There are perennial themes in affiliate marketing that seemingly never significantly advance the discussion. These topics are typically centred on an over reliance on certain affiliates or the incremental nature of the channel. Another common question advertisers seem to have asked time immemorial is usually couched around where the next big affiliate opportunity will come from.
It’s a fair point and one that surprisingly (considering how networks see hundreds of affiliate applications on a weekly basis) is quite difficult to answer.
In order to understand this point better, it’s worth trying to contextualise the current state of the affiliate marketplace as well as the wider challenges the CPA model creates.
It’s worth initially stating the various phases the affiliate channel has gone through. If we scroll back to the early, fledgling days there was a perception affiliate marketing was all about content; small niche, hobbyist sites. The money started flowing in when paid search affiliates started arbitrating between click pricing and CPA returns. In a climate of few Google and advertiser rules about paid search engine listings, a handful of powerful publishers emerged. Over time the returns from this activity diminished and diversification was necessary in order to survive.
The Channel's Evolution
Coinciding with this period Quidco shook up the cashback market by launching the 100% model. Whilst not an overnight success, the viral nature of their business meant it flourished. Simultaneously, voucher coding exploded; both models trading off the increasingly savvy online consumer.
More latterly additional players have entered the space utilising data to offer retargeted and remarketed traffic and with mobile set to shake the market up, so ends the affiliate timeline for now.
Looking at these trends it’s easy to see them in a linear way, as one fades another takes it place. But this is the wrong way to visualise the channel’s evolution. I prefer to view the emerging traffic sources as layers on top of the existing ones. So when cashback and vouchers came to dominate, they didn’t necessarily replace other affiliates, rather they expanded the market as a whole.
This isn’t the place to discuss cookie overwriting but we know the instance of incentivised traffic superseding clicks from so called ‘content’ affiliate sites is minimal. I interpret this as how the affiliate world has actually grown exponentially, pulling in new consumers who hadn’t previously been exposed to affiliate traffic.
I firmly believe the affiliate space has plenty of growth still in it. Coming back to the original premise of this article, the question is where will this come from? Well in a sense we’re victims of our success and the purity of the commercial model. The CPA payment has meant we typically see it at the heart of what we do with various business models floating around it; diverse in the extreme, but with a common commercial model. This doesn’t happen in other digital disciplines, the rigidity of the channel dictating the nature of the activity. Because CPA presents such a low barrier to entry it is the first port of call for any number of new and innovative businesses. It also allows them to gain easy access to dozens of big brands very quickly.
I categorically believe there is a huge pool of opportunity out there, much of it latent, but the challenge is twofold; ensuring these publishers are savvy enough to know how to grow their product, as well as network acumen in knowing which are the right ones to back?
Working network side, we see numerous companies approach us on a monthly basis asking to present to our account managers and of course we will try and accommodate as many of these as possible. For an advertiser, as long as they’re happy with the nature of the promotional method, it’s a no-brainer to give them a go: if it doesn’t work, we won’t have to pay anything.
Take a Step Back
At present we want to ensure we have adequate support for those companies who do get it, who have the financial backing, business plans and the right people to push their product. But we also need to take a step back and consider what the barriers are to those that don’t. Realistically there are a handful of these companies every year we have confidence in to bring something new and successful to market.
On the other hand, many affiliate models will never work as going concerns. I see countless applications to the network that may occasionally make a sale but will never set the world alight. This in a sense doesn’t matter; many advertisers would be delighted to have a hundred affiliates making one or two sales a month rather than one big one doing the same.
But we also need to consider whether we all do enough to foster these small affiliates. Take a step back and put yourself in the shoes of someone who knows nothing about the affiliate industry, but has a small, interested audience in the content regularly posted on their blog. Applying to a network can be bewildering in the first instance. How easy is it to generate a link or navigate a network’s suite of tools? Not to mention the industry is also littered with baffling acronyms for the un-initiated.
From Network Guilt to Affiliate Passion
Networks and third parties are guilty of an insularity that makes it hard for affiliates to do business and we all need to recognise that whilst we, on the one hand, complain about not having a place at the top table, we also make it pretty damn hard for people to penetrate fortress affiliate.
Affiliates too need to consider what type of company they are going to be. Those built with passion and based on a personal interest will always find sympathetic brands keen to work with them. The Hut Group spring to mind; a hugely engaged advertiser with strength in a number of niches which will bend over backwards to accommodate and support these affiliates from the moment they sign up to the network.
Those with grander ambitions need to take responsibility for the viability of their business model. It has to bring something new to the table and has to offer the consumer something they cannot get elsewhere. Without these, then no amount of pushing by the network will translate into sales. And we’re in the hard tacks business of revenue, so whilst the barrier to entry may be low, the channel also starkly puts a number against success.
Ultimately there isn’t a lack of focus on innovation, but innovation doesn’t always translate into sales and that is what we’re expected to produce. There is plenty of brand and business building going on behind the scenes and the beauty of our channel is it’s always willing to shuffle up and make room for the next big thing. What would be unforgivable however is if our introspection, tools and services precluded us from supporting those businesses that may have more modest ambitions but enrich the whole affiliate landscape.