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Glossy Forum: Age of E-Commerce | Awin

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Glossy Forum: Age of E-Commerce | Awin

  1. 1. Futureproofing your business in a changing digital landscape Jeannine Crooks Partner Acquisition + Development Manager, Awin
  2. 2. The current e-commerce climate is facing three main challenges Increased spotlight on how consumer data is being used, placing limitations on businesses Data Privacy Diminished brand loyalty among consumers thanks to the choice offered by the internet Consumer Loyalty Growing tracking and cookie blockers, putting retailer revenue at risk Tracking
  3. 3. Tracking Data Privacy Consumer Loyalty Challenge 1: Decreased Consumer Loyalty $32bn Lost profits 8% Consider themselves brand loyal 46% More likely to try a new brand than they were 5 years ago 14% YoY growth in retail e-commerce revenue
  4. 4. Tracking Data Privacy Consumer Loyalty 85% of consumers will not do business with a company if they have concerns about its security practices 92% Say they should be able to control the information available about them on the internet 91% Say companies should notify consumers about all data breaches 88% Say the amount of data they share with a company depends on how much they trust it 87% Want the ability to remove their personal data from the internet if it hurts their reputation 85% Say cybersecurity and privacy risks are among the biggest risks facing society 71% Find companies’ privacy rules difficult to understand The path to trust: Giving customers control and providing transparency Source: PwC US Protect.me Survey, 2017 Challenge 2: Increased Privacy Concerns
  5. 5. Tracking Data Privacy Consumer Loyalty Challenge 3: Tracking Limitations 32% in Germany 28% in France 25% in USA 22% in UK Source: eMarketer 2018
  6. 6. Tracking Data Privacy Consumer Loyalty Browser Share Challenge 3: Tracking Limitations Firefox Anti-Tracking Policy January 2019 Safari ITP2.1/2.2 restrict 1st Party 🍪 April 2019 Chrome releases Chrome 75 June 2019 Safari ITP2 blocks 3rd Party 🍪 September 2018 48.25% 32.72% 4.37% 4.8% 4.51% Firefox releases Enhanced Tracking Prevention June 2019 2.8% Source: US browser share states for 2018
  7. 7. Tracking Data Privacy Consumer Loyalty New York SHIELD Security Act “Stop Hacks and Improve Electronic Data” - Senate Bill S5575B March 21, 2020 Nevada’s Consumer Privacy Bill (Senate Bill 220) October 1, 2019 GDPR May 25, 2018 California Consumer Privacy Act Jan 1, 2020 ePrivacy Regulation March 2019 draft Challenge 3: Tracking Limitations
  8. 8. Affiliate marketing offers the solution to these challenges by inherently putting consumers first
  9. 9. Futureproofing your business with affiliate marketing Affiliate marketing is data light in nature, with only basic, non- personal information used to track activity Data Privacy Affiliate marketing partners have established consumer loyalty readily available for brands to leverage Consumer Loyalty Affiliate marketing offers robust tracking solutions that protect revenue in an atmosphere rife with obstacles Tracking
  10. 10. Consumer Influencer Blogger Community forum Comparison Media House Cashback Coupon Partner Brands Solution 1: Affiliate partnerships have established consumer loyalty readily available for brands to leverage
  11. 11. Using influential affiliate partnerships to drive new revenue for Sephora 6.8m Combined reach of 20 influencers’ audience 60k Clicks generated by influencers during campaign 11:1 Return on investment
  12. 12. Futureproofing your business with affiliate marketing Affiliate marketing is data light in nature, with only basic, non- personal information used to track activity Data Privacy Affiliate marketing partners have established consumer loyalty readily available for brands to leverage Consumer Loyalty Affiliate marketing offers robust tracking solutions that protect revenue in an atmosphere rife with obstacles Tracking
  13. 13. Solution 2: Affiliate marketing is data-light, using only basic, non-personal information to track activity Order Total Order ID User IP Purchase Date Consumer Publisher Retailer Order Confirmation
  14. 14. Futureproofing your business with affiliate marketing Affiliate marketing is data light in nature, with only basic, non- personal information used to track activity Data Privacy Affiliate marketing partners have established consumer loyalty readily available for brands to leverage Consumer Loyalty Affiliate marketing offers robust tracking solutions that protect revenue in an atmosphere rife with obstacles Tracking
  15. 15. Solution 3: Affiliate marketing offers robust tracking solutions that protect revenue in an atmosphere rife with obstacles Server-to-ServerAdvertiser Mastertag Tracking Optimization
  16. 16. Want to learn more about futureproofing your business with affiliate marketing? Read The Awin Report awin.com/us/the-awin-report Contact our new business team us-newbusiness@awin.com

Hinweis der Redaktion

  • Deloitte conducted a study with consumers in the US and found that between 2007 and 2015, the number of shoppers who could identify a favorite retailer had dropped by 60%. Based on that figure Deloitte suggested that this amounted to a loss of around $32bn in profits for US brands.

