As many of you know from following Hannah’s posts, this year CJ attended and presented at the A4U Expo in Amsterdam. As well as being one of the attendees and ’stand hands’ I was also lucky enough to present a session with David Harding from Argos on a very topical subject – “Managing Success in a Downturn”. You can find a copy of the presentation here but I thought it would be helpful for those that didn’t attend if I provided a quick recap of it.

When asked to provide a topic this one seemed fairly self-evident. We were sure that not only would it be relevant but that we would have tons of information from which we could draw. It was also clear that based upon past and current performance Argos would be the ideal partner to talk through this. I’ve also done presentations with David Harding in the past so I was confident of it running smoothly.

The presentation followed a set framework. We would discuss current economic conditions and then we would correlate the Argos/CJ efforts back to suggestions on how to beat that particular trend through affiliate marketing. 

Market Conditions and discounting :First we discussed the market conditions in the UK and how they were impacting businesses. Without too much detail (as I am sure most of us understand the key trends), one key point of note is how discounting has impacted business and how Argos sought to turn that into their advantage. Primarily, many business have been discounting broadly where Argos have been discounting tactically to move inventory or take advantage of particular affiliate business models and their ability to target particular demographics.

Excellent Communication: This of course led us to the first of two key drivers of the programme: excellent communication. Argos has made it a point in the past eighteen months to engage at a greater level with the affiliate community and become ‘less anonymous’. Their broad-based communication strategy encompassed: one-to-many, one-to-one, and face-to-face channels.

• One-to-many: This was mainly newsletters and community advertising/marketing and was typically directed at increasing the reach of the programme and casting a broad net to pull in affiliates.
• One-to-one: For larger affiliates in targeted demographics/channel segments, the communication became much more focused and direct, specifically tailored to their needs and with an absolute focus on relevancy
• Face-to-face: Argos sought to engage with affiliates on a more intimate and direct level which CJ was happy to facilitate.

All of these communication initiatives drove greater affiliate loyalty and enabled Argos to target their needs in the appropriate direction. Optimisation was so successful that Argos currently has an active publisher base of over 42% and 37% of publishers actually drive sales. All of this on a programme with over 7,000 publishers.

Internal Management – The final pillar of success for Argos is the effective internal management of their programme. As we all know it is critical not to turn programmes on and off. ‘Blown budgets’ kill programmes. It negates hard affiliate work and drives down volumes even when the programme comes back up. By selling the affiliate marketing programme internally and treating it as an effective point of sale, Argos has been able to drive volumes forward without having to put on the breaks. The keys to winning the ‘internal sales pitch’ for the Argos affiliate team were:

• Working with a network which provides ample metrics to support any incrementality scrutiny
• Effectively using the affiliate channel to move inventory on a tactical basis.

Overall: Whilst affiliate marketing can’t offer a magic tonic for what ails many businesses out in the marketplace it, is clear from looking out there in the community that many affiliate programmes can underperform in an underperforming market. Times of distress are the exact times that you need to increase your reach and consider new business models – not close down avenues for growth. Affiliates are customers and need to be sold to, not just for their own selves but also so that they can share their learnings with their users. Finally, merchants must learn how to sell the affiliate programme internally – the budget should be forth coming, the margins correct and the ROI communicated outwards and upwards to key stakeholders. That way growth does not become an issue.

In summary, it really comes down to communication, incrementality, margins, budgets and reach. Getting all these facets in harmony will ensure that an affiliate programme can sell to the three target audiences that count – the affiliates, the customers and the internal organisation.