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12.03.07
Using Behavioral Targeting with Affiliate Marketing
 By:
Anil Batra
Behavioral Targeting (BT) provides a great opportunity for Affiliate Marketers and Networks to reach the right customers and increase the conversion.
What is Affiliate Marketing?
Affiliate Marketing is way for advertisers to reach potential customers and only pay when a visitor takes some predefined action. Predefined actions range from a sale to registration. Recently Pay Per Click has also been added to affiliate programs. Generally, the website (publisher) places an advertisement on their site and when a predefined action results by a visitors referred (clicked) by that ad, the advertiser pays the publisher a % or a fixed amount. I won’t go into further details of affiliate marketing but you get the idea.
As you know now that one of the major benefits of Affiliate programs is that an advertiser gets an inventory on the publisher’s site without paying anything. The advertiser only pays when a visitor becomes a lead or a customer. This is like sales people on commission only program.
However there is an even bigger benefit than just getting free inventory. The ability to put an ad serving (and tracking) code on these affiliate sites (publishers). Just think about how many sites (Amazon, eBay, commission junction, linkshare etc.) have their codes on. Amazon was one of the early advertisers who realized the power of Affiliate programs. Google, no matter how you look at it is also a type of affiliate program, in most cases advertisers get free inventory and only pay when a click happens (and now Google has a pay-per-action program which is a true affiliate program).
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The widespread tracking code on the internet provides a huge opportunity for affiliate networks and advertisers (like eBay, Amazon) to engage in behavioral targeting and reach potential customers with the right message at the right time.
Let’s take a look at a scenario to further understand how this can work.
A user visits eBay and looks at certain products and bids on a camera but lost the bid. Next day eBay gets another seller who is selling the same camera. How can eBay reach the user who lost the bid? Well one way is they can send her an email (She might not be actively checking my email). Second is tell her about that camera when she comes back to eBay (that might be too late). Third is they can use their affiliate site to put that camera offer right in front of her if she happens to visit any of the affiliate sites (and there are a lot of them). She has shown interest in the camera so why not use your affiliate code to put the right offer in front of her. The code is right there to make use of it. Some might argue this is crossing the privacy line but that is a whole other issue to discuss.
Amazon already does similar targeting by its Omakase links but it is not true behavioral targeting. They use the keywords or browsing history which goes back since the day they were born. I see offers from Amazon that are not even relevant to me anymore, they were at one time but Amazon still thinks I am interested even though I have not clicked on those products in years.
Affiliate networks like Commission Junction and Link Share are in great position (eBay uses Commission Junction). They know what kind of sites a visitor (or customer) visits, what kind of products/offers he/she is interested in by looking at their click or purchase behavior. Can’t they just automatically put offers/products in front of customers?
The way most of the affiliate networks work today is not very efficient for any of the parties involved. They need to step it up a bit. Here are my thoughts on all parties involved how Behavioral Targeting (BT) can help them.
Publishers: A publisher has to decide what advertisers they want to sign up for, this is their guess on what will work. I have spent months trying to figure out what will work for my customers. Also then the link generation process is so difficult. Say publishers sign up as an affiliate for Resaturant.com (check out SeattleIndian.com, it has restaurant.com banner), now the publisher has to go find the products that are relevant to their customers if they want to target with right banners. In this case maybe it is restaurants in Seattle. It is such a pain that the majority of publishers don’t want to deal with it and just put up a generic banner. Wouldn’t it be nice if CJ or Restaurant.com in this case was able to put the right offer based on Geography and other browsing behaviors on either CJ network or Restaurant.com site itself?
Continue reading this article.
About the Author:
http://webanalysis.blogspot.com Anil has over 10 years of experience in Consulting, Business Intelligence, Web Analytics, Online Advertising and Behavioral Targeting. Anil helps companies use Web channel data to improve online business results (lead generation, conversion, retention and self-help metrics). Anil has helped several fortune 500 customers effectively use web analytics and increase their ROI on the web. Anil has worked with customers such as Microsoft, SmartMoney.com, ESPN, T-Mobile, Hoovers, Realnetworks, Starbucks, and TheStreet.com Anil holds a B. Tech in Electronics and Communication Engineering from India and an MBA from University of Washington, Seattle.
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