O2O: Empyr’s Online-to-Offline Blog


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Card-Linked Offers - Brick & Mortar’s New BFF?

The customer loyalty space has evolved over the last few years from predominantly coupon driven rewards to including card-linking offers (CLO) embraced by the online-to-offline (O2O) industry. Card-linked offers enable consumers to receive a discount or cash back automatically when they pay with a debit or credit card that has been linked to an offer. Increasingly large national brands and SMBs are adopting the card-linking approach to connect online offers with in-store purchases.

From Coupon Clipping to Card-Linking
Promo codes, paper and digital coupons have been moderately successful at increasing sales and average order value. They have been a tried vehicle for generating brand loyalty and improving overall revenue. However, the benefits of card-linking is that it’s completely hassle-free. Customers do not have to cut or print coupons. There is no need to load coupon apps to get the rewards and the consumer does not have to mail-in rebates. With card-linking you are still getting all of the incredible benefits of coupons but it’s an effortless process for the customer at checkout. Consumers just link their credit or debit card with a publisher that promotes the offer, and they get automatic cash back when they pay at the store without the retailer needing to jump through any integration hoops. Card-linking successfully answers consumer’s coupon concerns…

Measuring Digital Marketing ROI
The coupon process includes the added annoyance of generating promo codes and training retail staff about the loyalty offers. Marketers have also been left guessing when it comes to measurable ROI of their digital advertising spend. To quote department store magnate, John Wanamaker’ “Half the money I spend on advertising is wasted; the trouble is, I don't know which half.” Card-linked offers tie the knot between online and offline shopping. Marketers now can track online advertising to offline purchases.

Consumers know how coupons work. But card-linked offers successfully get around the challenges like last click attribution that exist with clip or code coupons. It has been difficult to draw a detailed correlation between the efforts of the publisher and that of the marketer to attribute fair compensation in the coupon process. Card-linking alleviates these pain points.

Why is it Still Important to Focus on In-Store and Brick and Mortar Commerce?
Physical stores still remain the foundation of retail and 90% of all retail sales are transacted in-store according to  AT Kearney’s Omnichannel Shopping Preference Study. It goes on to say that “brick and mortar” remains the customers preferred shopping channel as the physical store provides the ability to touch products and engage with sales staff. A whopping 95% of retail sales are still captured by physical stores. However, 80% of those consumers are on their mobiles while in the physical store - led there thanks to a great deal seen online.

Digital marketing influenced more than half of in-store retail sales in the US in 2016, to the tune of $2.1 trillion (Deloitte). And that’s only retail. The total O2O opportunity is estimated to be more than $4 trillion. Despite digital’s proven ability to influence in-store sales, there remains a gap in tracking and reporting this performance.

Card-linking and O2O Industry Revelations
Recently the CardLinx Association released their annual report Card-Linking and O2O Industry Survey. The study revealed how the card-linking and O2O industry will continue to gather momentum and dominate the customer loyalty space.

Some highlights of the survey:

  • 51% of the participants asserted that card-linking programs would definitely be a catalyst for bringing consumers back into shopping centers.

  • Card-linked offers advertised online catch shoppers attention and motivates them to go to the store, where their purchases are then tracked with crucial O2O technology.

  • 98% of the survey participants affirmed that they will continue using card-linked marketing or loyalty campaigns in the next 12 months.

  • 95% of the survey participants declared their participation in the O2O commerce industry in 2017.

  • Survey participant offering loyalty points as the reward have grown from 12% in 2016 to 20% in 2017.

  • An O2O feature that has found resonance with millennials is to use the rewards gained to benefit socially responsible businesses and nonprofit organizations.

The survey findings reveal an optimistic outlook that O2O technology will help to revive in-store traffic in 2017.

The Future of Card-Linked Offers
Card-linking means no more printing coupons. You don’t have to make a purchase immediately online to get the promo code but can go in-store at any time to redeem the offer. The offers taken up by consumers can be instantly tracked back to the referring publisher so they are able to register the transaction. This leads to advertiser’s being in a better position to negotiate better shelf space with the retailer based on their ability to drive customers into the store. Win-win for everyone.

As card-linking continues to grow, the industry is expanding and diversifying, entering new industries and merchant categories. The results of the survey show card-linking at its tipping point, with more traditional retailers starting to complement their traditional digital marketing channels with card-linked technology to drive in-store sales. It will be interesting to see how new technologies will shape and advance this industry.

We’d love to hear your thoughts on how you think card-linking will impact the loyalty rewards space. Are you currently looking into card-linked offers? Drop us a comment or contact us here. We’re curious about what you think.

