Mobile Commerce And The Future Of Affiliate Marketing

It’s hard to ignore all the talk about the potential of mobile commerce given the positive forecasts from industry analysts and researchers. Consider these compelling statistics:

• There will be 115.8 million smartphone users in the US by the end of 2012, and that number is expected to reach 176.3 million by 2015. (via eMarketer)
• 64 percent of smartphone owners are now using their mobile devices to shop online. (via eDigital Research and PortalTech Reply)
• In 2012, mobile commerce sales will rise 73.1 percent for a total of $11.6 billion. (via eMarketer)
• Worldwide mobile payment transactions will surpass $171.5 billion in 2012, up 62 percent from $106 million in 2011. (via Gartner)
• 85 percent of merchants say mobile commerce is a focus in 2012, up from 68 percent in 2011. (via The eTailing Group)
• 1 in 5 tablet owners in the U.S. have used the device to purchase apparel and accessories. (via comScore)

As hot as mobile commerce is today, it’s still evolving as new platforms and devices are introduced.

From a business perspective, we’re just beginning to get a glimpse into the enormous potential of the mobile commerce market. Still, it’s easy to imagine the not-so-distant future where mobile commerce will supersede traditional online purchases made on desktops and laptops.

As online consumer behavior evolves, affiliate marketing continues to be a key measurable tactic for online retailers looking to acquire new customers and increase sales.

Affiliate Marketing Growth Will Exceed That Of Paid Search

In a recent study, Forrester estimated that online retailers will increase spending on affiliate marketing by 16.7% per year through 2016. This exceeds the growth of spend on paid search through the same time period.

Part of the evolution of consumer behavior reflects the growth of smartphones and tablets and the rise of Facebook. These factors didn’t exist when affiliate marketing was invented.

Yet despite the promise of a wide range of online advertising models from social to mobile to retargeting, affiliate marketing has held its own and has not fundamentally changed since it was founded.

Affiliate marketing is still going strong for one simple reason — it works.  Publishers can be a source of high-volume, targeted traffic and they have become unrivaled experts at optimizing their own sites.

How To Apply The Affiliate Marketing Model To Mobile

So now that mobile commerce has really taken hold, how can successful affiliate marketing strategies be applied to mobile commerce? The answer is not simple and there are many moving pieces to this puzzle. While mobile commerce is still in its early stages, now is the time, for advertisers and publishers to work together on partnership strategies.

Here are five areas that can’t be overlooked when it comes to mobile commerce and the affiliate channel.

1. Tracking: It’s the foundation of any affiliate marketing program. Retailers cannot assume, however, that tracking provided by an affiliate network will automatically function on a mobile site. It may require a separate installation of tracking and could require technical resources.

Therefore, retailers need to make the affiliate marketing channel part of the overall launch plan of any mobile commerce initiative. The best argument for prioritizing the affiliate channel is that publishers will drive traffic to you once your mobile-optimized site is in place.

2. Know Your Consumers: Many shoppers are getting more comfortable buying from a wide range of categories and mobile devices. Additionally, the path to purchase has never been more non-linear.

Understanding what your customers are shopping for and from what device will inform your online marketing strategy. More specifically, affiliate marketing can help close the sale and drive brand reconsideration. The key to increasing your conversion rates is in understanding when to push offers to certain affiliates who are optimized for certain devices.

3. New Partnerships: One reason that affiliate marketing can be so attractive to retailers is the ongoing innovation in the channel. Many publishers today are already testing mobile commerce applications, sites and strategies.

Retailers don’t have to recreate the wheel but what they do need is a site that is optimized for mobile. Any retailer today with a mobile site that offers a great user experience and a good conversion rate will find lots of new publishers that are looking for partnerships.

Most importantly, publishers are a great source of information and knowledge when it comes to mobile commerce. They will gladly tell advertisers what they need to do to be successful in mobile, because they want to earn commissions.

4. End-to- End Shopping Experience: Successful affiliate marketing strategies for mobile commerce take into account the end-to-end shopping experience starting on the publisher site. A publisher application or publisher website designed for mobile commerce needs advertiser sites that are optimized for mobile.

If consumers have a great experience on a publisher site only to click on a retailer site and be brought to a desktop site that doesn’t convert from a mobile device, then no one makes any money and the consumer leaves unsatisfied.

Savvy publishers will test the end-to-end consumer experience from multiple devices to ensure that the consumer can check out (i.e. the publisher will get a commission).  Advertisers that get this right today will endear themselves to mobile focused publishers and can turn that into a competitive advantage.

5. Data Feeds and Mobile Commerce: Retailers should talk to their publishers about what they require in a data feed optimized for mobile commerce.

Data feeds are increasingly important and the requirements for mobile sites and applications are different. Allow your publishers to customize your data feed for their needs and make sure you have all the necessary fields to drive conversion.

It’s clear that more mobile commerce opportunities will present themselves as marketers and technologists find new ways to make the most of this channel.

Given the speed at which this market is changing, however, advertisers that wait too long to institute an affiliate marketing strategy for mobile commerce may find themselves at a disadvantage, especially as the holiday shopping season approaches.

For affiliates, the opportunities are there if they have the assurance from their performance marketing network that their mobile transactions are being tracked.

Most importantly advertisers and publishers need to discuss various strategies, test new ideas and work together to understand why and when consumers will complete a mobile transaction.