TheFiveHouses

How Einstein’s Riddle explains channel diversification

I am always on the lookout for great thought experiments. I love them, and I can often use them for metaphors for affiliate program management. It’s a great teaching tool, a lot of fun to talk about, and a great way to merge two really fun topics.

While I am not a big fan of riddles, there is one that I really enjoyed solving. Maybe it’s because it’s more logic based than the typical riddle, but either way, I think it’s great. I am of course referencing the title of this post. Einstein’s Riddle is famous. Not only because it’s Einstein, but also because he claimed that only 2% of the world’s population could solve it. If you are up for a break and want to give it a try, here it is:

There are five houses in five different colors in a row. In each house lives a person with a different nationality. The five owners drink a certain type of beverage, smoke a certain brand of cigar and keep a certain pet. No owners have the same pet, smoke the same brand of cigar, or drink the same beverage. Other facts:

  1. The Brit lives in the red house.
  2. The Swede keeps dogs as pets.
  3. The Dane drinks tea.
  4. The green house is on the immediate left of the white house.
  5. The green house’s owner drinks coffee.
  6. The owner who smokes Pall Mall rears birds.
  7. The owner of the yellow house smokes Dunhill.
  8. The owner living in the center house drinks milk.
  9. The Norwegian lives in the first house.
  10. The owner who smokes Blends lives next to the one who keeps cats.
  11. The owner who keeps the horse lives next to the one who smokes Dunhill.
  12. The owner who smokes Bluemasters drinks beer.
  13. The German smokes Prince.
  14. The Norwegian lives next to the blue house.
  15. The owner who smokes Blends lives next to the one who drinks water.

 The question is: who owns the fish?

 So I love the logic that is required to solve this, but it’s also a great metaphor for affiliate program channel diversification. When I say affiliate diversification, most think coupons, loyalty, content, etc.. I am not referring to simple affiliate category diversification. That is just the start to getting your program in the right place. We all need to have a healthy subset of each affiliate category to truly be incremental. I am addressing more those affiliate types within each parent category of affiliates.

We all know of the parent or top categories of affiliates. Loyalty, coupon, niche, content, social, search. I am often surprised when I hear that not even each of these categories are represented in an affiliate program, but that is not what this post is about. If you are curious, I have written about that here: https://jebcommerce.com/all-i-care-about-is-content-publishers-the-rest-are-junk/

And Here: https://jebcommerce.com/how-to-best-utilize-affiliatevendor-partners-a-total-ecommerce-perspective

There are affiliate types within those parent categories. Some loyalty publishers live in the Norwegian house, and others may like to drink milk. (if I lost you there, refer to the riddle). Others may have dogs, and drink coffee.  What I mean by that, is that there are different cash back, points back, air miles, college fund, and GWP models for loyalty publishers out there. They also give back different amounts. Some are 50/50, others 60/40, and others 100%. Some may work within your business model, others may not. Don’t make the common mistake of treating all loyalty publishers the same. They all need different and specific communication and optimization tactics.

The same can be said regarding coupons sites. While there is a misconception out there around how much incremental value they bring, we have found through looking close at the data is that is rarely the case. Some coupon sites may provide only late funnel activity. Most of the others provide very early funnel incremental activity. We know this because we are seeing more and more millennials using their favorite sites like Ebates.com, Coupons.com, Offers.com and RetailMeNot.com just like they would a simple google keyword search. I am sure most advertisers would love it if I would tell them we could get more early funnel activity like this. There is a whole sub-segment of coupons of affiliates to optimize for this type of activity. Many advertisers don’t even look at it that way.

Figure out which affiliate’s work best with the right house, animal and drink and you will be successful with your optimization. A good rule of thumb for affiliate marketing that is often missed, is treat each affiliate differently and optimize the tactics and communication for each individual affiliate. There is incremental traffic out there across all categories of affiliates.

Did you figure it out?

Who owns the fish?

Would love to hear from those who gave it a try. Let me know what you think! sales@jebcommerce.com

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