Sources:
http://www.cardlinx.org/wp-content/uploads/2017/05/2017-clannualsurveyresults.pdf
http://www.creditcards.com/credit-card-news/card-linked-offers.php
https://www.forbes.com/sites/moneybuilder/2013/04/02/six-reasons-why-card-linked-offers-are-replacing-daily-deals-in-2013/#b00eb393e26c
http://blog.thanx.com/card-linked-offers-technology-growing-with-momentum
https://www.pepperjam.com/blog/benefits-of-card-linked-offers

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Introducing CPR — Welcoming a New Member to The Online Advertising Family

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Introducing CPR — Welcoming a New Member to The Online Advertising Family

Last week, we launched CPR™, a cost-per-revenue marketing platform that redefines online-to-offline (O2O) performance marketing. With 100% attribution of in-store sales generated from online ads, CPR takes the guesswork out of calculating advertising ROI.

How Does CPR Work?
CPR stands for Cost-Per-Revenue and that means an advertiser only pays for in-store revenue that is generated by the ads. With CPR, advertisers never pay for the clicks and impressions. The key ingredient here, and why it’s possible, is card-linked technology. Through card-linked technology, Empyr’s CPR platform can track real-time debit and credit card transactions (i.e., sales) without any POS integration or staff involvement.

Let’s assume I’m the director of marketing for an automotive maintenance business and launch a CPR campaign with the goal to drive more consumers in my stores. Here is a step by step process:

  1. First, I create an offer. My offer is Get 10% Cash Back On All Oil Changes and I advertise it online (there is a plethora of sites and apps where advertisers can buy CPR campaigns, including Yelp, Coupons.com, Swagbucks etc.).
  2. Consumer sees the offer online, links any debit or credit card, visits the store, and gets an oil change.
  3. Consumer pays with their linked card and gets an instant cash back notification. No coupon or QR codes required, it all happens behind the scenes.
  4. As the advertiser, I only pay a fee when an in-store sale happens. The fee is shared between the consumer (in the form of cash back), publisher (website or app where the consumer saw the offer and linked a card) and Empyr.

And, that’s how CPR works, it’s just that simple.

Top 3 benefits of CPR

  • Reach 100+ million consumers when they use their favorite websites and apps but only pay a fee when they visit your store and buy something
  • The whole program is automatic meaning there are no keywords to manage, no marketing material to create, no staff training, no POS integration, no hassle, period.
  • The holy grail of digital marketing reporting. You’ll see how many online impressions you got, how many of those people bought from you and exactly what they spent, down to every single transaction. Not only that but you’ll also be able to see incremental lift in spend, for example if you ran a campaign in Q1 2017, you can see what that same customer cohort spent in Q1 2016 before you ran your CPR campaign.

CPR’s Role in a Growing Mix of Digital Marketing Options
CPR is not here to replace any of the established members of the digital advertising family. Quite the contrary. CPR is another tool in a marketer’s arsenal and nicely complements the family when integrated into an overall digital marketing strategy. When planning what inventory to purchase, advertisers must take into consideration the product being advertised, target audience, and campaign goals. To better understand how CPR fits into the digital marketing mix, let’s take a look at how other members of the advertising family got their start...

CPM - Cost-Per-Mille
CPM is a common way for pricing online ads and it has existed since the dawn of online advertising. It was in October 1994 when Hotwired (Wired Magazine) introduced a new monetization concept to pay their writers. The team at Hotwired created special sections on their website for banners to be displayed and sell placements to advertisers. And, that’s when the term ‘banner advertising’ was born.

One of the first companies to buy ads on Hotwired was AT&T. AT&T paid Hotwired $30,000 for a 3-month campaign, and the first AT&T ad had a whopping 44% click-through rate (CTR). To put that in perspective, the average CTR on display ads across all formats today is closer to 0.05%. CPM became widespread around 1995 when it was adopted by Netscape and Infoseek. It eventually became the defacto standard pricing model for display advertising when DoubleClick, acquired by Google in 2008, adopted it. 

CPC - Cost-Per-Click
CPC or PPC (pay-per-click) is commonly used by search engines to generate revenue by monetizing their search traffic through keyword bidding. By the late 1990s, the online advertising industry had already reached $1 billion and the number of websites had increased to new heights. It was during this time when search engines like AltaVista and Lycos introduced services that helped users find their way around the internet.

