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Ibotta Extends in-App Purchase Affiliate Revenue to Reward Users of E-Commerce Apps

Gabe Kwakyi | September 8, 2016

Feature Image Credit: Ibotta

Ibotta, the shopping app that rewards users for making purchases is now launching an affiliate business model for driving purchases in apps, expanding beyond websites and real-world commerce.

Ibotta's affiliate system links users to apps where they can make a purchase, then rewards those users with rebates and cash back.

The technology behind Ibotta's new in-app affiliate system is powered by deep linking pioneer, Button, which supports merchant apps such as Uber or Groupon in enabling users to purchase their goods or services from a deep linked publisher app such as the New York Times. The merchant app receives a new user and the publisher app receives a fee in exchange for sending the merchant new business as an affiliate.

In general, the affiliate model is a highly successful method of user acquisition because the advertiser pays a fixed fee or percentage of revenue generated only when they receive value from users, creating a win-win situation for acquiring new customers (however most affiliates require sufficient proof that the advertiser can actually convert users before running a large campaign). Paying to acquire new installs doesn't necessarily translate into a purchase, so advertising by CPM, CPC or CPI is less desirable than running an affiliate campaign. Even with manual or average bid CPE (cost per post-install event) campaigns, there is no option to encourage publishers to push higher value purchases by revenue-sharing as affiliate campaigns often do.

Ibotta's implementation extends Button's affiliate model beyond just rewarding the publisher to reward the end-user as well, which stands to increase the number of people using Ibotta and thus the desirability for advertisers to join Ibotta's affiliate network. This is a similar model to the double sided referral programs used by companies such as Airbnb, Spotify, Dropbox and Chase.

Ibotta's affiliate program also introduces the concept of a variable reward system, allowing advertisers to pay Ibotta or the end-user more for purchases by specific user segments, such as brand new users or users whom the advertiser knows are likely to be more valuable, such as a propensity for repeat purchases, referring new users or spending more than the average user.

The Bottom Line: Ibotta's double-sided affiliate model paves the way for more effective methods of app-based affiliate marketing; affiliate programs are one of the most popular methods for driving revenue for websites and represent an alternative to app install campaigns, which are experiencing significant cost inflation.

Original Source: Grow.co reporting on Marketing Land's "Ibotta launches "first app-to-app affiliate program."