It’s a Small Affiliate World After All
By Matt Swan, Client Strategist at Affiliate Window
An interesting trend that began to emerge last year was the internationalization of the performance channel.
A number of successful brands from the United Kingdom, for example, have entered into the U.S. market and are currently thriving. Having seen an increase in demand from the U.S., they successfully set up operations within the foreign (to them at least) market. This is a trend that is definitely being experienced across the fashion retail sector. Brands that have crossed the Atlantic and successfully entered the U.S. include TM Lewin, Superdry, Monsoon and Jack Wills. All of these brands were seeing a high volume of traffic originating from the United States so it was evident there was a strong demand for their products and a clear opportunity to enter an extremely attractive market.
Having seen the success of some of these brands, it would not be surprising to see more non-U.S.-based advertisers within the sector launch in the states. The market is challenging, but it can certainly be rewarding. Similarly, the globalization of travel brands has been another emerging development. Looking at a number of advertisers across affiliate networks, there is a clear trend in overseas bookings. While the majority of sales originate from the U.S., sales span the globe. Consumers from a number of markets are booking with travel brands based in the United States.
Internationalization of the performance marketing channel is typically being driven in two ways – U.S. publishers are expanding their operations to focus on additional markets while the space is also seeing a rise in publishers from overseas. With U.S. publishers entering additional territories they may need to overcome language barriers and understand the cultural differences of their new audiences. Setting up local language sites is a considerable amount of work but enables publishers to tailor their offerings to the markets they are operating in.
By understanding where publisher applications are originating from it is possible to gain an insight into the nature of the traffic- whether it is increased traffic from overseas to U.S.-based publishers, or new publishers signing up from overseas to promote U.S. programs.
Monsoon and TM Lewin are two popular British retailers who have expanded their performance marketing initiatives to the United States.
It is also important to understand the implications for advertisers and how they can benefit from internationalization. Typically advertisers that are able to offer free delivery to international customers are far more likely to generate significant volumes of sales from overseas markets. Expensive delivery costs are one of the main barriers to international expansion, but not all retailers can afford to “eat” delivery costs. One way to offer free or low-cost shipping is by increasing the average order value by setting a minimum purchase. For example, all orders over $175 receive flat-rate shipping of $9.99 or free shipping, if the merchant is able to offer that benefit.
How much data is at an advertiser’s disposal is also going to play an increasingly important role in the internationalization of the channel. This will help to facilitate an in-depth understanding of publishers that are effective at driving traffic and conversions from certain markets. Additionally, it will provide insights into the consumer behavior across the globe from the types of products that are being purchased from overseas, the promotions that are effectively driving conversions, average order values from each of the markets as well as the devices that are being used to transact.
Internationalization of the performance channel experienced considerable growth last year, but it’s increase and effectiveness will ultimately come down to the availability and ease of global insights for advertisers and global e-commerce options for consumers.