The concept of a company sharing revenue with people who drive customers to that business is certainly not a new idea. Paying commissions has a long history.
An online version of this concept, dubbed affiliate marketing, began two decades ago. The term typically refers to a relationship in which an affiliate—usually a website publisher—advertises a merchant’s products or services and is paid for results: sales.
Businesses customarily use promotions, such as discounts or freebies, as part of these affiliate-marketing deals to entice consumers to make a purchase. Since the transactions are electronic, the purchases, deals, and affiliate involvement are recorded immediately.
Online marketers have looked at various ways to expand to offline sales, such as paper or electronic coupons and loyalty cards to draw customers to stores. One of the latest companies to link online with offline is Yub, a spinoff from TrialPay, which is an online payment and promotions platform. Yub allows brick-and-mortar restaurants and retailers to link with consumers and track buyers from their online clicks at affiliate marketers’ websites to actual purchases.
Alex Rampell, a founder and chief executive of TrialPay and Yub, explains the company is bridging the gap between affiliate marketing and offline businesses.
“I buy coffee, go bowling, eat out,” he says. “I wondered how TrialPay could work with physical restaurants or stores. Could we build offline what we have online?”
Yub—that’s “buy” backwards, a sly nod to its offline efforts in an online universe—is one of several companies that hope to entice Web-using consumers to conventional stores. Both Foursquare and Shopkick use mobile technology to connect millions of users with physical restaurants and retailers, and provide rewards for purchases made. But Yub works completely within the affiliate marketing space, taking advantage of an industry that is expected to generate more than $4 billion in online sales this year, according to a Forrester Research report.
“It’s definitely still a growing industry,” says Murray Newlands, a consultant who formerly ran affiliate networks and advises American and British companies on social media. “The size and scope continue to increase.”
Newlands says affiliates already promote offline sales by providing vouchers with bar codes, allowing all parties in the sale to be recognized and credited fairly quickly. The key to Yub, however, is directly tying credit card purchases with online promotions.
“We knew we could build an offline affiliate program if we could see the credit card transactions,” Rampell says. With that data, Yub is able to recognize a specific purchase and instantly complete any promotion established by the merchant with an affiliate.
Getting access to the credit card streams of Visa, MasterCard, and others was not easy, he recalls, and TrialPay spent years building those relationships.
Here’s how Yub works:
A restaurant company places a promotion or offer online through its existing digital presence, such as Facebook, Twitter, or Google. Using Yub’s tools and access to some 10,000 online and mobile publishers, the restaurant can create its own affiliate network of online content, deals, and loyalty sites to plug offers.
“We sit in the middle of affiliates and the restaurant,” Rampell says. “We’re the platform that allows the two parties to work together.”
No technology integration by the restaurant is necessary, and campaigns can be created without training employees, creating loyalty cards, or printing coupons. Another benefit is that operators can measure the impact of online campaigns on physical store sales.
Yub has assisted several full-service restaurant entities with affiliate marketing programs—for instance, a three-week campaign with Denny’s last summer linked restaurant sales to rewards. The promotion popped up as a company logo on social gaming and e-commerce sites, and those who clicked on the link and watched a video were offered game currency or a gift if they spent $5 at Denny’s using a credit card linked to the game or website.
“The trial yielded a really positive return on investment and return on ad spend,” says Veronica Barbatelli, a media planner for Optimedia, Denny’s digital agency. “Yub was able to close the loop on tracking online-to-offline conversion, which is really important.”
The return on the amount spent to advertise was about 200 percent, she says, and 5,500 diners took up the offer.
“We were targeting Millennial families with kids, so [the promotion] was skewed to moms and families” with parents 18 to 34 years of age, Barbatelli adds. About 60 percent of those who visited a Denny’s restaurant accepted the offer from a Facebook game.
There were good data and analytics provided by Yub after the campaign, she notes. “It was interesting to learn behaviorally how users interacted with the offer. And we discovered the offer’s average ticket spend was higher than Denny’s daily average.”
Denny’s isn’t the only company to find value in Yub, which was launched as a separate entity in November with the aid of $12 million in investor funding. At year-end, veteran dot-com business Coupons.com bought the startup for a reported $30 million.
Coupons.com, one of the world’s largest printable coupon companies, says it plans to use its scale, affiliate network reach, and merchant base to grow the fledgling business.