Affiliate marketing and the broader realm of partner marketing is a vital revenue driver for most of the world’s top brands and yet some marketing executives have been hesitant to invest in the space – or invest more deeply – due to a variety of misconceptions. Some of the misconceptions are related to affiliates Wild West past but mostly reluctance stems from a simple lack of awareness around the state of affiliate and partner marketing today.
The team here at Partnerize recently commissioned a study on how marketers view the affiliate and partner marketing space, and the role it plays in their revenue mix. In this article, we’ll draw out some insights from this telephone and internet survey of more than 1,200 brand leaders to help explain the power of this channel in today’s modern marketing program. The results of this survey, along with great research from other leading industry analysts, can help you sell more investment in partner marketing up the food chain at your company.
With most marketing leaders, return of investment (ROI) is the name of the game and that’s a good thing when you’re discussing investments in affiliate and partner marketing. Because, in no uncertain terms, the data demonstrates that affiliate and partner channels represent the most efficient use of marketing dollars. According to IAB and PwC, brands are generating a 14-fold return on every dollar spent.
According to many sources, affiliate marketing – which, again, represents just one segment of partner marketing – accounts for 15% to 20% of large company sales. In our recent survey of brand leaders, we uncovered some even more impressive stats. Out of the respondents questioned, 54% said partner marketing drove more than 20% of sales, while 74% said partner marketing was a high or very high priority for them. Interestingly, 59% said sales potential for their companies has not yet been reached.
3. Everybody's doing it
The secret’s out on partner marketing and those who aren’t playing in this realm are already behind the curve. According to the recent survey, 95% of brands in retail, travel and finance have partner marketing programs in place. More than half of brands expect to spend more on partnership marketing this year than they did last year.
4. It's not all about discounting
Most marketers are familiar with affiliate channels and no doubt, these are large and growing parts of partnership. It’s useful to remember that even affiliate has many dimensions – not all affiliate arrangements are built around deep discounting.
Beyond affiliate, other partners segments are big (and getting bigger) as well, and the size of these opportunities tends to surprise executives. According to our survey, influencers and brand-to-brand partnerships now drive 24% of industry sales. In fact, the majority of the world's most prestigious brands are now leveraging partnerships that go beyond the realm of traditional affiliate channels.
5. It's incremental and measurable
Partner marketing used to have a lack of data that made it hard to integrate into data warehouses and attribution tools. These days, measurement of partner and affiliate activities can be much more comprehensive and even real-time. Application programming interfaces (APIs) make it easy to unite partnership data with the rest of your marketing data in order to understand how incremental this channel can be for your business.
6. Brand safety
For a channel to warrant investment these days, it needs to meet the modern marketer’s requirements as it relates to brand safety. Fortunately, through integrations with a company's existing brand safety tools, affiliate and partner arrangements can be held to the same standards of brand safety as any other channel.
7. Verified transactions
Much like brand safety, you can’t talk marketing investment these days without evaluating the state of fraud in a given channel. In this regard, partner and affiliate marketing emerge a lot cleaner than many of today’s other popular channels. That’s because partners and affiliate arrangements operate mostly on a cost per action basis. Transactions are verified, and so affiliate and partnership campaigns are much harder to game than ones based on softer metrics like impressions or viewability. In addition, some partnership management platforms are now implementing protections that can proactively detect and prevent fraud.
If you’re among the legions of marketers today that are urging their bosses to increase their investments in the affiliate and partner spaces, having fresh and compelling data to drive your discussions is vital.
There’s no need to rely on gut instinct when it comes to investment in this arena. The facts are here – they’re conclusive and they all point to a bright future for marketers that take full advantage of the partner and affiliate marketing spaces.