    Nielsen corroborated these findings and found that that just US 8% of consumers considered themselves to be firmly loyal to a brand, meaning 92% have no qualms whatsoever in shopping around. Furthermore, they found that 46% of consumers are more likely to try new brands than they were just 5 years ago.

    This dynamic, between consumers and brands has radically altered, and this is largely down to the effects of the internet. The web has empowered individuals, giving them more choice and control over every facet of their lives. Whether you need a new bank, a new job or even a new date, all of these things are attainable with the click of a few buttons. Shopping is no different. Ecommerce provides more choice and more control over where and how consumers spend their money. In doing so it has eroded the loyalty that any consumers might have had towards any one brand. With North American retail ecommerce revenue expected to grow by 14% on average YoY through 2023, the market is filled with as much opportunity as it is choice – the question just becomes how do you capture that consumer loyalty to capitalize on this?

  • After this and several other global data breaches, people feel increasingly vulnerable.

    In 2017, PwC conducted extensive research surveying 2000 Americans over the age of 18 to better understand consumer attitudes about data security, cybersecurity, privacy, trust, and regulation.

    This research showcases just how concerned consumers are when it comes to privacy online –

    92% of respondents saying they want to control what data is collected about them and
    85% saying that they will not do business with a company they do not trust.
    Also there is a strong correlations between the trust a consumer has and the amount of data they are willing to share
  • The change in consumer attitude is affecting their behaviour with adblocking usages surging over the past years.

    According to the latest eMarketer adblocking stats, 33% of consumers in Germany use adblockers to gain control over their online privacy and prevent intrusive ads. In the US, we are now looking at 25% of consumers utilizing adblockers. This puts a quarter of a merchant's sales at risk for not being measured, or causes decreases in sales with more links blocked affecting total traffic making it through to the advertiser.
  • But that’s not all, the industry reacts as well as we see browsers changing their default setting to include integrated tracking prevention by default or by offering greater privacy options to the consumer.

    Privacy options are treated as a USP to drive market share, which started out with Safari late last year in announcing the blocking of 3rd party cookies. The most significant change so far is Safari ITP 2.1 and 2.2 restricting 1st party cookies after 24 hrs for the first time - this is a massive concern looking at the browser share highlighting Safari at 33%, which puts a third of activity at risk.

    Another new flag, chrome://flags/#enable-reader-mode, adds Reader Mode to Google Chrome. The feature is disabled by default and needs to be enabled by loading the address and setting the feature to Enabled. Note that it is necessary to restart Chrome before the feature becomes available.

    Most recently, Firefox released their enhanced tracking prevention by default to new users blocking known “third-party tracking cookies” according to the Disconnect list. Also the latest release of the Facebook Container prevents Facebook from tracking users on the web, including those sites that have embedded Facebook capabilities such as the Share and Like buttons onsite.
  • And of course, regulators are catching up to set safer data privacy rules as the industry failed to self regulate.

    GDPR still forms the most comprehensive regulation in EU law on data protection and privacy for all individual citizens of the European Union and the European Economic Area. It also addresses the transfer of personal data outside the EU and EEA areas.

    The recent passing of the New York SHIELD Security Act alongside the Nevada’s and California’s privacy acts, signals the coming of a patchwork of fifty-plus different data privacy standards across the country.

    California Consumer Privacy Act: Beginning Jan. 1, 2020, the bill, in part, would grant a consumer the right to request a business to disclose the categories and specific pieces of personal information that it collects about the consumer, the categories of sources from which that information is collected, the business purposes for collecting or selling the information and the categories of third parties with which the information is shared. The bill would also require a business to make disclosures about the information and the purposes for which it is used.
    The purpose of this article is to introduce marketers to the major concepts of the new California Consumer Privacy Act of 2018 (CCPA).

