How retargeting and affiliate marketing helps retailers track and follow customers (without being arrested for stalking)

It’s a scene that could be lifted from any shopping centre, strip mall or main street in Australia: customers walk in, touch a few products, pop a few pricetags, ask a few uncertain questions and then, even though they have shown a genuine interest in purchasing the toaster, t-shirt or tablecloth, the customer ends up leaving the store with nothing.

There is little a retailer can do once the customer has decided to leave the store — one simply can’t chase them down the street or onto the escalator pleading with them to return to buy something — but it is a definite quandary. You have a customer, or a potential customer at least, who clearly wants something, but for one reason or another, they have chosen to delay the purchase. They have mercantile cold feet.

Now, just for a second, imagine if you could indeed follow that customer, constantly reminding them with images, copy and bespoke creative that they once showed an interest, however fleeting, in making a purchase. From store to store, now in the food court, now on the bus home: you keep following them. Surely you’d be challenged, reported to the police, arrested.

This following and pestering and reminding and encouraging to purchase may be deemed unsavoury behaviour in the real world but in the cavernous internet is just how business is done. It’s a process called ‘Retargeting’ and it’s one of the main tactics in the online retailer’s broader digital strategy.

In Australia, companies like Rakuten Marketing, CJ Affiliate and AdRoll offer retargeting as part of their broader affiliate marketing and ‘linksharing’ offers. These agencies generally operate on a cost-per-sale or cost-per-lead basis, meaning they use several tricks to encourage online browsers to first visit a website, like an online retailer’s transactional site, and then complete a purchase.

This is how it works: an affiliate marketing agency can access an internet browser’s recent history to identify what products they are interested in. If an internet user has been looking up washing machine reviews, for example, an affiliate marketer can then push ads for an online retailer’s laundry appliance range as they continue surfing the net. We’ve all seen these online ads while surfing popular websites and, in fact, you should be seeing some right now on this website, around the placement of this article. Ask yourself, are the ads you’re seeing related to recent websites you’ve visited? If so, that’s retargeting at work.

A customer could be looking up football scores or reading about the latest global turmoil or playing an online game and the ads keep following them. If they then return to a retailer’s website and buy something, an affiliate marketer’s tracking software recognises itself as a lead generator and charges the retailer a commission on the sale. These commissions can vary significantly, from as low as 1 or 2 per cent up to 20 per cent.

As these digital strategies become more advanced and more integrated, sophisticated agencies can push branded content onto social media feeds, like on Twitter and Facebook, directly relating to content the users has previously expressed an interest in. If you have been looking at buying an Arsenal replica jersey with new recruit Alexis Sánchez’s name on the back, a top rate digital marketing agency can then push content relating to sports merchandise, the English Premier League or Chilean tourism onto a Facebook feed to reinforce this view and encourage the user to return to complete the purchase.

While many, if not most, online retailers (and this includes the traditional bricks and mortar retailers that have associated online stores) use some form of affiliate marketing to generate leads and sales, the system has come in for some criticism. Online maverick Ruslan Kogan says these companies use various techniques known as ‘cookie stuffing’ to make it appear that the affiliate marketer has influenced a purchase, when in fact they may not have, while the New York Times has reported that in 2013, two Californian men pleaded guilty to defrauding eBay of more than $20 million by using dodgy affiliate marketing techniques.

Rakuten Marketing Australia is arguably the biggest and most mature of these digital agencies in the world. Its local clients have included Appliances Online, Sportscraft and Deals Direct. Anthony Capano, managing director of the Australian subsidiary, said that bad practices by rogue operators should not give the whole industry a bad name.

“In the past, parts of the affiliate industry have had a bad reputation, where publishers were charging brands for sales that may have been made anyway,” Capano said. “We aim to distance ourselves from that side of the industry and only work with reputable publishers that drive genuine traffic and sales for our clients.”

‘Publishers’ refers to the third party websites — blogs, social media, news sites, among other types — that host the content this digital agency are pushing to web surfers.

In order to combat the negativity, Rakuten has rolled out a software platform called Cadence, which allows its clients to analyse its performance in real time. “Working with Rakuten Marketing has allowed us to analyse the results of our affiliate and retargeting activity in tandem and adjust our strategy accordingly,” said Michael Rosenbaum, cofounder of DealsDirect, one of Rakuten’s clients.

“What we’re hearing from our customers and prospects is that they want transparency into where their affiliate-driven traffic and sales are coming from,” Capano continued, highlighting that as digital marketing becomes more intelligent and intuitive, online retailers have not had to rely so heavily on price to compete with rival players.

“In the past few years in Australia, as has been in the case in other markets globally, the industry has matured and improved its professionalism — the online shopping environment is no longer the bargain basement it once was — and the marketing tactics used to capture the vast amount of money spent online have also grown up accordingly.

“Huge retailers are investing in affiliate marketing and we understand the importance of protecting their brand identity online.”

This author is on Twitter: @Patrickavenell

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