the vital quarter – how uk performance marketers prepare, act and analyse over the christmas...

THE VITAL QUARTERHOW UK PERFORMANCE MARKETERS PREPARE, ACT AND ANALYSE OVER THE CHRISTMAS PERIOD

Owen Hewitson | Matt Swan

Amsterdam| 30th September 2011

UK’S LEADING

AFFILIATE NETWORK

Established2000

1300merchants

Over

75kaffiliates

200staff

€1.74bn

OVERVIEW OF THE Q4 TRADING PERIOD IN THE UK MARKET

● £6.8bn (€7.8bn) spent online during December 2010 (source)

● Up 7% on November; up 25% on December 2009 (source)

● 20% of the UK’s retail sales are generated in November and December (source)

● 62% of online consumers shopped online on Christmas Day or Boxing Day (source)

● 22% of online consumers used their mobile device (source)

BUT…

● 45% of those who shopped online encountered website problems while doing their Christmas shopping (source)

● 32% abandoned purchases as a result (source)

● 26% of those who did ordered before the last delivery date did not receive their goods in time (source)

Q4 GROWTH ON THE AFFILIATE WINDOW NETWORK

+27%

+49%

+29%

• Monday 22nd November : Amazon commences five days of ‘Lightning Deals’.

• Friday 26th November: Amazon brings ‘Black Friday’, a US-tradition following Thanksgiving, to the UK for the first time.

• Monday 29th November: ‘Manic Monday’, expected to be the biggest pre-Christmas sales day

‘Manic Monday’ actually second quietest day of the week for commissions

Week peaked on Wednesday 1st December

Monday 6th December: The first Monday in December is the traditional peak for online trading in the UK

Monday 6th December: The first Monday in December is the traditional peak for online trading in the UK

Monday 6th December biggest Christmas trading day for Affiliate Window, with 20% more sales than the previous Monday

Post-Christmas sales traditionally start on Boxing Day, causing second sales wave

Tuesday 4th January: VAT (sales tax in the UK) increases from 17.5% to 20%

No post-Christmas peak as retailers vary the start of their sales

Transactions drop but sales revenue up 63% on Christmas average, and double the 6th December pre-Christmas peak

AOVs reach a Christmas peak of £122 ahead of VAT increase. Electrical, home appliance, computing and furniture retailers fare best

Conversions better after Christmas than before it

Berlin | 04.04.2011 | zanox | Presentation title

BY ADVERTISER SECTOR:MON 6TH DECEMBER – TUES 4TH JANUARY

13Berlin | 04.04.2011 | zanox | Presentation title

BY PUBLISHER PROMOTIONAL METHOD:MON 6TH DECEMBER – TUES 4TH JANUARY

Peak is Monday 6th December, in line with network as a whole

Peak on Mon 13th, but general pattern follows traditional Christmas sales trajectory closely

Peak for content on 13th; close alignment to the patterns for loyalty, reward & cashback

Peak is Monday 13th, after which efficacy seems to drop

Peak is Thursday 16th, close to last order day

Price comparison experiences massive uplift prior to sales tax increase

WHAT CAN WE LEARN FROM CHRISTMAS 2010?

●Vital to start early

●Treat Christmas as two-stage event: before and after

●A clear pre-Christmas peak in sales – 6th December – but no clear post-Christmas peak due to staggered sales

●Mondays pre-Christmas always see sales spikes

●Focus on vouchers, downloads and advertisers with mobile tracking when last order date passes

●Expect the unexpected!

21

Pitfalls and Opportunities

22

23

24

●Trust

●Consistency

●Partnership

25

PITFALLS

● Over Incentivisation

● What is likely to be the natural uplift in sales over this period?

● Understanding the actual cost of promotions– looking beyond the sale

● Publishers over incentivising customers

26

PITFALLS

● Neglecting the longtail

● Pareto 80/20 rule

● Longtail a top affiliate in their own right

● Christmas incentives should be inclusive of the longtail

27

RED LETTER DAYS – ENGAGING THE LONGTAIL

● Christmas promotion was all inclusive

● Promotions tend to focus on volume drivers/neglect longtail

● Prizes awarded for best promotion of the campaign

● Guaranteed prizes for hitting certain sales volumes

28

RELIANCE ON TOP 10 REDUCING

2007 2008 2009 20100

10

20

30

40

50

60

70

Top 10 Longtail

HOW MOBILE IS DRIVING THE TRENDS

● 5% of Affiliate Window’s sales now come from mobile devices

● Some advertisers drive up to 12% of their affiliate sales through mobile

● iPad overtook iPhone in sales for the first time on Christmas Day 2010

● The iPad outstrips other devices and the network in general on click to sale conversions

● Affiliate mobile applications becoming mainstream as affiliates build brands

30

December January February March April May June July August0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

% Mobile Traffic

% Mobile Traffic

31

December January February March April May June July August0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

% Mobile Sales

% Mobile Sales

• Exclusive 10% off via Vouchercloud app• Redeemed at point of sale in store• Tracked into the Debenhams’ database• Attributed to affiliate channel

• Affiliates drove 43% of total sales• Majority (57%) redeemed in store• 70% were new customers

RESULTS

33

PUBLISHERS ADDING VALUE

●Advertisers require publishers to demonstrate more than just volume

●Customer profiling – understanding the value of traffic

●Tactical use of voucher codes/cashback

SUMMARY

●Vital to start early

●Budgeting is a vital component of planning

●Important not to neglect the longtail

●Mobile driving growth trends

●Advertisers looking for value beyond sales volumes

QUESTIONS?Owen Hewitson | Matt Swan

Owen.Hewitson@affiliatewindow.com

Matt.Swan@affiliatewindow.com