I feel that I should start with an apology. I was determined to avoid buzzwords, jargon and hyperbole, and I’ve already said ‘new normal’. Things have changed, for sure, but whether or not we’re yet in a stable enough environment to call it ‘normal’ is very much up for debate.
What’s certain is that we’ve been through an extraordinary period – both in our personal and professional lives – and whilst, globally, employers try to understand the future of hybrid/flexible working, there’s an obvious focus on business performance. It’s critical that industries recover and return to growth as quickly as possible.
To assume that the past 18 months were negative for every business, across every sector, is patently untrue. Some sectors weathered the storm well, particularly those well-prepared for seismic shifts in consumer behaviour. If adversity breeds innovation, then the adversity of the past 18 months has certainly been the fuel for innovation within the affiliate marketing channel, both by publishers and the advertisers seeking new and enhanced partnership opportunities.
Not all news was bad news
In e-commerce, this change was accelerated by restrictions keeping buyers at home rather than the high street. Take the winter sales period in France earlier this year as an example. Data from Rakuten Advertising’s in-market affiliate network highlighted the consumer appetite for some well-earned ‘retail therapy’, with sales up more than 50% year-on-year.
But it was some of the changes in shopping behaviour that really stood out: click-and-collect more than doubled in popularity – growing 110% – and for the first time ever, shopping on mobile outstripped that on PCs 54% to 45%. This latter point is certainly something that should make affiliate marketers sit up and take notice, and the need for effective in-app tracking of customers through the affiliate journey is now an imperative.
While you could argue that the winter sales in France are a specific point in time and therefore not a proxy for long-term consumer behaviour, there’s evidence to suggest that the affiliate channel has performed strongly throughout the pandemic. Indeed, the UK’s Internet Advertising Bureau (IAB) reported that many affiliate programmes saw “high double and occasional treble digit growth” during 2020, with almost one in five brands and agencies spending a quarter of a million pounds a month.
The growth of affiliate marketing has been due in part to a combination of factors. Firstly, brands already familiar with the channel doubling-down on their efforts; new advertisers were driven to use affiliate for the first time as a response to a lack of real-world footfall; and publishers have been quick to develop new solutions and techniques to help brands deliver on their commercial objectives.
In some ways this is logical. Consumer electronics was a sector which performed well during the pandemic as consumers refreshed their home entertainment and working technologies. That they used this kit to discover, research and buy new products from different brands should be no surprise. This plays directly to the strengths of the affiliate channel.
This was something endorsed recently by Courtney Baumbach from US coupon and cashback publisher RetailMeNot: “The major shift to online shopping over the last year increased the openness of consumers to shop with brands they may not have considered or known about before. This opens the door to new product discovery through a full funnel affiliate marketing approach.”
Increasingly sophisticated affiliate marketing strategies, and the need for partnership
Forward-thinking advertisers will know this already, but for those with an outdated view, let’s bust a myth: affiliate isn’t solely about last-click and conversion. That’s still a valuable role, of course, and affiliate marketing still needs to earn its keep through revenue. However, today’s high-performance affiliate strategies – based on close partnerships between advertisers and publishers – take a ‘full funnel’ view of the customer journey, and employ the publisher (and attribution) models to suit.
The most effective high-performance affiliate strategies we see come through a true partnership between advertiser and publishers, one based on transparency and alignment of commercial objectives. The affiliate model is, after all, built on the premise of win-win for advertiser and publisher.
We have a vested interest in the growth of the affiliate marketing channel, of course, but also take a broader view. ‘Every boat rises with the tide’, and the idea that promoting best practice in affiliate marketing by engaging the broadest group of stakeholders is central to our approach.
It’s what led us, this year, to establish the Rakuten Advertising International Collective (RAIC), which brings together experienced marketers from brands, publishers and partners to discuss and show how the affiliate channel can be used more strategically. We’ll be publishing content produced in partnership with RAIC later in the year, but I don’t think I’ll be giving away too many spoilers in dipping into some of the insights here…
Affiliate for every advertiser
The diversity of brands represented within RAIC – from high-end fashion to consumer technology – has made clear that affiliate marketing strategies are playing a valuable role across all sectors. But the devil (and the value) is always in the detail, and it’s how these advertisers are using affiliate models to find, attract and convert new customers which is particularly striking. Their partnerships with publishers of different types is key.
As Carolina Paradas-Mandato of Harvey Nichols put it: “The success of an affiliate programme is the result of a variety of partners that touch each stage of the customer journey, from awareness to conversion. And partnership optimisation is not just about KPIs – publisher flexibility and adapting to changing strategy and goals is also important.”
In a single succinct quote, Carolina highlights several of the key elements of a high-performance affiliate marketing strategy. We’ve already mentioned the ability for affiliate to influence across the entire customer journey, and as Carolina states, this is usually best delivered by working with a variety of different publishers and partners.
Content publishers are great for top-of-funnel discovery and research; influencers, reviews and price comparison can all play a role in moving towards consideration; while vouchers, coupons, cashback and card-linked offers assist conversions. There’s recognition of this as an opportunity, and many publishers are looking to broaden their own offering in an effort to keep as much of the consumer journey within their own platform.
This was something RAIC member Tom Howard from APAC-based cashback leader ShopBack highlighted: “Our strategy is all about broadening our offering, and moving towards a ‘full funnel’ proposition. While cashback is our heritage, we’ve launched a price comparison tool to bring consumers to our platform higher up the funnel, have started to move into the content space and are working a lot with influencers. The more we offer ourselves, the greater our ability to follow the customer’s journey from search to sale. That can only benefit the advertisers we work with.”
As with so many modern strategic marketing activities, data provides the foundation, and a critical aspect of advertiser and publisher partnership is the transparent sharing of performance insight. Not only is this essential (obviously) in measuring success and agreeing attribution, but it plays an important role in the growth of affiliate as a strategic marketing activity within organisations.
As Josh Collins from fashion brand CottonOn added: “The more information and visibility we can give the business about what we’re doing and how it’s contributing, the more buy-in we get to grow our affiliate marketing strategy.”
Affiliate marketing takes centre stage
In many ways, the pandemic provided the perfect storm for the existing capabilities of affiliate marketing to demonstrate its value to more advertisers than ever before. While always important, finding the right customer, with the right offer, at the right time became a question of survival for brands.
In turning to affiliate – and discovering the variety and sophistication of the publisher partnerships available – the short-term commercial need has opened the door to long-term value. With the right mix of publishers, brand position is established, new customers found, repeat purchases driven, loyalty built and advocacy established.
As my colleagues in France say, “plus ça change, plus c’est la même chose” – the more things change, the more they stay the same.