Most affiliate managers will readily admit that 90% of the revenues driven by an affiliate programme come from as few as 10-20 partnerships..
Managing an affiliate programme with thousands of affiliates is more work than it’s worth. Most of the time and effort is spent on the top partners so the remaining are left to fend for themselves, which can result in branding misalignment and compliance issues that may not justify the resources required to manage them. There is only so much that the top 25 partners can do for a given brand when managed correctly.
This is why more and more brands are turning to non-traditional partners as a way to grow their affiliate programmes versus relying on the long tail.
While traditional affiliates continue to be strong partners, brands are increasingly leveraging the affiliate channel to manage midsize business development deals, influencers, storefronts and referral programmes. This gives companies the opportunity to take advantage of partnerships that have traditionally been difficult to scale, track their performance, and grow their business with brand-aligned relationships.
With the expansion of affiliate partners, structuring an effective performance marketing team has become a top priority for brands. Successful affiliate management consists of a strong programme strategy, programme recruiting and activation, and programme operations. Some common ways affiliate programmes fall short are:
- Allowing the programme to be managed by junior people in-house or at an affiliate network that have limited experience and tend to be tactical and reactive.
- Prioritising volume over quality and the number of affiliates rather than driving incremental revenue.
- Paying commissions based on “last-in” activity, rewarding affiliates at the end of the funnel and discouraging those at the top who actually introduce new customers to the brand.
- Limited transparency or not knowing where traffic is coming from or the tactics affiliates are leveraging to get clicks.
Marketers are no longer tolerant of these low-value practices and are re-aligning their programmes to take full advantage of the growing affiliate opportunity.
Earlier this year, adidas revamped its affiliate programme to focus on driving incremental leads and sales, leveraging SaaS platforms and a global agency to work closely with both their in-house global and local teams. They reduced the number of affiliates to focus on quality, not quantity, which resulted in better performance and a higher ROI.
They also formed nontraditional partnerships with athletes. They built a store on former UFC champion Ronda Rousey’s website, hosted by Reebok, an adidas-owned company. Rousey’s extensive fan base helped drive traffic from her website to a country-specific, co-branded store, where fans could quickly and easily order gear.
As advertisers look to work with nontraditional partners, they are no longer willing to recruit them into a network platform due to the network override fees, which negatively impact their economics, and for fear of introducing the partners to other advertisers on the networks. Instead, they are turning to SaaS solutions that don’t charge override fees and provide advertisers with branded, white-labeled partner portals for easier onboarding and self-management.
To learn more about this emerging trend be sure to check out our session, Driving Results with Non-Traditional Partnerships, taking place on 25 October at 9:00.
This article was written with input from Robert Glazer, founder and managing director of Acceleration Partners, and adidas affiliate global manager, Jelle Oskam, who will join Todd on stage at Performance Marketing Insights (October 25) for the session, 'Driving Results with Non-Traditional Partnerships'.