Saving for Air Miles, sticking trading stamps from the supermarket, local storekeepers’ point systems… all of these are loyalty programs aimed at the consumer who is (mainly) offline. An online counterpart of the time-honoured ‘saving for discount’ is ‘ cashback.’ A more economical way for the consumer to shop online; the ultimate way for advertisers to bring in new customers, retain existing customers, raise brand awareness, and reach the right target group through segmentation. But what exactly is cashback, and how can you, as an advertiser, apply it in order to achieve your objectives? In ’Cashback in the Year 2015,’ we explain how cashback works, how you can apply it as an effective marketing tool, and which developments you may expect in the near future concerning cashback and affiliate marketing.
Affiliate marketing: no cure, no pay
Those who want to advertise online cannot get around it: affiliate marketing. A form of internet marketing in which a partner (affiliate) promotes an advertiser on a contingent fee. An affiliate can refer (potential) customers to the advertiser by promoting the advertiser – through an advertisement on a website, for example. If this results in a sale (or lead, page view, click, or app install), the affiliate will receive a commission fee. To be able to measure purchases through affiliate marketing, special tracking links are used and you – as an advertiser – collaborate closely with an affiliate network. They can help you find the affiliates that fit your website and/or product. There may be bloggers who would love to blog about your product because it fits the topic of their blog site; comparative websites that are happy to include the assortment in their overview; and cashback websites that would like to put your webshop on the map and promote it among their (often extremely loyal) members. A conscious choice with regard to allowing affiliates to promote your webshop and/or products can make a considerable difference in achieving predetermined objectives. Therefore, it is recommended that you, as an advertiser, gain more in-depth knowledge on this – either by doing your own research or by consulting with the affiliate network.
What is cashback and how does it work?
Cashback is a form of affiliate marketing that can be very appealing to advertisers. Cashback websites are affiliates that provide a portion of their commission fee to the consumer – who realised the sale or lead – in the form of points or money. The promotional channels of cashback websites may vary from online shopping through their websites to mailings, social media, and, for example, their own app. Thanks to the often large membership base, an advertiser can reach a wide audience through a cashback website.
The popularity of cashback is skyrocketing
Within Europe, Britain is a few years ahead of other countries in the field of cashback. There, ’cashback’ is a household word, and consumers shop online with cashback through well-known cashback websites such as Quidco
.In the Netherlands, cashback was lagging behind a bit, but by now, it has outgrown its infancy. Online bargain hunting, accumulating points, and searching for the nicest products at the best price are activities that grow asonline shopping grows
. Cashback websites are, so to speak, online market places with shops. Both in the orientation phase and in the purchasing phase, consumers refer to cashback websites. It is the ultimate opportunity for advertisers to reach a wide audience. Cashback shoppers, who are generally loyal, search the offer of the cashback website for webshops in which they can purchase the desired product. If an advertiser cannot be found here, the webshop will quickly fall outside the options of the consumer. Over the past few years, the range of professional cashback websites has increased substantially. Every month, thousands of consumers shop online through cashback websites; from electronics to vacations and from smartphones to entire new wardrobes. By completing their profile information and making online purchases, cashback consumers provide a clear picture of their spheres of interest. Because of this, it is possible to make these consumers personal and fitted offers. For advertisers, this segmentation is a means of focusing (exclusively) on consumers that are included in the potential target profile
through cashback websites.
Find your target group and achieve your goals
When advertising through cashback websites, it is recommended – as with every marketing activity – to formulate clear campaign objectives beforehand. A company may want to increase its general brand awareness and, for that reason, focus on the widest possible group of consumers. Through good segmentation, however, other goals can also be achieved, such as the acquisition of new customers, customer retention, and the realisation of more purchases per customer. Not only do clearly defined objectives make an affiliate marketing campaign measurable to the advertiser; they also enable affiliates to apply the appropriate channel and utilise the correct segmentation. The variety of promotional channels enables larger cashback websites in particular to achieve the objectives of an advertiser in the most effective possible way. Personal contact between advertiser and cashback website – potentially with the intervention of the affiliate network – is key in this regard.
Finding the right cashback websites
If you Google ‘cashback,’ you will get a load of search results relating to the movie of the same name, as well as a wealth of pages referring to cashback or cashback-related websites. A huge proliferation has (unfortunately) also arisen as a result of the growing popularity of cashback shopping. Some are more professional than others. Both large and small parties try to get their own piece of the ‘cashback pie’ and convince online shoppers to shop through their website. However, not all of them realise that a cashback website does not have a short-term revenue model; that promotion requires considerable financial investments; and that a standard (cheap) cashback script only provides a glimpse of the required technical support. Developing and maintaining a well-functioning cashback website requires more than you might think at first. In technical terms, everything should be set in such a way that each click and purchase can be tracked and linked to the consumer’s account. Providing excellent service to your customers is also an important aspect that allows cashback websites to set themselves apart and to contribute significantly to the customer’s experience. Finding the right cashback websites, however, does not have to be a challenge. Affiliate networks (the link between advertisers and affiliates) know the market and are able to fulfil an advisory role in this regard.
The future of cashback
Growth also comes with change. While cashback is developing into a fully-fledged form of affiliate marketing – which more and more advertisers utilise in order to reach their target group – the general landscape will also change.
- Larger cashback affiliates dominate the marketBecause advertisers are starting to make conscious choices within the offer of cashback websites, the offer of cashback affiliates will change. Through a consolidation of cashback websites, more and more small parties will disappear, and the larger cashback affiliates will continue to grow.
- A new target group: mobile shoppers If you look at the growth in the number of mobile users and devices, it is clear that this will also form an important channel within the cashback market. The number of mobile shoppers is increasing significantly, as OrangeBuddies Media has also noticed among its own website users in several European countries. More than 25% of the users already shop using a smartphone or tablet. With this shift to mobile shopping and the increasing mobile range, cashback promotions & special offers can also be tailored to the mobile channel to a greater extent. Larger cashback affiliates have already made ‘mobile’ a separate focus area within their general strategy, and mobile users can be targeted through their own cashback apps.
- Cashback communities for a better customer experience Cashback websites are no longer just a brief stopover in the purchasing process of the consumer. Within the cashback platform – which is increasingly turning into a community – consumers provide information and advice to each other more and more often, trends & tips are being given per shopping category, and the product offering of affiliated webshops is visible. Cashback websites that are developing in this direction offer webshops a new channel to fully present themselves. Because of this, they play an important part in the customer journey much sooner, which enhances the customer experience.
- Segmentation and a personal approach A personal approach of consumers through cashback websites rather than haphazardly implementing campaigns. Because of the large amount of consumer profiles that cashback affiliates have at their disposal, the right consumers can be addressed through segmentation.
Getting started with cashback
Cashback affiliates that constantly continue to develop pick up signals from the (changing) market and anticipate these can clearly be valuable to advertisers who are trying to achieve their marketing objectives. A prerequisite for this is either a direct ‘collaboration’ with the cashback affiliate or intensive contact with the affiliate network. You, as an advertiser, can give your affiliates the opportunity to achieve 200% effectiveness by communicating the objectives in a clear manner – and they, but especially you will benefit from it. Indicate the marketing goals as well as what you want to emanate, so that the correct profiling ensures an even better result. Would you like to learn more about cashback, the manner in which you – as an advertiser – can apply it, and the opportunities that this promotional channel presents in the (long) term? Please do not hesitate to contact us
and we are happy to tell you more about it!