What is your business and how is the affiliate channel important to it?
We are a digital marketing agency built on the perfect union of marketers and engineers. The agency works with the largest global brands to redefine the future of customer experience through new technologies. We have 25 offices across 17 countries, with 1,000+ employees delivering three service offers: Data Consulting, Digital Marketing Expertise and Technology Development (Big Data and Artificial Intelligence). As a digital marketing agency, affiliate marketing is one of our core pillars within our activation offers, and is the second biggest department in terms of dedicated personnel and clients with constant growth year-on-year. The channel is particularly wide-ranging and has the ability to constantly evolve and adapt itself to its participants thanks to the new partner models which are always entering the affiliate market.
How important is affiliate marketing in Germany right now?
Affiliate marketing is very important as it is a constant growing channel. We can see this growth not only within existing programmes thanks to more and more interesting new publisher models popping up, but also within programmes that now start for the first time working with affiliates. In addition, we also notice affiliate websites generating more and more traffic. Compared to other digital advertising channels, affiliate marketing is not as technology and data-driven so another approach is needed, but we also need to measure the impact of affiliates from a cross-channel point of view. With two of our international clients, another attribution model than the traditional ‘last cookie wins’ logic has been implemented and we notice a very positive impact on that.
CEO Germany & Switzerland
What impact does the merger of Awin and affilinet have upon your business in Germany?
When it comes to our German business, we always tried to challenge the two big networks in Germany – so this will obviously change. We are very keen to explore the next steps with Awin after the merger and will hopefully see an increase concerning the service level, the technology and a more advanced platform.
How would you describe the current state of digital adoption amongst the Germany population?
From my point of view, a progress towards digitisation in Germany is about to take hold. If you take a close look on search query results in PPC, you can see the usage of smart assistants is increasing. However, numerous surveys confirm that Germans are still sceptical about digitisation primarily because of the possible violations of privacy it exposes them to. Compared to a market like China for example, the digital development in Germany is much too slow.
What are the biggest challenges currently facing digital advertisers and publishers in Germany?
I think one of the biggest challenges for both, advertisers and publishers, is the uncertainty due to GDPR and especially the upcoming e-privacy directive which will have a huge impact on affiliate marketing as well as other digital channels. In addition, Safari’s ITP 2.0 browser update creates a challenge for advertisers and publishers as tracking in third-party environments is supressed so that workarounds need to be setup.
CEO Germany & Switzerland
How important a concern are data privacy issues for German consumers and what impact is this having upon digital advertising there?
One of the biggest issues for German consumers is their privacy. The market here has always been strict when it comes to personal data. For example, consider the adoption of the Digital Object Identifier (DOI) system, which is a standard in Germany but not in other parts of Europe. Due to this, it is more complicated to use generated or bought data for digital advertising. A personalised form of marketing is therefore made hardly possible and needs to accept a lot of technical limitations compared to other digital advertising markets. Politicians here are thus still very defensive in taking a clear position on, for example, e-privacy according to these market-specific differences.
What consumer trends have you noticed that appear distinctive to the German market?
In terms of payment methods, Germans are still very reluctant to change habits. In Germany it is not very common to use any other payment method except credit card or at best, PayPal, for online shopping. This payment trend is a relevant factor for performance marketing in Germany. Coming along with the different branches of our advertisers, we notice a trend also for both mobile-first and mobile-only experiences. Finally, voice search is increasing and we expect this trend to grow even more in 2019.
How important are large retail events like Black Friday to Germany?
During the last few years we have noticed an enormous increase in the importance of Black Friday and Cyber Monday with different promotions for our dvertisers. However, both days surely have yet not reached the popularity they have in the US or UK. With our international advertisers, we also see that APAC events such as the Singles Day are becoming more relevant, too. Beside those dedicated retail events, seasonality still has a huge impact on performance. Of ourse, the Christmas period is one of the strongest ones but also Easter as well as Valentine’s Day gain more interest for special promotions. When it comes to travel advertisers, the early booking period in January is the most relevant one, followed by the last-minute season from June till August. Summer, winter and mid-season sales influence our fashion advertisers’ business, while for the insurance and contractual branch the end of the year, so mainly October and November, are high-season.
What one thing would you change today in the affiliate industry if you could?
Unfortunately, affiliate marketing still has a negative association of being more prone to fraud than other digital channels. Ever since its early days the industry was perhaps too transparent in talking about those incidents so that a lot of online marketers didn’t really notice that the fraud being caused in other channels massively exceeded the damages done by affiliate fraud. Therefore, the one thing I would change is to call for better self-marketing of the industry.
How do you expect the affiliate industry to evolve in Germany over the next two years?
I expect further consolidations and strategic alliances arising between all parties involved, particularly between networks and publishers. In addition to that, I also think there finally will be more automation for time-consuming tasks to be able to focus on what affiliate marketing actually is: a people’s business.