One of the prejudices in the market is that ‘affiliate’ only means coupons and cashback. However, there are dozens of other channels to get through to advertisers’ target audience. These can be content-based projects (blogs, video hosting, social media, etc.), marketplaces, and many other sources of traffic.
For example, Admitad advertiser can perform as webmaster, profiting from ‘non-competing’ offers, suitable for his target audience.
Today we will talk about loyalty programs and try to tell advertisers more about this traffic source.
What is a loyalty program?
A loyalty program is a tool to retain and stimulate your customers.
Acting as a webmaster, company X creates a website where it posts offers of advertisers who joined the loyalty program (companies Y and Z). This display contains descriptions of partnered stores and points scoring policy.
Once on the loyalty program page, a user has to visit partner’s website. In order to do so, they click on the affiliate link that allows CPA networks to access the following information:
- Source of target action (in this case it is loyalty program website);
- How many points the user will gain if case of purchase;
- Webmaster who will receive his reward for the attracted customer (loyalty program owner).
In the end, the client receives not only goods, but also internal currency of the loyalty program (gold, points, miles, etc.). The number of points gained is determined by the terms of the loyalty program and agreements between the parties. Special offers get higher priority and, as a result, are more profitable.
Regina Grinko, head of Loyalty Programs and Coupons:
At the moment, Admitad collaborates with more than 20 loyalty programs.
At first glance it may seem that loyalty programs are very similar to coupons or cashback: the customer makes a purchase through a specific portal and receives certain bonuses. However, there is an important difference. There is no funds withdrawal in loyalty programs. Points, miles and bonuses accumulated by customer are eventually converted into new purchases. The collected points stimulate users to return to the loyalty program website and buy from advertisers again and again.
Read more about loyalty programs in an interview with Head of the Webmasters’ Department, Anna Gidirim.
Why should advertiser join a loyalty program?
First of all, companies with their own loyalty programs (those are huge financial, transport corporations) have large volumes of traffic — their own pool of loyal users. They are interested in monetizing this traffic by providing it to large advertisers and prominent brands.
Secondly, according to Admitad statistics, the average bill in the loyalty segment is 34% higher than the same figure across the platform, and average conversion rate is 18% (against 2.6%).
Of course, there are some downsides — as a rule, large bonus programs carefully pick advertisers to cooperate with. They may reject a request for participation if, for some reason, they decide that your store is not of interest to their audience.
Loyalty programs assess advertisers by three key criteria: are brand reputation, Admitad rating of advertiser and offer interest rate. However, if their catalogue lacks items in some categories or a thematic selection for some event is needed, they can make an exception. In such cases, even relatively small advertisers can join a loyalty program.