I start this from a place of context – that being the last 18 months. Over 50% of my time since starting a growth marketing consultancy (covering most media channels), has been within the spectre of a pandemic, and with it I have already noticed a relentless panic from CEOs and founders to pivot to e-commerce and online if they had not done so already.
Enter stage left; affiliate and performance marketing. We have debated the definitions in the past; I pride myself in being channel agnostic as a planner, and ultimately focusing on effectiveness/business outcomes (well that’s the goal anyway!). For the purpose of this, however, I want to focus on the apparent panacea for sales driving everywhere: affiliate marketing.
Marketing has been a hard sell into the board, let alone affiliate. Getting CFO and CEO buy-in can be tricky from a CMO, as marketing of both long term brand building and short term activity needs to be seen as an investment, oftentimes without immediate return, and that short term ‘performance’ activations drive some short term sales activity, but alone can not do it all. However, it can do some of it!
Back to affiliate. We all know it is a great channel to shift product, drive offers and sales on performance and reward partners with a pay on sale commission. But the cynics who do not understand it never give it the love it deserves.
So here are some pointers when discussing affiliate with the board. I vouch for these as I have used them myself even with smaller founder-run organisations. Some watchouts to consider and pointers for selling in, or at the minimum justifying, the affiliate dream.
1. The ‘yes but’ does not discriminate by channel
Whatever the channel is that you are advocating for sales or you have expertise in – you are likely to interact with a challenge and a cynic of said discipline. Particularly from the more fiscally minded colleagues on the board? Each channel in isolation without rigorous panning will face such questioning.
Paying for search (PPC) – wouldn’t we have just got that from SEO anyway? Paid ads on Facebook – Well surely they are taking the credit for everything on a first click attribution?
OOH ads – All very well having posters, but how do we know it is impacting sales positively? Affiliate? No different. ’Wasn’t this going to convert into a sale anyway?’ The short answer is oftentimes NO.
But with the knowledge of the standard ‘yes-but’ response to almost all revenue driving channels, if anything more performance focussed channels (particularly affiliate space) are an opportunity to point-score over other channels if that is your objective (although I wouldn’t necessarily advise it). There is a clear path to sale and a way of paying on performance, so the perceived outgoing and mitigated risk/sunk cost is lower or at least it is in line directly with sales growth, so typically a guaranteed ROI by design.
2. You are unlocking new buyers personas on otherwise non-converting audiences
In lieu of advanced measurement and attribution for your marketing efforts, you are always posed with the challenge of a last-click reward for affiliates, i.e. getting rewarded with conversions that would have happened anyway, a CFO’s nightmare of paying for the same customer twice. Therefore as a channel the mechanisms are (or should be) positioned to unlock new audiences of value and those who would only convert as a result of affiliate activity.
How? Well in new places of course. A voucher or a discount is unlocking a price-driving buyer, they are purposefully heading to site with a mindset to save money. An employee perks site a benefitting worker. A blogger and a niche follower. A comparison site to compare and save. As a footnote, the cases of audience overlap have started to decrease given recent cookie and retargeting limitations. Therefore affiliates offer incremental sales and opportunity for the c-suite to celebrate.
3. The tenancy is a hard working display buy
On many of these affiliate sites, you can of course pay extra, on a CPM or a fee (a tenancy) to give your offer or brand a bit of extra love. Billboards, advertorials. E-Shots, with maybe a commercial accelerator/hybrid payment for driving performance. This is a great sustainable play for the board to know about, as advertisers are helping to fund an ecosystem of publishers on the open web who wish to engage with their brand. Furthermore, rather than see it as a non-performance affiliate buy, it is simply, as far as the board goes, a hard working direct buy with a publisher. Embrace it.
4. Well placed affiliates and partners build your brand too
Many in my wider media and planning life are cognisant of the IPA study by Binet & Field ‘The Long & The Short of it’ which reaffirms the importance of blending mass awareness and targeted activations for long term brand sales and health. So before your cynical boss says the traffic and growth comes from brand awareness, note how many brands have been borne out of partnerships and associations too at the ‘lower funnel’.
I speak of ‘bottom-up’ planning with startups and D2C brands as much as top-down planning (essentially using performance focussed and affiliate activations to gain insight and helping add rigour and evidence to brand awareness activity). Look at the likes of wine brands who grew by Partnerships and inserts, the secret travel brands by email signups, and the fintech apps growing by golden tickets. They are all now advertising wider now, and are famous brands, but they started in performance. So could you, CEO.
5. Finally – so much more than fulfilment
To summarise and add to the points raised, additionally challenge the CXO assumption (and I have to say, sometimes including the CMO) that affiliate marketing is simply mopping up demand generated from pure-play advertising. This is a lens that is proven to be incorrect.
Of course, to shift excess product you could throw some discounts at it on the voucher and cashback sites as a tactic, but that is just one spoke of the affiliate wheel, and on its own is absolutely not the brand growth, particularly given the often compromised customer lifetime value from this channel’s certain players. It is partly your opportunity to differentiate between different types of affiliates.
A truly integrated performance marketing plan understands that affiliates and rewarding partners is a great way to associate with the right partners for brand equity, and capture sales. Alongside the other ‘yes-buts’ of social and search. It is another great tool in the toolkit. Use it.
So, what is the elevator pitch?
You are in with the CEO. They ask you, why affiliate? Be ready to recount: ‘each channel has its part to play, and you pay on performance with affiliate, a fiscal tick straight away. They unlock new audiences driven by price or niche, you can use publisher partnerships to create hard working tenancies, where you can build brands, and as a result, it is more than merely a fulfilment channel. Get it right, build slowly, measure the customer value over time, and like any channel, let’s test, learn and do this!’