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Does the Affiliate Space Need to Adopt New Payout Models?

Does the Affiliate Space Need to Adopt New Payout Models?

With all the focus on why the model needs to work for the advertiser, we have too often neglected the potential positive impact of a new model for affiliates and more specifically true content sites, which are the life blood of the affiliate channel.

Over the last 5 to 10 years, the affiliate channel model hasn’t fundamentally changed. It has been for the most part one based on last click, and this has been its key selling point. When the channel was formed it was about rewarding websites for driving the sale and being the last click in the chain was the best form to attribute sales to any given website.

This made sense back then. However with time, channels must evolve to stay relevant, especially when it comes to winning client ad spend and increasing investment, which is the core point of why the affiliate industry needs to consider adopting additional payout models if we are to increase ad spend.

Online is rapidly changing and new ways to market are opening up. Online advertising is becoming increasingly personalised and data led, and the affiliate channel is constantly competing with other online channels for ad space on websites.

We have been very focused on the last click model for the advertiser, but this focus means we have neglected the life blood of the affiliate channel: affiliates. Without these we have no affiliate channel, and in this evolving industry we are competing with new and different online channels which pay out different models to websites with great traffic.

With the surge in voucher code sites and cashback sites in the affiliate space, and the more effective use of the last click model due to the recent economic backdrop, we currently face a channel that increasingly forces out sites with great content, or sites which deliver high quality traffic.

Ultimately these sites will be turning to other online channels that deliver better payout for their traffic, and as a result if we persist with this model for another five years we could face the prospect of an affiliate industry which is dominated by sites that focus on the last click.

An 'introducer'

Personally, I have a content site but I do not use the affiliate channel to monetise its traffic; I use a combination of display and ad sense purely because these models give me better rewards for providing high quality traffic that’s still in the browsing phase or upper funnel. I know that if I used the affiliate model the likelihood I could achieve the same revenue would be low, because my traffic wouldn’t be the last click, and instead would more likely be the introducer to the brand. Hence the current affiliate model doesn’t reward content sites like mine that have large volumes of high quality traffic, but act more as introducers to the brand.

From this personal experience, I concluded that the affiliate model has been effective, but as affiliate websites evolved and focused on being the last click in the chain, the industry has lost vital inventory on websites which drive quality traffic higher up the funnel.

With this in mind, the future of the industry needs to accommodate the upper funnel traffic sector, otherwise what we will see is more of this traffic leaving the affiliate space and providing it to other online channels to achieve revenue.

Increasingly among advertisers the perception is that the affiliate channel delivers discount-focused traffic, and if we cannot diversify then we face the prospect of a channel which is purely the domain of incentive sites, or a channel which in the advertiser’s eyes is a one-trick pony.

In the war to win more ad spend for the affiliate channel we must provide more traffic to clients, and the current last click model will need altering to cater for sites which operate in the higher funnel. Otherwise this source will provide their traffic via other monetisation channels, leaving less traffic to secure via affiliates, and less ad spend from clients.

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Andrew Chung

Andrew Chung

Andrew joined twentysix in 2010 as Head of Affiliate marketing and then expanding the department to cover various online marketing practises and became the Head of Performance Marketing at twentysix.

Andrew’s role encompasses, Affiliate Marketing, Behavioural Re-targeting, Display, Email marketing and Basket Retargeting and pushing these services via the performance marketing team to twentysix clients across the globe.

Previously at Affiliate Window as a Key account manager he has had a varied career within the affiliate the industry. His client portfolio has included heavyweights such as P&G, Brighthouse, Crabtree & Evelyn, Fortnum & Mason and Boots.

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