Will Coupons Destroy or Save Affiliate Marketing? « Affiliate Marketing Blog by Geno Prussakov

Raven

I have come across a blog post where the author states that “discount vouchers will destroy affiliate marketing” because consumers look for discount coupons “at the point of sale” and “not while researching retailers.” To support the claim (at least partially) the Father of Advertising, David Ogilvy, is quoted, who wrote in his “Confessions of an Advertising Man”:

A steady diet of price-off promotions lowers the esteem in which the consumer holds the product: can anything which is always sold at a discount be desirable?

I think it would be just to make an observation that the context in which Ogilvy spoke of “price-off promotions” was that of building “brand personality” — “the sharply defined” one, with the purpose of getting “the largest share of the market at the highest profit.” He warned of spending advertising funds shortsightedly (on promotions only), to the point “that there is no money left for advertising” and real brand building. Ogilvy was a proponent of building long-term marketing initiatives that are based on “brand image”. He was not anti-coupon altogether. He acknowledged that coupons and promotions can be effective when used properly — as “mini-ads, complete with brand name, promise and a miniature photograph of your product” (Ogilvy on Advertising, 1985, p. 146).

We could certainly also mention the fact that “much of the early academic research into promotions produced very critical appraisals of their effectiveness,” viewing coupons as “short-term, tactical tools, often added into the marketing mix of struggling brands to boost sales.” And we could definitely point to the fact that such research was, in fact, flawed “by ignoring the indirect effects of promotions, and by taking a very narrow view of consumer response,” neglecting the positive effect that promotions can have on the “brand’s sales, awareness levels and image,” strengthening “brand positioning”, conquering new markets, etc. (cf.: Baker, 2003, The Marketing Book. pp. 479-481) However, I do not want to go any further into this.

What I would really like to hear is what you, the readers of my blog, think about coupons and coupon affiliates. Is this a value added strategy for merchants? Are couponers helping the affiliate marketing industry, hurting it, or is it neither of these, and they are merely coexisting with other types of affiliates?

A recent study by Platform-A and IRI reported that “more than 90 million consumers (78% of retail shoppers) currently use newspaper coupons” and “nearly four out of every 10 shoppers – a total of 40 million consumers – would be very likely to use coupons accessed online.” At about the same time, Coupons.com has reported that $57m worth of coupons were printed on its website only in the course of March, which amounted to a “192% increase over the last year” [source]. Needless to say that the current state of the economy is helping online couponers. As the Voice of America website has put it today, “coupons are hot when every penny counts.”

If you have any thoughts on the subject, I’d certainly love to hear them, and you may post them them as comments below.

About Geno Prussakov

CEO & Founder of AM Navigator – an award-winning OPM agency. Founder & Chair of Affiliate Management Days conference. Author of bestselling "A Practical Guide to Affiliate Marketing" (2007) and "Affiliate Program Management: An Hour a Day" (2011), speaker, consultant, and affiliate marketing evangelist.

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7 Responses to “Will Coupons Destroy or Save Affiliate Marketing?”

  1. Rhianna says:

    Coupon affiliates can coexist on the Web along with other affiliates. Neither coupons nor coupon affiliates will destroy affiliate marketing.
    Some consumers will hunt for coupons just prior to the point of sale, but many will just complete the transaction to save time. Not every customer wishes to hunt around the web and fiddle with search engines for a coupon.

    Content affiliates can thwart loosing the credit to a coupon affiliate by placing a coupon adjacent to a product link and product description. A focus on the desired product with a coupon will clinch the deal just as the cherry on top of an ice cream sundae completes the total dessert.

  2. Geno,

    I did actually wrote an article about Discount Coupons in affiliate marketing

    Here is a preview:

    “I would say we should discuss 2 situations:

    * The visitor is strongly considering buying the product from the producer site. He then searches for discounts and buys from an affiliate. Is this a clear case of paying an affiliate for a sale you would anyway do? Well, first of all, even if the visitor on your site is considering to buy, it doesn’t mean he doesn’t have 2-3 other competitor sites opened and he compares products and prices. And if he searches and finds one of your coupons, then this just might be your chance to make the sale against the other 2-3 sites.

    * Second, how many times you had doubts over paying for a product, especially now in these tough times? How many times you thought: yeah, I would love to have this product, but I’d better wait? So if your site visitor is looking for a coupon and gets it from an affiliate, maybe this is all he needs to make up his mind.”

  3. Very well written. This is the kind of information that is useful to those want to increase their SERP’s. Keep up the good work.

  4. Ken Cheung says:

    Hi Geno (big fan of your blog),

    Speaking from an agency affiliate manager, there’s really two issues here:

    1. Affiliates who don’t use VCs vs. voucher code sites – strong case for value-based commission attribution here.

    2. (the more significant one) The perception that VCs are a sin, I completely agree that VC can and should be used tactically, and indeed this is what we encourage our clients to do, however, one has to consider how a brand might perceive this, at the end of the day, with every VC released consumers are that much more likely to search for ‘brand+vocher code’; it also kills a brands margins and lastly, over here in the UK, VC sites dominate the affiliate market, they amount to the top 10 affiliates on most campaigns, on this basis, it’ll soon become voucher code marketing rather than affiliate marketing…

    sure you can say the economy and consumers demand codes, but how do you justify this to merchants who already have the perception that codes are non-kosher?

  5. Geno says:

    Ken, thank you for your comment, and for your kind words about my blog.

    1) I don’t see why “affiliates who don’t use VCs” have one good reason for not using them. A coupon frequently helps close the deal, and regardless of the primary marketing method used by an affiliate, they can only enhance their conversions by adding a merchant’s coupon here and there.

    2) As for your second point, I think that with a proper coupon policy a merchant can greatly benefit from coupons (or voucher codes), and doesn’t have to sacrifice their profit margins at ll. After all, coupons can be product- or category-specific, or one can offer free shipping over a certain order amount, or some other deal that is enticing, and moves the consumer towards that order.

  6. Kelli says:

    I am only learning about affiliates and advertising- but as a “professional consumer” I can tell you that although I had never had much interest in coupons before – I certainly do now. I have a wide-spread contact list for a lil ‘ole homeschool mom & there is a whole lot of interest being generated when people can save money these days.
    If there is a product that I love next to a similar product that I can get a decent discount on- guess which one is coming home with me? Not only will I try the new product but I will tell others about it- seems like a win win on the coupons!

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