As retailers seek to gain an edge in the Canadian marketplace, online strategies such as affiliate marketing are being increasingly implemented and all retailers should take note. In the UK, advertisers investing more than 31% of their marketing budget in the affiliate channel rose from 11% (2011) to 16% (2012) according to the Internet Advertising Bureau UK. It’s a trend we are likely to see in Canada due to our high internet penetration and online engagement rates.

Last month, the Rakuten LinkShare Symposium in Toronto brought together retailers and affiliates from the U.S., Canada and across the globe at which J.C. Williams Group’s Suthamie Poologasingham, Director of U.S. Marketing and Research, gave a keynote speech on Retail Trends in Canada and Campaign Optimization for the Canadian Consumer. We have shared a few key points to educate and help you improve your online marketing.

What is affiliate marketing?
Affiliate marketing is a performance-based system, whereby a merchant would pay an affiliate for either a visitor or a customer that is brought to them by the affiliate’s efforts (e.g., blogging, advertising, etc.). The main parties involved are the:

• merchant (aka the ‘retailer’ or ‘brand’),
• affiliate network (that contains offers for the affiliate to choose from and also takes care of the payments),
• publisher or affiliate, and
• customer.

Does this strategy make sense for me?
This is a great strategy for retailers and brands as they can have the option to set the pay criteria. They can choose to only pay per sale (PPS), pay per click (PPC) or pay per leads (PPL). Publishers, on the other hand, have to earn the trust of their visitors, whether they provide valuable coupons or deals for their customers or in the case of bloggers, earn the trust of their followers with unique and relevant content. Publishers typically will have the option to choose which brands they want to show up on their website, making the ad content more relevant to their visitors. For example, the latest buzz about Urban Outfitter’s profanity-laced merchandise in their holiday catalogs may keep some affiliate sites (e.g., blogs) away from the brand’s ads, while others may welcome it. With affiliate networks popping up it’s important to ensure that retailers and publishers do their homework and sign up with an affiliate network that gathers top-notch, performing publishers and have a wide range of retailers and brands from which to choose.

What to watch for in 2013 with online advertising
The Rakuten LinkShare Symposium in Toronto, while meant to allow for affiliates and partners to network, was also a good opportunity to share what types of advertising is needed now and down the road. During my keynote speech, I asked the audience how many retailers were using video advertising. In a packed room, only a few hands went up. Considering that YouTube is the #2 search engine and that 91% of the country’s online population regularly watches videos online (Internet Advertising Bureau of Canada and Brightroll 2012), this is one medium retailers should dive into and affiliates should be preparing their sites for. A new report from Kantar Media found that 77% of brands still use national TV advertising exclusively. Both in the U.S. and Canada a strong marketing strategy will make use of online videos to entertain, inform and educate customers while marketing to them. For ideas on video advertising, you can watch the top rated videos on YouTube trends, by region, gender, etc. While the demographics of online viewers are dependent on the accuracy of the user inputting their information when they signup, it still provides a general representation of specific demographics.

For more information on our presentation at Rakuten Linkshare’s Symposium in Toronto on Retail Trends in Canada and Campaign Optimization for the Canadian Consumer, contact us.

If you are interested in affiliate marketing, check out the next Symposium in San Francisco on January 31st.

About Rakuten Linkshare

• Rakuten LinkShare provides online marketing services to leading and emerging retailers and other companies specializing in Affiliate Marketing, Display and Retargeting, Paid Search, and Lead Generation.
• In 2012 Rakuten LinkShare was ranked as having the #1 Affiliate Marketing Network by mThink and named one of the top ten most innovative companies in the world by Forbes magazine.
• Rakuten LinkShare’s parent company Rakuten is the #1 e-commerce and internet services company in Japan and is now quickly establishing a presence around the world.