Global consumerism, data availability and the rise of influencer and omni-channel marketing are shaping modern affiliate partnerships and pushing performance marketing to the forefront. Here are five ways in which partnerships between affiliates and publishers will evolve this year and influence the future of performance marketing.
Global expansion
Partnerships will expand globally. Faced with an increased pressure for sales growth and a highly competitive retail landscape – particularly for brick and mortar brands – advertisers are increasingly looking outside their native country for growth.
More advertisers seek global partnerships that scale to new audiences while publishers look to fill that demand by developing new sites that attract cross-border shoppers and by applying their promotional expertise to new consumer bases. Sub-affiliate or cost per action (CPA) networks are also gaining traction, as they help advertisers leverage their local expertise at scale in new markets. In APAC alone, cross-border e-commerce helped fuel a double-digit compound annual growth rate over the last seven years, a sign that affiliate advertisers have ample opportunity to expand their business globally.
New shopping behaviours
Understanding, and properly capturing, multi-device shopping behaviour will be a big focus. The average consumer owns three devices, making it difficult for marketers to connect with shoppers. Fortunately, the ability to accurately determine when a shopper researches a product on one device and then purchases it on another will become an industry-wide reality.
Such solutions offer significant benefits to advertisers, publishers and consumers. For example, legacy KPI’s such as click-to-sale conversion rate will morph into new KPIs, such as device-to-desktop conversion rate and vice versa. The change will allow advertisers and publishers to understand the impact these cross-device interactions have on product categories, AOV (average order value), type of consumer and even the time of day for those interactions.
As affiliate advertisers begin to better understand customers’ cross-device habits, publishers can start curating assistive advertising experiences that improve targeting, accelerate conversion and yield higher KPIs – all of which creates a better shopping experience for consumers.
Compensation models
Alternative compensations models will emerge. Publisher business models are evolving and content/influencer publishers are becoming more active in performance marketing leading to alternative payment requests beyond last-click CPA – cost per click (CPC), flat media spends and brand-centric premiums. How the affiliate channel responds will be key to its own evolution.
Some advertisers are spending more during the consideration phase of the customer journey by paying slotting fees to publishers who can guarantee exposure to a scalable audience. Now that cross-device tracking highlights a clearer picture of publishers’ ability to close sales, the ROI for advertisers’ flat spend through the channel will be more representative and can be backed out to the appropriate cost metric. Large media companies and mobile publishers, versed in payment models other than CPA, are initially requesting high CPCs or CPAs in order to normalise what they may otherwise receive in flat sponsorships or from other content channels. Advertisers must adapt to these new baselines for investment and success, with the understanding that a better consumer experience and conversion means a better ROI on customer acquisition through a data-transparent channel.
New verticals
New content verticals will help affiliates grow. Affiliate marketers need to expand their partnerships beyond their core vertical. It’s all about the consumer, where they are engaging with content and when. So it follows that affiliate audience and demographic matching should be explored. For example, finance-focused publishers are increasingly experimenting with travel and retail content, and style publishers are beginning to promote home improvement advertisers. This makes perfect sense, as the audience traits for someone researching a hot stock may match those of someone planning a trip. As long as the goal is to provide value to the consumer, a shift in vertical focus will enable affiliate partnerships to grow.
Machine learning
Machine learning will open up new possibilities for partnership interactions. The industry has seen the effects of machine learning on programmatic advertising and product algorithms. As the amount of data in the affiliate channel grows, those same principles will start being applied to partnerships in performance marketing.
Data assets feed consumer profiles, which allows digital media companies to identify individual consumers with great accuracy. Whenever consumers interact with the network and additional touchpoints, the data becomes stronger, increasing the opportunity for customised marketing at various points along the customer journey. When you combine data science, such as lookalike audience measurement, with the learned success metrics of new and existing customer engagement, patterns begin to emerge. For example, new publisher and advertiser relationships can hit the ground running upon launch and existing interactions can be optimised by the type of products, type of promotions or seasonal needs.
As shopping habits continue to diversify and globalisation – and machine learning – create more complexity in the affiliate channel, leveraging these opportunities will be critical to the future growth and success of partnerships. The advertisers and publishers who embrace ways to integrate them into their strategies will be the ones who come out ahead as performance marketing continues to progress.