Peter Klein, the senior vice president of media services at American digital media and performance marketing agency, MediaWhiz, shares his thoughts on affiliate marketing in the US and reveals what aspect of European affiliate marketing he would like to take home.
Q. In the US do top brands with affiliate programmes know the full extent of how and where their brand is being promoted across the affiliate base?
A. Most brands do require that transparency, which makes compliance investments that much more important. Brand image and brand equity are critical and cannot be compromised or repercussions, such as non-payment, follow.
Any affiliate network or performance agency worthy of working with a brand should have licensed and/or proprietary technology as a value-add to manage the campaigns. Some of the newer brand marketers in the performance space may not have the knowledge or tracking to gain full transparency, but undoubtedly after a few months they put the appropriate checks and balances in places.
Q. Where are the next generation of publishers coming from in the US?
A.The next generation of publishers are mobile publishers, networks of bloggers that can help promote appropriate content and those that own their own sites.
Mobile affiliate marketing is still very much a nascent part of the industry and much testing will be done over the next few years to determine the best offers. Apps and in-app advertising are the low-hanging fruit of mobile affiliate marketing, while brand marketing and driving in-store sales will be the tougher channel. No one yet has a clear understanding of all the power mobile has to deliver, which is reminiscent of search engine marketing back in the early 2000s.
On the content front, I see first-party traffic being critical, be it a well-ranked SEO site that lends itself to quality via high engagement to create steady, reliable traffic.
Q. If you were to take one aspect of European affiliate marketing across to the US - what would it be and why?
A. I would expedite the online gambling channel. I’ve been researching the channel since 2009 and believe it should be legalized and regulated so everyone makes money.
Many companies shut their doors to online gambling given its legal implications. Meanwhile, it is legal in some form in most developed countries – and likely a good portion of online gamblers are US consumers. To restrict it online makes little sense to me, and I envy that in the European market.
I will stay away from the other big arena in peer-to-peer sharing as a huge opportunity, as I believe in Digital Rights Management to protect those that create original music, video and other content.
Q. What is your perspective on the state of US affiliate marketing scene?
A. US affiliate marketing continues to grow as more senior marketers are learning about performance marketing. The current challenges within the affiliate marketing industry revolve around compliance and lead quality. As the marketing channels continue to become more competitive and restrictive, compliance and fraud issues will grow apace. The good news is that there are many services for lead quality and monitoring that can help combat such issues.
Q. What lies ahead for the US affiliate marketing industry and what can people expect to happen over the next year or even the next five years?
A. The performance space will evolve into a much more mobile-centric industry. We are seeing heavier investments in all affiliate channels. Advertisers are beginning to more fully understand the need to design their mobile landing pages with lead generation in mind, and are integrating mobile lead-generation features into them, such as click-to-call functionality.
The true value of affiliate marketing will have to be measured on driving traffic online to offline as most of the non-games/entertainment segment is information and location gathering.
On the compliance front, I believe self-regulation within the industry is the right approach to solve many of the accountability and compliance issues that have plagued affiliate marketing in the past. This is preferable to government regulation, which will only serve to diminish innovation and growth within the industry. More stringent self-regulation will create a much tougher barrier to entry for the unscrupulous and ‘quick buck’ marketers.