may logically have to culminate offline
· Merchant reluctance to attach a value to speculative actions that are not based on final sale
· Network charges and sales pitches create unrealistic expectations and payback imperatives that lead to short-term thinking and frustration
So, having established the reasons for the slow progress we can now look at the consensus view of the way forward that came from the Q&A and a few conversations immediately after.
- Networks must lower the cost of entry, by essentially providing a basic package – creative and editorial guidelines / tracking and low fees. Large fees may win the “perceived value” contest when it comes to big consumer brands, however the trade marketer is a more conservative beast and will only experiment with the untested at a price that reflects that!
- Networks need to re-purpose infrastructure such as shop window, content units and other packaged delivery of merchant content to allow rapid syndication by affiliates with little time penalty or monetary cost
- Merchants need to recognise that affiliate marketing can deliver leads at a price that reflect their worth in terms of quality, and that this calculation must be made by analysing the funnel of leads to sales. Not enough consideration has been paid to this in the past and I consider this to have been a major factor in merchant frustration thus far.
- Affiliates, likewise, should respect that leads based programmes are a risk on behalf of the merchant and that reasonable validation criteria must be applied by the merchant and network to ensure quality.
- Merchants need to establish an agreed commercial policy in terms of payment and validation criteria, changes should be made sparingly and with consultation with affiliates. It has to be remembered that most B2B propositions will be new and therefore without precedent – so as I would advise any client, don’t go in at the top and you will have room for manoeuvre without damaging affiliate relationships.
- Affiliates need to re-purpose their infrastructure and business models. With the exception of PPC (of which I am no expert) there is no reason why the directory, content, niche or incentive models cannot be applied provided there are sufficient merchants and affiliates to create critical mass.
- The value of educating affiliates in the proposition and providing copy for affiliate sites is now gaining currency in the mainstream and is doubly important for more complex B2B propositions.
None of the above is radical thinking. It is just the best practice of affiliate / merchant / network relationship management that has been prevalent in mainstream affiliate marketing for some time now.
With regards to PPC, in a way this is a perfect illustration of business engaging with online audiences on the basis of what is essentially a lead (if there is no direct sale driven from the click) – therefore the pay per lead model should in theory not represent quite the ideological stumbling block it is made out to be.
The final piece in the jigsaw is how to recruit B2B merchants to the marketplace. Clearly, my assertion that networks should provide a low-cost service to encourage rapid growth means that they won’t stage a proactive sales push. Happily, however, an erudite and vocal part of the audience, were web-design and other agencies that have B2B clients. It would be disingenuous of me to pretend that I’m not also in the business of seeking means to provide added value to the corporate proposition – therefore B2B web and marketing agencies would be well placed to be re-sellers of a packaged affiliate proposition as they have the client base.
Before anyone starts screaming at me about all the B2B directories and lead exchanges that are about, and launching in an attempt to connect the B2B marketplace online – YES, there are a few, and many I can name – however they don’t have is a low cost of entry or a revenue model that is performance based – in some cases both.
If we cast our minds back a few years then one very important fact stands out. The likes of Kelkoo and Dealtime are what may be considered the grown up face of performance marketing, however the role that affiliate networks played in facilitating their growth by bringing greater numbers of merchants to the marketplace allowing them to stock their shelves and understand more about the metrics of sectors and conversions. Few legacy deals remain on them that are purely CPA, however nobody could deny that the affiliate model was a key catalyst of their ability to grow, and I see no reason why greater numbers of B2B affiliate programmes can’t compliment and integrate with all current initiatives to bring the B2B marketplace online.
All this is just my view of what I perceived the messages and feedback from the seminar to be, and some attempt to shape them into a logical conclusion. I am nothing if not vocal, a million miles from being correct most of the time and I welcome contributions and feedback from those that were there and those that weren’t. I am happy to play devils advocate in order to progress the argument, as are many others who are active in the field of affiliate marketing.
Thanks for making it through to the end of my ramblings - please add to the discussion!
