I’ve just returned from Germany having attended an Axel Springer event in Berlin that brought together a variety of their businesses operating in similar spheres. This year the topic of affiliate marketing was added to the agenda for the first time, and I was keen to be involved.
The logic behind these events is sound. Axel Springer owns countless digital marketing entities across the digital ecosystem, all of them running independently. Therefore it makes sense to compare notes, pool ideas and experiences to hone products, improve messaging and share best practices.
The resulting event meant Awin sat alongside other AS businesses like Das Bild and Stepstone (who own a wealth of local job sites across the world.) As the only affiliate network and vendor supplying services to brands in attendance, inevitably questions fell to us to answer about why some of the tactics they had tried hadn’t yielded the results they hoped for.
It was a useful exercise in taking stock of how we all sell in affiliate marketing to brands.
Managing expectations
The affiliate channel is an excellent source of B2C leads and customers, but anything more focused on B2B needs additional effort and resource. Think about how the affiliate marketing CPA model is typically a one-off payment, whereas B2B campaigns may need a significant amount of upfront and ongoing time to generate a prospective customer whose value is delivered over a much longer period.
In addition, anything that is lead based requires checks and balances to ensure quality control. While affiliate marketing or lead generation can be an incredibly safe place to invest, it needs monitoring, active engagement and compliance controls. It cannot be switched on and left to succeed.
Controls
The affiliate channel is complex and has many moving parts. This requires time, patience and tools to help monitor performance. A guaranteed way to instant disillusionment is activating everything to "on" and sitting back, expecting the sales to roll in. A staggered approach to adding affiliates to your program allows you to assess each opportunity and set appropriate controls and measurements. It also enables brands to assimilate activity within their broader marketing mix, not to mention understand how to optimize each of those relationships before embarking on the next one.
Affiliate marketing is not a panacea
Just because affiliate marketing exists, it doesn’t mean it can be bolted on as an extension of a wider digital strategy. The truth is it won’t work for everyone. At Awin, we see it perform well for larger brands, especially in retail and travel. The mix in tech and services is completely different and often more sophisticated. Couponing can comfortably account for 40% of a retail program’s sales, but fewer than one in 10 for a telco program. The complexion of affiliate activity is dictated as much by the sector you operate in as any actions you take to develop a program in a certain way. It’s also critical to be truthful. Additionally, it can be difficult to use affiliate marketing to grow your brand if resources aren’t poured into it and patience applied. Ultimately the old adage - you get back what you put in - typically plays out in this channel.
What do you expect a network to do?
What was clear from discussions we had at last week’s event was the expectations of an affiliate network vary from company to company. At a very basic level, they’re a facilitator, each of them needing to do the basics well: tracking, reporting and payments. Beyond that, there are many additional behind-the-scenes functions from compliance and quality control to building relationships. More recently, there has been a concerted effort by newer players on the scene to try and depict networks as unfit for purpose, a two-dimensional approach in a more geometric age. This is pure obfuscation, a recurring PR-effort to try and paint one technology as being better than another. They’re not. Whether they refer to partnerships, publishers or affiliates, they all offer brands a route to connect to customers via the hub of a network or tracking solution.
Affiliate marketing is flexible
One of the misconceptions that came through in discussions at the event was that there was a rigid formula for affiliate marketing success. On the contrary, other than typically working to the common last-click CPA (or CPL) metric, there is a huge scope for flexibility. The key is determining what success looks like and then being open and honest with publishers about what resources and budgets are available to achieve that. It may be that other payment mechanics kick are utilized, in which case looking at a program-wide return on investment rather than an affiliate-specific one, will allow you to carry out more interesting activity. Ultimately affiliate marketing empowers brands to work in an ongoing test and learn environment. By identifying partners to work with and consulting with them on how best to achieve outcomes will always lead to a more fruitful relationship.
In a nutshell, affiliate marketing done well is hugely powerful but too often brands fall into the trap of assuming they’re straitjacketed in the decisions they can make. Identifying your goals, being open and transparent with your partners while taking a pragmatic and flexible approach will set you on the road to affiliate success.
