Affiliate Marketing Is Not What You Think #6

Affiliate Marketing Is Not What You Think

Is Affiliate Marketing the most misunderstood and underrated performance marketing "channel?"

I think so.

It is also a small tight knit community that has a tendency to pull you back into its orbit!

Affiliate Marketing is

1. Full Funnel

2. Multi-Channel

3. Data Driven

4. Evolving

5. Relationships

6. High ROAS low CAC

Let's break it down

1. Affiliate Marketing is full funnel. It can deliver for e-commerce brands at each stage of the marketing funnel:

Why does this matter? Despite popular belief the affiliate marketing practice can improve metrics at all three stages of the E-Commerce buyer decision journey from awareness (impression), to consideration (click), to conversion (purchase).

2. Affiliate Marketing is Multi-Channel. As a result you can reach consumers on:

• Search

• Social

• Email

• Content (like the many partner sites listed above)

• Coupon & Deal

• Loyalty & Points

• Retargeting, Card Link Offers, Domain misspelling recapture

3. Affiliate Marketing is Data Driven. Leading affiliate marketing tracking solutions like Impact to track:

• Impressions

• Clicks

• Leads (email / form submission)

• Downloads

• Purchases

• Many other actions utilizing pixel, server to server and batch tracking methods

Combine this with internal estimates or additional actions and you can gain a clear picture of how the affiliate marketing channel is performing and compared to your other initiatives.

We often look at cohorts of users from particular partners over time to get a specific read on the quality of purchases based on metrics like: Average Order Value (AOV), LIfetime Value (LTV), Paypack period, % new customers of total orders, return / refund rate, and repurchase / reorder rate.

Utilizing internal processes and system, third party tools, affiliate tracking solutions and e-commerce brand internal data we can also glean a clearer picture of the ever challenging question of attribution (giving appropriate credit to each channel / touch point) and incrementality (determining if a channel or lever is adding value by testing its removal/absence). Two overlapping but different exercises that will cover in future discussion.

4. Affiliate marketing is evolving. Over the years affiliate marketing has improved trust, increased measurability. In the last ten years content and influencer marketing have exploded. This has offered e-commerce brands 1) a more awareness and consideration funnel opportunity 2) a means of putting their brand story into the channel practice and 3) a more incremental lever e.g. content has been proven via testing to be more likely to influence purchase behavior than some other affiliate business models in a number of tests.

Fraud protection is another area that continues to improve as networks improve their ability to detect fraud, bad actors are prosecuted, tools like BrandVerity and Impact anti-fraud solutions help for monitoring Search TM Bidding, FTC violations, and working with savvy teams to monitor and remove suspicious behavior.

5. Affiliate Marketing is driven by relationships. While it might sounds cheesy or cliche, it is true. While programmatic elements have entered into affiliate marketing, and data and code is making more decisions as time goes on, humans are at the center of the work. Affiliate marketing is often 1:1 human interaction, collaboration, and negotiation.

6. Affiliate marketing is often the highest ROAS and lowest CAC channel for e-commerce brands with good fit and well managed programs. Very few people realize this.

It just requires more patience than turning on programmatic, search or social. If it takes 3 months to get those channels set up and optimized with the algorithms, affiliate marketing can often take 6 months (2x the time) to provide reasonable ramp up time to onboard new partners, activate, optimize and manage them to grow your brand.

Think of it more like a aircraft carrier versus a cruiser. It take longer to start, stop, and pivot than other performance marketing channels.

Affiliate Marketing:

Other Performance Marketing Channels like: Search, Social, and Programmatic:

Happy hunting for great high quality affiliate marketing partners! As always let me know if you have any questions.