We caught up with Impact’s first-hire CMO, Scott Brazina, who’s been with the company for a year now and is just one of many CMOs leading the way in the performance marketing channel. Impact’s co-founder, Todd Crawford, also joined us and shared his incredible knowledge as we delved into what the current state of affiliate marketing looks like, Impact’s progress in the channel, and where they see performance marketing heading in the next few years.
Scott, you’ve been at Impact for about a year now. It was a first-time hire, so can you tell us a bit about what you do?
Scott Brazina: So, it’s a new role for Impact and I think it is a sign of the stage the company is at and also where the world of marketing is today. A key part that I bring to the effort is highly targeted marketing at scale. Impact is a B2B marketing company and I accelerate growth through highly targeted, account-based marketing. Engaging with clients through multiple B2B marketing channels, effectively communicating with them, and making sure they see the value that Impact can bring to them are the key parts of the next stage of the growth for Impact.
How has your job helped shape Impact’s growth so far?
SB: What my job is helping to do is put some focus, methodology and discipline into Impact’s approaches. The exciting thing about Impact’s solutions is there are so many markets and directions we can take our solutions into, and we’re prioritising the direction of the company based on where we can make the most impact given the size of our organisation and our budgets.
One key thing that is coming out of it is, market segment and account focus, and doing it in a partnered way with the tech solutions and sales teams. We are then focusing on the right segments and accounts to achieve more effective marketing at scale. So, we are trying to accelerate the growth through that focus and are starting to see the data and the results of that prove out.
The role of CMOs is changing in the industry as a whole – how is it changing and why do you think that is?
SB: I think the CMO role and marketing as a practice is changing because there is a shift from art to science. There is an ongoing shift from the world of advertising, marketing and communications being heavily art-, emotion- and creative-oriented to more analytics and data focused. It is more about an effective balance of art and science because the data and analytics are going to take us so far so that the creative, art and emotion is more methodical and provable. The science and data are what’s new right now, and what’s driving this change also starts with the internet itself as it is developing as a channel for commerce and communication.
What do these changes mean for Impact specifically?
Todd Crawford: Scott mentioned account-based marketing; his department leverages other marketing technologies to help create scale, efficiency and measurement so that he knows when he is spending money and resources on efforts that show that we are selling our technology correctly. So, we want our funnel at the top to move those opportunities down to becoming customers.
When you look at the performance marketing industry, and the affiliate space – historically, most of the partnerships they are managing are voucher and cashback sites and some content. It is heavily weighted towards those two types of partnerships.
The challenge has been “how do I get more affiliates?” Brands wish they had more than what they already have, which has been, historically, difficult to scale. Most affiliate managers and sites have a sign-up page on their site and sometimes the network will put forward some partners they should work with. When you look at those efforts, an affiliate programme doesn’t grow in a way you can set goals, measure it and control it – it happens passively.
We need to give brands in the performance marketing space the tools to identify these opportunities and then have a systematic way of engaging them to sign up, to become active and revenue-generating. Then manage them in a partner relationship management tool (similar to a CRM, for example). You have to continue to engage in that relationship if you want to scale it.
To me, that’s what’s been missing in the industry; it has always been a passive recruitment strategy. Adding more revenue to contributing partners will diversify the portfolio and partner type, and grow the channel.
Impact recently hosted a roundtable with PerformanceIN on the developments of AI and machine learning. Do you reckon there’s enough evidence to justify its use in performance marketing?
TC: AI has a lot of promise and is a buzzword right now. For a while, people talked about big data – what that meant and what you did with it – and didn’t understand it. It was a grey area for a lot of people for a long time and I’m worried that is what’s happening with AI.
On the other hand, it does provide a lot of opportunity for scaling. For an affiliate manager, there are two roles for AI: administrative tasks, like sending newsletters, uploading the creative and processing payments, for example. Then there’s the revenue generation opportunity, where you bring in new partners, optimise and grow partnerships. The aim is for the manager to have as much free time for creating revenue generating opportunities by automating as much of the administrative tasks as possible; that’s been our focus. Whether you call that AI or not, the goal is to make people’s lives easier and get the data that shows how well it’s working so they can optimise that based on real data versus like what Scott was saying, which is ‘art’.
