Within sales, there needs to be a “compelling event” for someone to purchase – a consumer’s pain that must be solved by a certain date. This means that if it is not solved, it will have a negative impact on the consumer’s role or business. This then creates a matter of urgency for the customer to act.
When I compare this logic to the current tactics networks are using to persuade brands to integrate tracking, I feel the industry is focusing on the wrong path.
Networks are currently concentrating on accuracy in data, fairness in commissioning and optimisation of current campaigns. This is an immediate win for app tracking, but I do not believe this looks thoroughly at the brand’s “pain point”, nor does it give them a reason to act by a certain date.
I spoke to Daisy-Blue Tinne, Agency Development Director at Impact and Clementyne Lavender, Strategic Partnership Manager – App Tracking Specialist at Awin about the challenges and opportunities offered by app tracking to the affiliate channel.
App tracking within the affiliate channel
I agree with much of what was said in a webinar with Awin, CJ, Rakuten, Tradedoubler and PerformanceIn. There is a huge opportunity within the affiliate channel: in-app purchases drive a higher AOV, LTV increases, and some brands are seeing between 40-60% of purchases now in-app. The app market is continuing to grow, especially in the APAC region, where the consumer is more mobile-focused and app purchases can equate to 90% of overall purchases.
To put it simply, if the affiliate channel does not diversify in the medium-term, the CPA model will not be a win-win due to a high volume of untracked sales.
However, the decision to integrate app tracking sits with the brand. There are a number of challenges to integrating app tracking (server to server) and these are echoed across team structures, tech resource/knowledge and budgets.
Daisy-Blue Tinne, Agency Development Director at Impact said: “In-app tracking, and subsequently in-app growth, represents a massive opportunity for all digital marketing. This journey, however, is fraught with technical challenges which require sophisticated solutions.
“Impact developed in-app tracking for the partnership category several years ago and has been honing it continuously since. Different scenarios can present challenges for both tracking and for optimal user experience, which is why technical excellence is so important. For example, most publishers are keen to have one link from their app or site – but don’t know where that link should direct. Does the user have the app installed already or do they need a prompt to download the app instead? We’ve had to develop a specific tool, TruelinkTM, which solves for these dynamic destinations across app traffic.
“We’re firm believers in install+ campaigns. Paying a CPA on install and first purchase, or install and open, creates a value point for brands where they can be more confident the customer is new and going on to make purchases.“
Despite this, there will be no ‘one size fits all’ solution, and I cannot see networks enforcing app tracking for brands in the short term. If networks cannot enforce it, how then do we look to incentivise brands to integrate app tracking?
Currently, the network conversation is centralised around data – making better decisions is possible with more data.
Clementyne Lavender, Strategic Partnerships Manager – App Tracking Specialist at Awin, said: “I believe access to more accurate data to be one of the most compelling and vital reasons for advertisers to integrate in-app tracking, but increased data certainly isn’t the sole opportunity it brings.
“Whilst app tracking enables visibility on in-app sales, it also allows an advertiser to incorporate install and reattribution campaigns into their strategy.
Numerous studies point towards app customers being more valuable than non-app consumers. It makes sense for an advertiser to have targeted campaigns to attract and harbour this type of customer; driving installs and app reattribution to safeguard continued growth for the programme.”
Increasing LTV and AOV is possible by pushing users to the app. However, the big concern for a brand is that they then turn on a tap of sales, which they would have already received but not paid for out of their budget. Brands that have a quality app, driving around 40% of consumers, are enterprise brands. These brands spend millions within the channel per year.
Imagine adding an additional 40% commission payment to your budget, plus a network override, just to activate app tracking. The CFO will ask what’s in it for them, and to be blunt – without the network’s knowledge development in this area, the brand may not be able to sell it in on behalf of the network.
In-app tracking uptake
Daisy-Blue Tinne, Agency Development Director at Impact, said: “Overall, the affiliate channel has undoubtedly suffered due to the slow update of in-app tracking across the industry. As the proportion of e-commerce sales that are in-app continues to grow, the volume of funding for the industry proportionally shrinks. You might propose that it’s an advertiser’s prerogative to pay what they want, and certainly to avoid paying for sales that would have happened anyway. You would be right – but this is a short term view.
Daisy-Blue continued: “Long term, not rewarding affiliates for sales driven in-app means a reduction in funding for the industry and therefore progress. This reduces innovation and even causes some partners to exit the market. We’ve sadly seen a number of promising businesses go into administration or exit the affiliate industry in recent months.
“That said, there is even a short-term win for advertisers to fund in-app tracking. When media partners aren’t paid for sales in-app, they unsurprisingly start pushing their users to mobile web instead (where they will receive a commission). But we know that mobile web converts at a lower rate compared to app transactions and with a lower AOV. So through not tracking, and commissioning, in-app advertisers are reducing sales volumes in the here and now.”
Addressing pain points
My view on this is that the affiliate channel needs to look at what a compelling event could be for brands. What are their pain points and how can we as affiliate managers help them with a pain point?
For me, the compelling pain point within digital marketing is centred on app installs. App install marketing is highly driven by display media: it is an industry worth $80bn, and tracking and measurement is being questioned. In addition, brands are being challenged to pull marketing spend from Facebook.
Because of this, in the short to medium term I believe brands will be faced with a challenge. How can they effectively increase app downloads and where can they spend their rather large marketing budgets?
I feel there are two affiliate marketing campaigns that should be active:
1. App Install Marketing
2. App Activation Campaigns (to subscribe, make a purchase and or repeat a purchase.)
At the moment, affiliates are already promoting brands efficiently. There is an ecosystem of “pure players” and “web+app” publishers who can look to promote app install campaigns. Although marketing campaigns tend to separate app install and activation, the affiliate channel in theory can appeal to both. We can track an install, and record and reward for sales 30 days later too.
The win-win scenario
The win-win here for brands is to appeal to the marketing manager whose current pain point is app installation and app activation. By looking at them both, we can create a compelling reason to utilise the affiliate channel to drive app and in-app conversions.
The launch of Awin’s Reach partnership with Button will support the opening of a wider conversation on app installs alongside conversions. Up to now, in my eyes, this conversation has not been given the attention it deserves.
To conclude, as the affiliate industry looks to catch up with the phenomenal growth of app marketing I do feel it is important to take a step back, review how the affiliate channel can support brands’ pain points and support them. A brand will not look to integrate and increase budgets just because they “should” do it: we need a compelling “win-win” scenario for all parties. That is the nature of affiliate marketing.