    The General Data Protection Regulation 2016/679 is a regulation in EU law on data protection and privacy for all individual citizens of the European Union and the European Economic Area. It also addresses the transfer of personal data outside the EU and EEA areas. Wikipedia
    Implementation date: 25 May 2018
    Date made: 14 April 2016
    Replaces: Data Protection Directive
    Commission proposal: COM/2012/010 final – 2012/0010 (COD)
    Made by: European Parliament and Council of the European Union

    Nevada’s law will require operators of Internet websites and online services to follow a consumer’s direction not to sell his or her personal data.  The Nevada law differs from the California Consumer Privacy Act (“CCPA”) enacted last year in notable ways, and could signal the coming of a patchwork of fifty-plus different data privacy standards across the country, much like the state data breach notification laws.stry have failed to created self-regulations.
    SB 220 provides operators the flexibility to provide consumers with one of the following mechanisms to submit an opt-out request: an email address, a toll-free telephone number, or an Internet website.
    Nevada has no opt-in requirements
    (1) a first and last name; (2) a physical address which includes the name of a street and the name of a city or town; (3) an e-mail address; (4) a telephone number; (5) a social security number; (6) an identifier that allows a specific person to be contacted; or (7) any other information concerning a person collected from the person through the Internet website or online service of the operator and maintained in combination with an identifier in a form that makes the information personally identifiable
    Nevada provides operators less time to respond to consumers’ requests.  SB 220 requires operators to respond to verified requests within 60 days after they receive the request and permits a business to extend their response by up to 30 days.  In contrast, the CCPA gives businesses 45 days to respond to requests, but appears to permit them to extend the response by 90 additional days.
    In addition, unlike the CCPA, SB 220 does not include rights of access, portability, deletion, or non-discrimination. 

    NYPA’s failed to receive the necessary backing this summer. It introduces new standards of care — basic norms and practices — that protect rather than exploit consumer information.   
    The legislation would also have enabled a private right of action — a long-sought goal by privacy rights activists — which would allow individuals to sue tech companies for data breaches and other infringements. Right now, most privacy scandals are handled through a higher authority, rather than by individuals. In the case of the CCPA, for instance, legal action against tech giants is taken by the state's Attorney General, typically on behalf of a collective of affected consumers.  
    The bill would also have increased transparency about how data is being used, with a mandate that companies routinely alert consumers to the types of data being collected, the purpose for its collection, as well as the kinds of data being shared with third parties and the identities of those third parties.  
    Tech- and business-oriented lobbyists appeared at a June Senate hearing to decry the bill. These included the Retail Council for New York State, industry trade association TechNet, Tech NYC, the Business Council of New York State, and the Internet Association, which represents the likes of Amazon, Google and Facebook. 

    ePrivacy Regulations
    The European Union ePrivacy regulation has been published to broaden the scope of the current ePrivacy Directive and align the various online privacy rules that exist across EU member states. The regulation takes on board all definitions of privacy and data that were introduced within the General Data Protection Regulations, and acts to clarify and enhance it. In particular, the areas of unsolicited marketing, Cookies and Confidentiality are covered in a more specific context.
    Unsolicited Marketing
    The regulations now include any type of communications, including emails and text messages, to be consented to before being used. Marketers will not be able to send emails or text without prior permission from each email or mobile account holder.
    Cookies will now be tracked within software and the user’s browser within settings that each user can change to their needs. This will do away with the litany of banner pop ups that request consent for use of cookies on individual websites. This changes previous regulations which made each website request the ability to use cookies from each user.
    Since the ePrivacy regulations are an add on to the existing ePrivacy directive, one aim was to broaden the scope to include online communications providers under the same requirements as traditional telecommunications providers. In this regard, companies including Gmail, Skype, Facebook Messenger and WhatsApp are now required to provide the same level of customer data safety as bricks and mortar providers. Providers of any electronic communication service are required to secure all communications through the best available techniques. This creates a need for websites to stay technologically in sync with the best safety features available on the market.
    The new provisions create the necessity for metadata to be treated the same as the actual content of the communication that it is facilitating being sent. It prohibits the interception of any such communication except where authorized by an EU member state specifically under law (such as within a criminal investigation).

