The Battle for Middle Earth: A Performance Marketer’s Guide to the Affiliate Channel’s Savings Space

Given my deep experience in performance marketing on both the advertiser and publisher sides, I have been asked several times to break down the savings-oriented publishers in the savings space by different stakeholders: advertisers/merchants, publishers/affiliates, solution providers, private equity and venture capital investors, investment bankers, research analysts, etc. So rather than continue to repeat myself hundreds of times, I thought I would create the following reference from the perspective of a performance marketer. I could write a book on this given all the nuances in the deals and coupons space, but I have summarized the high-level points. Sometimes I hear marketers lump  deals and coupons sites into one giant bucket but there are actually major nuances and differences with that bucket and it falls into 4 buckets.

There are four major segments or “kingdoms” in the savings space in the U.S. Ever since 2009, the kings/queens of each kingdom were very clear. But in the past decade, the lines have blurred as each king wants to expand and conquer other kingdoms. That so-called “Battle for Middle Earth” has been raging amongst the kings. The past decade has also seen new, emerging leaders trying to take over one or multiple kingdoms with special weapons like browser extensions or white-label coupon platforms.

What are the four segments say ye?

1. Product Specific Deals: discounts on specific products.
2. Retail Coupons: store-wide, site-wide and/ or category coupons.
3. Grocery Coupons: retailer or consumer packaged goods (CPG) coupons on products sold at grocery and drug stores. 
4. Loyalty/Rewards: cashback and rewards programs on sale and non-sale items

All four leaders dominate their space for specific reasons which will be discussed. Now the leaders are all expanding into the other kingdoms and the Battle for Middle Earth has begun. And it’s important to note from a performance marketer’s perspective because there are clear differences between these kingdoms and publishers based on your goals.  Understanding those differences better will help you formulate the right marketing mix within your affiliate channel.

As a performance marketer, you are tasked to sell your company’s products and services. f you have any promotion whether a specific item on sale or a bundle, then you want to work with product-specific deal sites that can help accelerate the sales of new product to drive momentum or maybe sell more of a mid to end-of-life product line to liquidate inventory to minimize carrying costs and make way for new items to sell in the warehouse.

If your company offers coupons and promo codes, then you’ll likely want to distribute through retail coupons-oriented sites and if your product/service is more around grocery or consumer packaged goods (CPG) then you may want to work through grocery coupon-oriented sites.

Another way to drive more sales is working with cashback/rewards sites for those items on sale. A cashback/rewards site may require a higher commission rate so they have the margin to pay usually 50-75% of that commission rate to the user. One advantage of working with cashback/reward sites is that they can also drive sales of non-sale items at retail price because that 5% cash back, for example, is enough of a carrot for the user to buy a full-priceproduct.

The following summaries provide a little more detail about which publishers you should have in your affiliate marketing mix depending on your situation. Most of the publishers have expanded to other kingdoms to offer all the savings opportunities possible but each have its focus and strength in one of the kingdoms.

Kingdom #1: Product-Specific Deals