Is Affiliate Marketing Eating the World? #31

Is Affiliate Marketing Eating the World? #31 🥣

• We launched a podcast called Always Be Testing! 🧪

• The first episode features Michael Kaminsky the founder of Recast. We talk about the modern Media Mix Modeling (MMM) and incrementality in affiliate marketing

  • Spotify 

  • Apple 

The RBL team was in NYC 🗽 Affiliate Summit East - it was packed with advertisers, networks, and affiliate partners - it would appear the industry is thriving.

Is Affiliate Marketing eating the world?

I know I know…it’s a cheeky play on Marc Andreeson’s 2011 thesis Why Software is Eating the World.

Bear with me…

Brook Schaaf recently shared an ANA study that the elimination of spam and low-quality sites from the media-buying mix would save a minimum of $13 billion per year!

Based on the open web programmatic global market size of $88 billion, which they project would turn out to be "at least $20 billion in efficiency gains for open web programmatic advertising."

Huh.

“Hey Bard, how much is media spent on affiliate, influencer, and partner marketing each year?” (I enjoy discussions with Google robots on occasion 🤖)

The global spend on affiliate, influencer, and partner marketing is expected to reach $14.3 billion in 2023.

This represents a significant increase from the $8.6 billion spent in 2017.

The growth of this market is being driven by a number of factors, including the increasing popularity of online shopping, the rise of social media, and the growing demand for authenticity and transparency from consumers

Ok Google, where did you pull this BS from?

• Influencer Marketing Hub 

• Digiday x AWIN 

• Statista

• Google Trends 

• eMarketer 

Dang, not bad.

(Bard blew Open AI away on this question FYI)

So to recap - the amount of WASTE in Programmatic Media Buying is similar to the amount of TOTAL SPEND in Affiliate, Influencer, and Partner Marketing.

Why only pay for eyeballs and clicks when you can pay for VALUED OUTCOMES (Affiliate Marketing)?

As Brook so astutely pointed out, I think it is time that CMOs, Growth Leaders, Performance Marketers, and Media Buyers woke up to the VALUE of Affiliate Marketing.

Could it eat up market share from channels like Progammatic that have a host of issues?

On June 27, The Wall Street Journal reported that approximately 80% of the ads YouTube serves across the web have breached its own terms of service, making them subject to refunds. Added context from Search Engine Journal.

Wow. Not cool!

But, no digital channel is immune to issues, affiliate included.

Perhaps the answer is not cherry-picking channels and avoiding platforms or methods, but maybe it’s about working with partners, fraud protection, data rigor, transparency, and accountability.

All to ensure that you are getting what you paid for. Our first pod talks about this in detail with Mike Kaminsky of Recast talking about incrementality and Media Mix Modeling (MMM).

If Affiliate is managed well it can offer you very high value, a multi-channel approach (less reliant on one player).

While Affiliate Marketing is of course not eating the world…yet.

It seems it will likely continue to eat the world…of Media Buyer budgets 😉 

But Why? ✅ 💻

1. Tap into high-quality Media Buyers on the sidelines who buy ads on your brand’s behalf and only charge on a Cost Per Purchase (CPA) basis on Meta, Google, and TikTok.

2. High-Quality Content Sites (commerce content) reviews, gift guides, comparisons from real humans

3. Influencers who actually believe in / love the brand. Tap into that consumer need for trust, authenticity, and social proof

All your performance marketing channels should be subject to rigorous viewability, fraud protection, FTC guidelines, Brand guidelines, MER/ROAS/ROI/Cohort analysis, accurate tracking, correct attribution, and use of the right attribution model, and incrementally to ensure it is delivering value for your brand.

It would seem with all things being relatively equal some channels represent smarter money than others!

If you are over-invested in programmatic and not getting clear transparent results, you might want to take another look at affiliate marketing.

Have an amazing rest of your week and weekend!

Tye