Affiliate Linking And Data Collection: When Revenue Isn’t The Value

affiliatelinkscalesWhile affiliate marketing is hardly new – perhaps you’ve heard of Google and Amazon – for some publishers its real value comes from the data and optimization it enables, as opposed to the incremental revenue it generates.

At least, this is what Alicia Navarro, CEO and co-founder of content monetization company Skimlinks, was led to after eight years of building affiliate link programs for publishers like Time Inc., The Huffington Post and Hearst.

The company’s original and still salient pitch to digital publishers is the opportunity to tap their readers without having to sacrifice user experience or teach the editorial team how to maintain an affiliate link program.

Gawker Media, for example, has sites like Gizmodo and Lifehacker that feature and review products across consumer tech and CPG. When the publisher made a decision to diversify its revenue stream to stabilize against unreliable online ad sales, it partnered with Skimlinks.

“Our technology will track that click-through and help get them a commission on that sale,” said Navarro. But it turns out that “tracking that click-through” is more important than the commission.

Refinery29, a digital fashion and lifestyle publication, wanted a layer of commerce over its content, said CTO Peter Wang.

But Refinery29 soon discovered that the incremental revenue from affiliate linking is insubstantial compared to the indirect benefits. “Getting paid for transaction referrals isn’t actually a huge deal for us,” said Wang, who pointed out that the publisher would have to scale the program by “huge multiples” in order for it to be a meaningful revenue stream.

“Between this year and next,” said Wang, “shopping and commerce is a stepping stone to learning more about our audience than the affiliate itself. It’s great we can monetize, but it’s the data we want.”

When Skimlinks tracks a user who is being sent from a publisher to a commerce site, with the intention of converting a sale and sending back a commission, it gives that publisher “a way to see data on users when they leave the site.”

For the editorial team, it’s a way to pick up trends and hone coverage, discovering what’s selling (Wang brings up the bell-bottom trend, which they can identify without actually covering on the site just by following the data crumbs as users travel down an affiliate link) and what kind of editorial leads to converted sales.

Refinery29 found that the data was more important for ad sales teams, who can now approach potential clients with attributable sales under their belts, as well as metrics on how editorial content leads to conversions.

“It also gives a chance to experiment without cost,” said Wang. “In fact, we can experiment and it’s a net positive.”

For instance, if Refinery29 has editorial on a $3,000 bag, and there’s a user who has expressed interest (perhaps they saved the post or clicked the affiliate link), the data pulled via Skimlinks allows them to test a new feature that provides that user with similar bags at lower price points. Or Refinery29 can build a feature to redirect users if the item they want is out of stock.

“There’s the short-term thinking for sales, which is the direct commerce we push on the site,” said Wang. “What we’re excited about is the more long-term perspective on sales, being able to build a franchise around knowing what our readers want.”

Gawker also realized that by connecting its content with the commerce it was catalyzing, whole new data sets were emerging on its readers and their consumer trends. The company built its own commerce editorial team, which worked to optimize the affiliate program and editorial content, such as “linking to Amazon instead of Sony for tech gadgets, since Amazon converts better,” or “reinforming biz dev teams on what products or companies were most popular with Gawker’s readers,” according to Navarro.

Eventually, Gawker launched Dealzmodo, a Gizmodo offshoot that collects daily deals on consumer and tech products that Gawker knows will perform well with its audience.

The other benefit of affiliate marketing is it alleviates concerns over user experience that arise when content and commerce merge. These issues are easily overstated, but not insubstantial. The Washington Post discovered this last year, when it accidentally placed a “buy now” button in an article about an overly sexualized cover of a new “Charlie and the Chocolate Factory” print edition.

The buy button, which linked out to Amazon, also raised questions about the Post’s owner, Amazon founder and CEO Jeff Bezos. Those kinds of direct commerce appeals can grate on readers and media critics, while an embedded affiliate link would go unnoticed.

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