In 1998, Bill Gross, founder of GoTo.com, pioneered an early form of the CPC pricing model in an attempt to make internet advertising more effective. Goto.com later became Overture and eventually got acquired by Yahoo. This was around the same time that Google launched its search engine (1999) but its advertising pricing was all based on CPM and CPC wasn’t included until later in 2002. Today, Bill Gross is widely credited as the inventor of the CPC model while Google simply adapted and perfected it.

CPA - Cost-Per-Acquisition
The CPA format (a form of performance marketing) used by most affiliate marketers can be very appealing as there is relatively little risk involved for the advertiser. In the early days, performance marketing models such as CPA faced serious challenges and lost advertisers’ trust due the lack of transparency, unreliable data and widespread fraud. Probably one of the most prominent examples is eBay that paid out an affiliate marketer $35 million for false online sales.

Since its inception in 1994, CPA has come a long way. It has overcome shortfalls such as fraud and poor analytics, to eventually introducing innovative technologies such as online attribution and targeting.

One Big Happy Advertising Family
Today’s expanded family of complementary advertising models -- CPM, CPC, CPA and now, CPR -- makes it possible to build a finely tuned digital advertising strategy, aligning each format’s strengths with your campaign goals and your media budget. And because CPR allows you to measure your advertising performance at the point of sale, you’ll be better able to plan future ad spending, benefiting your overall advertising mix.

For questions about CPR or how to get started, visit https://www.empyr.com/advertiser#pay-per-sale.

 

Sources:
Adpushup Blog - The History of Online Advertising
Marketing Land - Pay Per What? Choosing Pricing Models In Digital Advertising
HubSpot - A Brief History of Online Advertising
Get Cake Blog: The Evolution of Affiliate and Digital Marketing
The Daily Dot - eBay’s top affiliate marketers busted for $35 million scam

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2016 is the year card linked marketing programs quietly hit critical mass.

If you weren't paying close attention you may have missed that some of the largest websites and apps on the planet have launched or are working on card linked programs from Facebook to Uber to Microsoft.  We here at Empyr power many of these programs and are happy to announce a handful of new partnerships.  Before I announce them I'd like to take a moment to explain why card linked programs are hitting critical mass.

So why all the fuss around card linking?  It comes down to a simple premise, websites and apps are constantly searching for the best way to monetize their user base without detracting from the great user experience they provide which got them the users in the first place.  Card linked programs do exactly that, they help provide a new revenue stream and they provide a new frictionless  benefit to users that make them more engaged and loyal.

Let me explain how it works.  Websites and apps are using Empyr's API to give their users access to offline offers like 10% cash back at a restaurant.  To get the offer consumers link up any credit or debit card to the website/app (using Empyr's API) and the consumer simply pays with that card.  Instantly the consumer earns cash back or points and the website/app earns a commission on the sale, both paid by the merchant in return for the customer they received.  

This is a win win win ecosystem without friction which is why it's gaining serious momentum.  Behind the scenes of all of this is Empyr, powering the card linked tracking and providing thousands of participating merchants so the program is plug and play for websites and apps to start generating serious revenue on day 1.  Just how serious is the revenue opportunity?  Glad you asked, we built a revenue calculator so you can know exactly what you can earn with Empyr here.

Without further ado here are the latest partners to join the Empyr platform.  I encourage you to check out each one to see the various ways you can build a card link program, there are straight forward cash back programs as well as points based loyalty programs.   With the Emyr API there's unlimited ways to connect your online consumers to offline businesses and tap into the $4.5 trillion dollars spent every year offline. 

LivingSocial’s Restaurants Plus - https://www.livingsocial.com/restaurants-plus-rewards

Coupons.com’s Card Linked Offers - https://www.coupons.com/card-linked-offers/

Swagbucks’ Local App - http://blog.swagbucks.com/2016/03/introducing-swagbucks-local.html

Microsoft's Earn - https://earn.microsoft.com/

If you have a website or app with over 1 million monthly users contact us here to learn how you can start capitalizing on online to offline commerce with Empyr.

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Connecting Dots in the Path to Purchase. Jon Carder talks Revenue Generation from O2O Commerce

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Connecting Dots in the Path to Purchase. Jon Carder talks Revenue Generation from O2O Commerce

"One of the great ironies about the mobile revolution has been that while digital ad impressions are easy to track, using that data to determine mobile ads’ efficacy has proven a challenge. Many brand marketers are still left wondering how much retail lift the ads actually achieve — and as a result they are perhaps a little more conservative with their budgets than if they could see the direct relationship. A number of companies in the local space have spent the last couple of years working on this attribution problem, and some believe their efforts are starting to come to fruition."

