M.Video: cashback increased frequency of purchases x1.5 times

The efficiency of affiliate channel and of cashback services in particular is somewhat controversial. Some specialists say that it takes advantage of advertiser`s brand and cannibalizes their traffic, while others consider cashback a good way to attract new buyers and boost customer activity.

Within Admitad section about affiliate marketing at Russian Internet Forum (RIF) 2019, retail giant M.Video and digital performance agency iProspect Russia shared the results of their work with the affiliate channel in 2018.

According to Inna Zharova, M.Video’s Internet Marketing Manager, cashback brought the company almost three-quarters of its CPA turnover.

“We wanted to take a look on how CPA traffic affects our customers` activity and decide whether we should continue using this channel”, — says Kirill Petrov, Head of CPA direction in iProspect Russia.

The agency’s analysts studied the dynamics of the average number of orders during the year. Three groups of users were considered: new, loyal and restored customers.

New users — customers who haven’t made any purchases before. They could be registered by then, but had zero transactions on their account.

“It should be noted that on average a new user makes 1.6 purchases per year on our website. CPA traffic delivers 2.4 orders, which is higher than average activity. However, cashback gives us the most interesting number: from this channel the user makes 3.6 purchases a year”, — shared iProspect’s representative.

Loyal customers — customers who buy goods every 3 months and also made orders before. The agency measured their activity during 12 months. First 6 months — before purchasing with cashback, next 6 month — with all transactions made via cashback services.

“We got the following results: before using cashback, the user made an average of 4.7 purchases in 6 months. With cashback, 6.6 purchases were made over the same period. This figure is the most important in our survey — it shows that cashback stimulates user`s activity”, — marked Petrov.

Restored users — customers who didn’t make any purchases for 9 months, but returned and started using cashback.

“If a user returns on his own, he usually makes less than two purchases per year. With CPA traffic this number reaches 2 purchases. Moreover, with cashback, users start ordering goods almost 1.5 times more often (up to 2.5 purchases) when reanimated”, — noticed the head of CPA direction of iProspect Russia.

Conclusion: does cashback parasitize on advertiser`s traffic or not?

«We were afraid that our high cashback conversion cannibalizes our traffic, our users. However, it turned out that cashback doesn’t cannibalize organics but increases customer`s activity instead. And this is despite the fact that the cashback rates in our segment are below the market’s average”, —  the agency’s representative summarized.

The experts of M.Video and iProspect Russia clarified that cashback traffic under examination also included large loyalty programs of such companies as Sberbank, Aeroflot, S7, which give M.Video access to the multi-million audience.

According to Kirill Petrov predictions, cashback will be in trend for next 3-4 years, and then loyalty programs will rise to the fore.

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