    The General Data Protection Regulation (GDPR) was created to align the data privacy laws across all EU countries. The GDPR came into effect in replaces the Data Protection Directive 95/46/EC. A major update within the GDPR is that the processing of any EU citizens’ information is now protected, regardless of whether the information processing is done within the EU or not, and regardless of where the retailer originates from. Any retailer around the globe that sells to an EU citizen is bound by law to protect their private data.
    The idea of traffic data has been expanded in the GDPR to include all metadata that derives as a result of the communications. The GDPR also strengthens the area of consent to how a user’s personal information can be used or whether it can be shared. It also makes it easy for users to access their personal data and a requirement for all businesses and websites that take any information from any user to maintain the information and make it available to the user if requested.
    An important ‘right to be forgotten’ is regulated for under the GDPR and a right to data portability.
    Main Differences ePrivacy and GDPR
    Each regulation was drawn up to reflect a different segment of EU law. The GDPR was created to enshrine Article 8 of the European Charter of Human Rights in terms of protecting personal data, while the ePrivacy regulation was created to enshrine Article 7 of the charter in respect to a person’s private life. The private sphere of the end user is covered under the ePrivacy regulations, making it a requirement for a user’s privacy to be protected at every stage of every online interaction.
    It is important to remember that the ePrivacy regulation was created to complement and particularize the GDPR, so the rules of the GDPR are always relevant and an overall part of the legislative aspects of the ePrivacy.
    The ePrivacy directive takes the broad online retail sector into account in terms of how personal information might be used and in this sense is what it adds to the overall regulations that make up the GDRP.
    The ePrivacy regulations are on track to replace the GDPR in terms of applicability. While each regulation revolves around data and privacy, the main aim of both was integration of all laws, which makes the GDPR nearly redundant in light of the all-encompassing coverage that the ePrivacy regulations now bring. There is scope for the EU to amalgamate both regulations in one set which covers both Article 7 and 8 of the charter.
    By defining each particular situation that a user could enter into, both laws work together to ensure that internet users have control over their data and that there is an onus on all websites to maintain all user data in a way that guarantees safety of the information. The definition of information is extended within the acts to include the metadata that derives from it and creates an ownership over an IP address and all other online identifiers that help to strengthen rights of internet users across the EU.
  • In looking at this slide, it’s important to note the direction of the arrows between the consumer and the partners they use online. The dynamic is a proactive one for the consumer. They are actively visiting these websites, seeking out their content, or guidance or support in helping them to understand which products or brands match their personal requirements.

    Brands that are able to identify the sites that most align with their target audience and who share similar values can leverage this trusted relationship to market themselves more effectively. Affiliate Marketing, and more importantly affiliate marketing networks, allow brands to do this strategically, efficiently and, most importantly, cost effectively.

    Working with affiliate networks provides retailers with immediate access to a large directory of top-performing, vetted revenue drivers that have established trust with their consumer, with their own unique experiences and skills you can tap into and benefit from. Regardless of whether you’re looking to leverage influencer, mass media, search, display or coupon partners, an affiliate marketing network can forge relationships with your brand and any or all of these partners to generate awareness and revenue for your business.
  • To illustrate this point, let’s examine an example of where affiliate marketing was extremely successful in driving new revenue for makeup company Sephora in the Brazilian market.

    Since 2013, the company has invested heavily in its relationships with influencers via its affiliate program but recently evolved their approach, working more creatively than ever with a small number of handpicked brand ambassadors. At the core of Sephora’s new approach was a shift in focus from specific, campaign-based activity to one that sought to build long-term, sustainable relationships with influencers. With relatively small budgets available, this new focus represented a challenge and compelled the brand to focus on working with smaller ‘micro-influencers.’ However, it was soon discovered that these influencers in fact had the most loyal followers and, handled correctly, could deliver significant value to Sephora to drive new revenue.

    In Brazil it is typical for brands to manage influencers directly, so Awin suggested that the network centrally coordinate and manage their influencer program to streamline brand efforts. A project was initiated to educate 20 micro-influencers unfamiliar with affiliate marketing on nine different elements that would align the influencers’ focus with Sephora’s objectives.

    These 20 handpicked influencers understood they were part of an exclusive group that Sephora and the network would support, not just for a single campaign but on an ongoing basis, as they helped to promote and grow with the brand. Typically, influencer campaigns are not subjected to the same targets as more conventional publisher types. Therefore, three key performance indicators were established with goals set that would better suit the activity that these influencers engaged in: Conversion Rate, Sales Volume and Brand Fit.