Read more at StreetFight

Watch Jon Carder speak about revenue generation from online to offline commerce:

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The formula to create a trillion dollar Online to Offline industry

The unfulfilled promises of online to offline have left us all a bit deflated. It seemed like such a perfect fit, everyone is online and 93% of commerce is still offline, just connect the two worlds and a massive O2O industry will be born! We've heard this message at every conference since Hootie and the Blowfish were actually popular. So why hasn't this taken off; what's the holdup?

In order to understand what has gone wrong you have to understand the three core elements that need to be done right in order to create a massive O2O industry.

  1. The offer - Something that motivates consumers to make a purchase at an offline business.

  2. The Tracking - How the consumer redeems the offer and how the offline business tracks where it originated from.

  3. The Monetization - How online companies make money by driving consumers to offline businesses.
     

The Offer:

Groupon and LivingSocial almost cracked the code of O2O. They were so close you could taste it, and boy did the copy cats come out in droves. The fact that Google, Facebook, Amazon, Yelp and thousands of other online companies all started a daily deal website in the same year is unprecedented. The O2O gold rush had begun! You could smell the greed in the air, and it topped out with Groupon’s $20B public valuation just 3 years after launch, making Groupon the fastest growing business in history. But today Groupon is worth less than 10% of that value ($1.75 billion as of 1/10/16) and there is a graveyard full of failed daily deal sites. So what happened? They screwed up the offer.

Daily deal sites frequently used a 50% off offer. That motivated online consumers by the truckload but wasn't sustainable for the offline businesses. The offer has to walk a fine line of motivational for consumers and sustainable for businesses. Daily deals were like a "steroid" pumping up businesses fast but then leaving them with a small... um... number of returning customers. What actually works is an "exercise program", like a 10-20% offer that won't drive in as many consumers but will ensure the business has a sustainable marketing source.  

 

The Tracking:

Most tracking solutions to connect the online world to the offline world didn't gain traction because they have friction that prevents them from becoming ubiquitous. By friction, I mean anything that requires additional behaviors for either the online consumer (showing a coupon, scanning a QR code, checking in etc.) or the offline business (installing new hardware, modifying their POS system, or training their staff on a new app).

Daily deals had heavy friction in their tracking because they used the old fashioned coupon.  Even in a digital form, coupons have friction because the consumer has to show the coupon to the staff, which can get awkward on a business lunch or Tinder date. Coupons also require friction on the business owner's part to track the coupons and train staff how to redeem them.   

The reason this friction didn't stop daily deals is because the "juice was worth the squeeze".  Consumers and businesses alike will put up with friction as long as the reward is worth the pain the friction caused. The higher the reward, the more friction people will put up with. In the case of daily deals the promise of thousands of new customers was enough for businesses to deal with the hassle of coupons, and for consumers the 50% offer was so compelling that they didn't mind using a coupon. But once you bring the offer into a more sustainable place like 10-20% off, suddenly the friction needs to be less or consumers just won't bite.  

Thankfully there are new technologies and data emerging that can remove the friction. Here at Empyr we have formed a direct partnership with Visa, MasterCard, and American Express so the offline transaction can be tracked using what we all already use to pay, any debit or credit card. This makes it frictionless for both consumers and businesses. Adios friction!

 

The monetization:

The last piece is pretty simple, you need to create a way for online companies to make money by marketing offline offers. Daily deals monetization strategy paid out about 25% of the purchase price to the online company that marketed the offline offer. This was very compelling and is the reason why just about every consumer-facing internet company on the planet jumped into daily deals.

Here at Empyr we've created a similar monetization opportunity for O2O except this time the revenue share is more sustainable. The way it works is simple; offline businesses share a portion of the revenue they generate from a sale (usually around 10%) with the online company that drove in that sale. It's a Pay Per Sale model for offline businesses and it's a big revenue generator for the online companies because they make money on every offline purchase.  Unlike daily deals, Empyr offers are always on, so the online companies that promote these offers make less than a daily deal in the short term but more in the long term, again like an exercise program rather than a steroid.

So just how big is this monetization opportunity?  According to the US Chamber of Commerce, 93% of all commerce is offline, or $4.5 trillion dollars per year.

 

The formula

In summary, the formula for a trillion dollar O2O industry is:

  1. A compelling offer for consumers that is sustainable for businesses, such as 10-20%

  2. A frictionless way to track the offline purchases, such as using credit/debit card tracking

  3. A huge monetization opportunity to attract online companies who promote the offers

In a nutshell this is what we do at Empyr and why the time is finally here to build a large, sustainable online to offline industry.

 

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