The challenge is the data for marketers in this channel. Most affiliates are measured on the revenue they drive but what is important to a brand like new customers vs. returning customers, so, having the data to look at something below the surface of the revenue drives more value to brands. I worry that AI is more of a marketing spin than a reality at this point.
In your opinion, what are some of the key challenges facing the performance marketing industry?
TC: Most brands that have a performance marketing channel are understaffed, so they are sometimes managing multiple channels on top of affiliates, which is a challenge. So, how do they grow that channel? You need data to point you in the right direction, so if someone comes to you and says “I need you to focus on bringing in more new customers,” you already have the data that tells you which partners historically have brought in the newest customers, so you’ll know which partners to go to and shift your budget accordingly in order to drive revenue and gain more customers. Marketers need to embrace data to drive decisions and use it to defend or champion the channel internally.
Secondly, they need to automate the administration so they can focus on revenue generation. If I ask a marketer to look over last year and tell me how many more partners are meaningful to the channeI many of them respond: “I don’t know or not many as it is impossible to scale”. If you work with an agency or network and tell them you want them to focus on affiliate recruitment, even though they say they’ll do that, the advertiser will often be disappointed with results. They won’t hit the number or they will recruit them but they won’t become active because it’s not scalable or automated. That is a challenge in the industry. Once they start to embrace automation, it will change how people will approach this channel.
What do you think the future holds for automation and scalability if you think that is a key challenge in the industry?
TC: Networks will tell you, “we have all the affiliates” but brands need to scale beyond just affiliates. We are seeing partnerships being created in ways I’ve never seen before. In the last two years, the types of partnerships that are being created on our platform by the brands that we work with are game-changing.
The industry is poised for a dramatic shift in what ‘affiliate marketing’ means, and we are advocating calling it ‘partner marketing’ or ‘performance marketing’ because it can accomplish so many more types of partnerships, which can again diversify the channel and create more value to brands. We are talking to top brands that work with us where this channel is number one, two or three consistently, from revenue, cost, or efficiency. Affiliate historically has been on the back burner but now it is starting to rise to become one of the top three channels consistently.
SB: I think there is a maturity model underway in the partner marketing market: B2B marketers and retailers are starting to understand other types of partnerships they can grow through; they may typically start with affiliate partners and then to layer on and expand with the core skill sets of technology to add influencers and then non-traditional partners, B2B strategic deals, and can manage and optimise them on a platform like Impact, just like influencer and affiliate relationships. If you start stacking those growth channels, they are all collectively partner marketing.
Aggressive performance marketers are waking up and thinking they can be more strategic and valuable to the business. We are seeing brands rebrand this channel from affiliate to partner marketing. Their titles are changing, the focus and oversight from executives are excited that it is shifting and it’s not just affiliate anymore – they’re bringing in broader and more diverse partnerships that are driving more value in ways that it had not historically.
In a way, it threatens the industry if affiliate managers continue to be affiliate managers and only work with those 20 partners that drive 90% of the volume.
With 2019 on the horizon, how do you think performance marketing will change over the next 12 months?
TC: Change doesn’t happen uniformly across all brands. I think globally, everyone is waking up to this concept that separation of technology and services is a better model, so they are investing in a company that focuses only on tracking and reporting, and CRM or partnership management aspect of it, and then either in-sources it or co-manages it with an agency, or outsources it and gets a more scalable approach to bringing in more partners. So, I think we are in the middle of this shift to partner marketing from affiliate marketing. As peers see their peers doing it, they will start to do it, so over the next 12 months, we will see more of that.
Historically, brands’ approach to the affiliate channel was “become an affiliate – it’s free to sign up” whereas today the shift is “we are going to identify the partners we want to work with and convince them to partner with us”. There are benefits for both parties and these types of partnerships are intentionally created and managed – that is what is going to change the landscape of performance marketing.
Then, I think data will play a bigger part too as it helps you understand how to be more efficient. We are trying to get brands to pay more for what they value most, and less for what they value the least so the channel can flourish.
SB: It’s an exciting time to be a marketer in the midst of the art and science shift because it is changing so fast and becoming more critical to business growth.
We are seeing an amazing shift through the many global brands we have. We are meeting with them every week and are amazed by the creativity and the ways in which they are taking the platform, particularly in B2B business development partner deals that are so powerful for brands to expand their reach and do it efficiently and effectively.