How We Choose the Vertical: Analyzing Consumer Behavior

19 December 2022
Reading: 8 min

Many affiliates value the niche they work in to an extent when they avoid testing any other vertical. But affiliate marketing is all about diversity: it mostly comes from the combination of GEO and niche. We will talk about the latter in today’s article. Why do affiliate marketers decide to drive traffic to nutra or gambling? What influences the choice of the niche? Let’s do some research.

P.S. If the phrase affiliate marketing verticals doesn’t ring a bell for you, you’re probably new to the field. We encourage your interest, but first, we suggest you read one of our previous articles on the basics of affiliate marketing.

The affiliate market is like many others in the global economic system and is driven by the same laws. Psychology and consumer behavior patterns play a big role there, especially in choosing one vertical over another. The funny thing is that this is relevant both for the affiliate and for the target user. However, these two players on the affiliate marketing field have very different reasons for their choice. It all depends on their objectives.

How We Choose the Vertical: Analyzing Consumer Behavior

Affiliate marketers and media buyers

Think back to yourself on the verge of the next campaign. What is the first thing you pay attention to when choosing a vertical? It doesn’t take a great wizard to read your mind and realize that each time it’s different. Contextuality is a characteristic trait of media buyers as consumers of affiliate marketing services. This is because the traffic market is highly volatile, and it is important to be flexible and adapt to the immediate demands of the target audience. 

But still, there is something permanent here. When you are just starting out in affiliate marketing, you have a clear goal — to make a profit. To do this, you do everything you can to provoke users to take targeted action and generate leads. In addition to this, professionals also aim to build a reputation in the market, to associate with clients with high quality. 

How We Choose the Vertical: Analyzing Consumer Behavior

So you have one or several of these three end goals in an advertising campaign. Now we need to evaluate all the variables in the success formula to achieve these goals. We suggest focusing on the following metrics of a changing market:

  1. Price. Imagine, a user is surfing the Net when suddenly he comes across an advertisement that can solve his problem (or pain point). The user is interested and clicks on the ad, ends up on a high-quality landing page, and is preparing to finalize the purchase. What can change his mind? It’s the price! To avoid interrupting the lead generation process at its climax, try to efficiently assess the buying power of your target audience. For example, in a Tier-1 country (for example, France or Great Britain), a €40 price tag for a male enhancement product would be rather competitive. But for users from Indonesia or Belarus, such a price will seem excessive, and they will never buy the product.
  2. Seasonality. Many media buying professionals consider seasonality to be a fundamental factor when choosing a vertical to work with. Different groups of buyers often have the same needs at certain time intervals, depending on the season or specific events. If you analyze this pattern, you will be able to anticipate demand and drive traffic on those verticals that are predictably profitable at the time.
    In fact, there are some important subtleties concerning seasonality. For example, the difference between seasonality, eventuality, and real-time marketing models. Read more about all the nuances in our article.
  3. GEO. Sometimes when we look at the offer description, we can see estimated performance bordering on fantasy. But when we launch it, the situation looks different. Have we been cheated? Not really. Many affiliate programs provide a decent selection of GEOs under one offer. But while let’s say in Romania weight loss vitamins are in high demand, in Austria the buying activity for this product can be very low. At the same time, under the offer, we see average figures, based on which we shouldn’t build up inflated expectations.
    Keep in mind that if you want to choose an offer that will sell to a country other than your own, it is important to know and use a foreign language in your ads. Also, don’t forget that the cost of traffic may vary from region to region, and you need to be prepared for that too.
  4. Competition. Popular offers guarantee attractive terms, but the competition is usually too high. If you take into account the limited GEO and the giant budgets of the segment leaders, you get a bunch of competitors you can’t beat unless you wait until their interest in a particular offer dies down. But in that case, you shouldn’t expect high ROI.
    What can be the way out? Firstly, it is important to look at the search engine results and analyze the data. Simply enter the keyword into the search and see how popular the product is and what promotional tactics (discounts/bonuses) are offered to the customers. This way, you can see if you have enough capacity to compete with other affiliates and media-buying teams. Secondly, pay attention to offers that are just gaining popularity. The market is developing, and some niches are not yet full, so catch the wave.

Playing on emotions

Affiliate networks have a slew of niches, each with its own value proposition and price range. Expensive purchases are usually put off, and it takes a long time to decide whether to buy now or to buy at all. Emotionally, people find it harder to part with a large sum of money than with a small one, even if the purchase will disappoint them (say hi to AliExpress binge buying). Your task is to select those products that trigger an emotional impulse — the so-called “on-the-spot decision”. Such purchases are triggered by the wow effect that solves the actual problem of a large part of the population.

How We Choose the Vertical: Analyzing Consumer Behavior

Target audience

Now we know where affiliates stand in the bigger scheme of things. Now let’s discuss what is happening on the other side of the market, i.e. in the consumer’s mind. Very often, users are driven by some sort of “pain point”. This phrase usually refers to a problem that the customer is trying to solve with your product. To identify your target audience’s pain points, answer 2 questions:

Question No.1 Why do people need this product or service?

Question No.2 Who cares about this reason?

Pain is associated with something negative, but the consumer does not always come to you for a solution of their problem. Sometimes they are driven by other needs. These needs can be divided into three groups:

  • Conscious. When there is a problem and the solution is known. There is a need to eat — a person orders food delivery or goes to a grocery shop;
  • Unconscious. There is a problem, but its solution is unknown. Or it exists but leaves much to be desired. Often the problem is low awareness of one’s capacity to meet the need.
  • Hidden. At first glance, there is no problem at all. However, when a solution appears, it turns out that there was a problem, but no one knew about it.

So what are the needs that drive the users? If we take them apart according to the principles of Abraham Maslow’s pyramid of needs, as many marketers recommend, we get the following picture:

Level of survival. This includes basic physiological needs.

  • Security. This includes the antivirus vertical. People worry about the security of their devices and the security of their personal data.
  • Beauty and health. The nutra vertical works with this need. Drugs to treat specific illnesses, vitamins, and supplements for prevention, or cosmetics to maintain youthfulness all satisfy the need to be in good physical condition.
  • Sexual desire. Yes, yes, we’re talking about the adult vertical. It is what allows users to satisfy a basic need for sexual relations.
  • Material needs. Shopping has different purposes, but for the most part, e-commerce satisfies the need for material goods.

Level of belonging. It’s about being a part of some groups or pairs.

  • Love. The dating vertical works with this need, which provides users with simulated romantic relationships, flirting, and communicating with the opposite sex.

Level of recognition. This is based on seeking respect from the community. 

  • Winnings and successful budget increases. Betting, gambling, and sweepstakes verticals help users catch their luck and increase their monetary contribution through different strategies. 
  • Gaming. Games of all kinds focus on achieving results, whether it’s completing a mission or battling an opponent. In addition, games are popular for grading results in the form of a tournament table or ranking, giving users a competitive spirit and motivation to get better for the recognition of fellow players.

Level of self-development. This includes any means of progression.

  • Education. The education vertical helps to meet the need for new knowledge in different areas and professional development.
  • Travel. This vertical is aimed at broadening the mind and exploring the world around you. 

How We Choose the Vertical: Analyzing Consumer Behavior

Final thoughts

In marketing, it is very useful to put yourself in the customer’s shoes and evaluate your product from their point of view. The affiliate marketing industry is no exception! Although there are many other reasons for you, as an affiliate, to choose one vertical over another (I hope those reasons are clearer to you now, too). And sometimes it is worth relying on the behavior patterns of your consumers to increase profit.

Have a story to tell about traffic arbitrage?
Become a ZorbasMedia contributor!
Become an author