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On-line Behaviour Analysisby Ian Thomas

With the current question mark hanging over the future of the on-line advertising industry, affiliate marketing is increasingly seen as the more enlightened approach to generating on-line awareness and customer acquisition. Instead of the distant relationship between an on-line advertiser and media owners, where the deal is strictly one-way, a well-run affiliate programme offers the opportunity to forge longer-term links between the two parties, ultimately adding value to the proposition of both.

At the heart of any affiliate programme is the relationship between the money paid out to affiliate partners and the quality of the users that are delivered as a result. A successful programme will deliver highly qualified users, at the right time in their on-line session, to a targeted proposition that they can take advantage of immediately. It will not necessarily deliver users in large numbers; it is more important that every visitor who is delivered is high value. Most importantly, the affiliate manager wants to pay a price which is directly related to the business benefit generated by the referred users.

This last point is the most challenging for organisations who wish to run an affiliate programme. It's not just a case of only paying for users who purchase; the affiliate manager must be able to tell how cost-effective the programme is compared to other means of generating visitors to the site. For this reason, detailed post-click behaviour analysis is essential in assessing the value of affiliate marketing, whether you choose to sign up with an established affiliate network such as Ukaffiliates or Tradedoubler, or install your own affiliate management system from the likes of 404found! or MyAffiliateProgram.

When running an affiliate programme, the programme manager needs to know not just which referrals lead to immediate sales, but what other behaviour patterns referred visitors exhibit. Although the popular affiliate networks and systems are good at reporting on the on-line sales generated by referred users, they tend to ignore the other value associated with these users, such as registrations for on-line newsletters, deferred sales, or requests for specific information.

Analysis of actual visitor behaviour on-site reveals this information. The more powerful on-line behaviour analysis tools can integrate with the information coming from the affiliate network or system to deliver detailed information about the full behaviour of all referred visitors, rather than just reports on whether or not they reached certain milestones such as a check-out page. This allows the affiliate manager to negotiate the best deal with the network, or with the individual affiliates, as he or she has the most accurate information about visitor value, irrespective of whether a particular visitor chose to buy anything.

Just as important, however, is understanding the behaviour of visitors who weren't referred by the affiliate programme, as it helps put the success of the programme into context. It's increasingly well understood that the different elements of on-line and off-line marketing cannot be viewed in isolation; additionally, the web is only one of several channels for many organisations, and on-line marketing can generate demand through an off-line channel. For example, retailers of high value goods report that people who have visited their on-line store are much more likely to buy in a high street store, and are better informed about their requirements, having already researched the products on the web.

For this reason, behaviour analysis that integrates the activity of visitors from a number of sources is much more powerful than reporting linked to a specific element of on-line marketing such as an affiliate programme. Judicious use of visitor identification and segmentation, and integration with off-line customer systems such as EPOS data, can allow on-line behaviour to form an important component of overall customer intelligence.

On the other side of the coin, the affiliates themselves can benefit from proper user behaviour analysis of their users, before they refer them on to the merchant. Behaviour analysis can identify the point in a site where a user is most likely to click through to an affiliate logo, and which logo formats and placements are most effective. More importantly, this kind of analysis can help an affiliate understand their own users in more detail, so that they can strike better deals with the affiliate networks and individual programmes. It can also help a site understand where it can afford to lose users to an affiliate scheme; if an affiliate logo is distracting users before they've had a chance to experience the site fully, it could be a false economy, as it may affect loyalty and retention.

The benefit of pre-referral analysis is most marked for 'super-affiliate' sites such as ShopSmart or the Big Brother site. Effectively these sites run affiliate schemes in reverse, charging sponsor organisations to place logos and specific offers on the site. During last year's run of Big Brother, Endemol (the production company behind the show) learned that placement of targeted sponsor offers in the right context (that is, with relevant content, usually about a specific contestant) generated much higher click-through rates than untargeted logos, by a factor of about ten. This enabled them to strike better sponsorship deals for this year's run of the show. It also enabled them to incentivise the sponsors to produce specific offers rather than just treating the sponsorship as a permanent ad.

So behaviour analysis is a crucial element of an on-line marketing campaign, and of particular relevance to affiliate marketing. If you're running an affiliate campaign, whether you choose an affiliate network, run your own specialised software, or build a system in-house, you should take an integrated approach to visitor tracking and analysis and link this analysis to all elements of your campaign. If you're thinking of offering your site up as an affiliate site, understanding your own users better will enable you to strike the best deal. In the end, the people who win most are the users, who are offered highly relevant offers at just the right time. A little better than bombarding them with endless pop-ups.

Ian Thomas

WebAbacus provides software for on-line behaviour analysis, and specialises in the analysis of on-line marketing programmes. Its clients in this area include Ogilvy Interactive, TribalDDB and eMCSaatchi. You can learn more about WebAbacus at www.webabacus.com.