    An additional 2% commission incentive was offered if one criteria was met. If two criteria were met, this was increased to 2-3%. If all three were hit, these publishers could earn an additional 3-3.5% commission. This incentivized approach led not only to additional exposure for the brand, but also aligned the publishers with the Sephora program targets.

    Overall, the shift in focus proved to be hugely beneficial for Sephora, helping them build much stronger relationships with a selection of Brazil’s most influential publishers that were aligned with their own brand identity to then leverage those influencer’s established trust with their audiences to drive revenue for the brand.. Not only did the network approach allow them to streamline the management of these partnerships, but it also generated significant value for them over the first 12 months of their partnership including: 6.8m combined reach of the 20 influencers audience, 60K in clicks generated by the influencers during this long term partnership, and an 11:1 return on investment for Sephora.

    This example of a brand leveraging affiliate partnership relationships with their individual audiences to build brand awareness and loyalty and drive revenue demonstrates how this tactic has universal applications. Consumer reliance on affiliate partnership, and trust with those affiliate partnerships is universal. And global affiliate marketing networks like Awin are key to leveraging this tactic for maximum revenue generation and return on investment.
  • Affiliate marketing only tracks essential data points needed to attribute a sale from a revenue driving affiliate partner to a retailer, never a consumer’s personally identifiable information

    The above highlights the basic consumer journey to purchase. In this journey, the consumer visits a trusted website or source of information (whether that be to examine a product recommendation, capture a coupon code or take advantage of a cashback offering.) From that website, the consumer then clicks on and is redirected to the merchant’s website, ultimately making a purchase.

    At its core level, with affiliate marketing a cookie is dropped upon the consumer click to allow for tracking of a potential sale. Upon completion of the sale, the merchant shares essential order confirmation information, including user IP, order ID, revenue and purchase date, with the affiliate network to allow for crediting and rewarding of that sale back to the affiliate partner. No additional information or data points are required.

    In contrast to affiliate marketing which just captures point of sale metrics only, programmatic display for example would need to capture a lot more data to function as it’s following the customer, search history and browser history.

    Remember, 85% of consumers now say they will not do business with a company if they have concerns about how it’s using their data. With affiliate marketing, those concerns decrease exponentially.
  • As we mentioned earlier, with the release of five tracking or cookie blocking browser updates since 2018 and more expected in the future, the digital marketing industry has had to retroactively respond with solutions to overcome these roadblocks or risk great revenue loss.

    And while we can’t speak to how other affiliate networks have responded to declining third party tracking, we can speak to how the Awin responded to futureproof our client’s revenue by safeguarding tracking for both our advertisers their affiliate partners ….

    For any retailer working with any affiliate network, some level of tracking integration is required. As ITP evolved and more browsers adjusted cookie and privacy handling, there was a focus on first-party cookie sol​utions to safeguard both advertiser and publisher revenue. For Awin, this meant ensuring our first-party cookie technology, Advertiser Mastertag, was implemented across all of our clients websites.

    We also put more emphasis on server to server tracking following the onset of these browser updates, to remove the browser from the tracking chain and allows the advertisers to talk directly to network and send over the tracking information.

    Much more unique, and perhaps an indicator of where the affiliate industry's tracking focus will shift, Awin recently developed and deployed a version of our MasterTag, as well as a Tracking Optimisation enhancement, to give more control to the affiliate partners. In a typical network situation, tracking is centred around the advertisers and the publishers just link to these advertisers. Therefore, it would be the advertisers integration to determine if a sale is tracked or not. Awin’s Tracking Optimisation enhancement is the industry's first step towards truly user-focused, selecting the best linking method to use with the best chance of success that doesn’t overstep any barriers implemented by the user or browser.

    The evolution and adaptability of these tracking solutions, made simpler thanks to affiliate marketing's data light model, ensure that the industry will continue to flourish when other marketing channels may suffer from regulatory red tape and an increasing amount of users who are taking active steps in protecting themselves online.
  • This presentation merely touches on the value on the affiliate channel and how it’s worth the marketing investment from retailers like yourselves in a climate rife with obstacles and threats to your hard-earned revenue.

    Interested in learning more? On your chair you will find a copy of the latest edition of The Awin Report, our definitive guide to the affiliate industry that comprehensively analyses the nuances of the 15 markets and variety of verticals we operation in. You can also download a copy on our website.

    Additionally, myself and my colleague Andrew here with me today would love to speak to you more about futureproofing your digital marketing revenue with affiliate marketing. You can also reach us via email at us-newbusiness@awin.com