B2B Coupon Affiliates - Cohort Analysis Results | Affiliate Summit West 2013

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B2B Coupon

Affiliates

Affiliate Summit West 2013

January 14, 2013

#19468806, iStockphoto

Worldwide leader in digital content

B2B Coupon Affiliates - Affliate Summit West 2013

Getty Images

Leading provider of digital

media content worldwide

#83987151, Maarten Wouters/Stone+

Why are we here?

Understand incremental value

True incremental growth?

81% 73%

Maybe you’ve heard one of these before…

• Customers spend less with a coupon

• Coupon customers are less profitable

• Coupons cheapen the brand perception

• Customers would buy anyways without a

coupon

• “Last click” coupon affiliates steal sales

The Direct and Indirect Value that Affiliates Deliver to

Advertisers

Research reported conducted by Forrester Consulting

on behalf of Rakuten LinkShare

Key Findings

• Generates incremental new customer acquisition

• Online buyers are deal-driven and more likely to buy a product

they find merchandised or advertised on multiple websites

• Attracts consumers who spend more than the average online

shopper and are profitable for advertisers.

• Affiliate marketing helps trigger brand reconsideration, often

closes the sale

• Promotions offered in the affiliate channel have a positive

impact on an advertiser’s brand reputation and loyalty

Source: Forrester Consulting on behalf of Rakuten LinkShare

8#6442730, iStockphoto

MYTHCustomers spend less with

a coupon

Customers spend more with a coupon

3.1x spend

2.6x spend

Deeper discount ≠ Higher spending

MYTHCoupon customers are

less profitable

Coupons deliver immediate returns

3.1x ROI

Year Time ValueCohort Analysis

# 7465953, iStockphoto

What is a Cohort?

• A population of customers

sharing common attributes

– 1st purchase with a coupon

– 1st purchase without a coupon

• Follow activity across a

period of time to understand

customer behavior

– Q1 2011 to Q3 2012

– Normalize over 12 months to

measure year-time value

#200516675-001, James Lauritz / Digital Vision

Average Revenue per User (ARPU)

Average Revenue

per User

Total Revenue

over X period

Total Cohort

Population

Customer profitability grows over time

1.5x lift

1.8x profitable

2.0x lift

Retention– long tail of loyal customers

long tail

Order Value – customers increase spend

1.12x lift

Frequency – customers spend more often

1.05x lift

Customer profitability grows over time

2.0x lift

1.5x lift

1.8x profitable

MYTHCoupons cheapen the

brand perception

Customer Value Tiers

• Agency

• In-house Creative Enterprise

• Media/Publishing

Silver

• Business User

• Freelance Graphic Designer

• In-house Creative SMB

• In-house non-Creative

Bronze

• Blogger

• Contributor

• Personal Use

• Sole Proprietor

• Student

Largest contribution from smallest population

Gold customers are most valuable

1.5x lift

1.4x lift

1.3x lift

MYTHCustomers would buy

anyways, without a

coupon

Coupon usage on the rise

17% 20%0%

Google “istock promo code”

Why leave it to chance?

MYTH“Last Click” Coupon Affiliates steal sales

Short sales cycle to make a purchase

Average = 2.04 days

Conversion rates by affiliate type

Average

Minimal clicks and overlap amongst affiliates

Less than

overlap

Key Takeaways

Myth Truth

Customers spend less with a coupon Customers spend 2-3x more with a coupon

Deeper discount ≠ higher spending

Coupon customers are less profitable Coupon customers are more profitable

both in the short and long term

Coupons cheapen the brand perception Most valuable and loyal customers use

coupons

Customers would buy anyways without a

coupon

Coupons part of everyday shopping

Coupons retain loyal customers

“Last click” coupon affiliates steal sales While each affiliate type has a role to play,

minimal overlap between affiliates

Questions?

blair.dejong@gettyimages.com

www.gettyimagesaffiliates.com