By William Hamer-Jones on January 10, 2018
Partner marketing, which until recently has been referred to as affiliate marketing, initially drove traction for brands through SEO and paid search when it got started in the 1990s. This was an era before brands had digital marketing teams, dedicated expertise, strategy, and resources.
Arguably, affiliates’ activity wasn’t incremental and actually cannibalized sales for brands. Years later, brands still had a bitter taste in their mouths, questioning the value of the affiliate channel. Fast forward to today, and the channel has matured to the point where we now view affiliates as “performance partners”. Any type of partnership can be managed through the channel on a CPA basis and the channel’s importance to brands has only grown more significant.
From a brand perspective, we now see dedicated budgets as more brands have begun to understand the value of the channel which often represents between 10% and 20% of all online revenue. Of course this is dependent on input, resources, and the value a brand has for the channel. There are also more “non-traditional” types of partners that we’re beginning to see work through the channel – these can include banks, airlines, influencers, B2B partnerships, and more. These are some of the types of partners brands including Uber, Apple, and Airbnb have successfully brought to the channel through a combination of education and nurturing.
So what are the key ingredients for launching successful partnership programs?
The Performance/Partner Manager: Internally, this person is likely still called an “affiliate manager” and is the individual who you go to if you want to push a voucher, coupon, deal, or promotion. But the channel has matured, and today’s affiliate manager is a person who has multi-channel experience and can confidently discuss performance marketing, attribution, and connect all the dots in the digital marketing landscape. This is the person who needs to be the champion for the channel, its partners, and lead scalable opportunities.
Buy-in from internal teams: One of the issues I’ve encountered is that there are usually too many cooks in the kitchen when it comes to “performance partnerships”. As the channel continues to grow and newer, non-traditional partnerships come to fruition, there’s undoubtedly going to be some crossover with one of your internal teams. Traditionally, business partnerships (direct) have been handled by either a PR team, the performance/partner manager, or the business development team. A performance/partner manager needs to actively engage with these teams and educate them on partner types, payment methods, and tracking. In addition, this manager needs to drive internal buy-in from key stakeholders.
One platform to rule them all: Once you’ve spoken with the teams and learned who’s working together, I would suggest that you consolidate your efforts. I’ve worked with some of the world’s biggest global brands and surprisingly, I found that there were teams paying inflated CPAs to similar partners with no consistency, duplicative efforts on payments, zero tracking, no real attribution, and no transparency with respect to other teams. Partner marketing and marketing teams need to combine efforts via a single tracking platform on which they can report on, pay, track, and attribute partners with complete visibility. This ensures synergies across teams with a joint marketing goal, as well as full visibility and consistency for everyone.
Performance Partnerships: I personally don’t use the word “affiliate” when speaking with a brand or agency, and Impact Radius refers to “media partners” since our platform caters to so many types of partnerships. There’s a negative connotation associated with the word “affiliate” which can sometimes put people off. Let’s face it, affiliate marketing is more of a payment metric (CPA), than a channel. Any type of partnership, whether it’s working with a bank, airline, reward portal, or B2B relationship, can be run through a tracking platform. Education for partners is needed with respect to tracking, reporting, and payments as you engage with new partners through your performance partnerships program.
Replicate, model, and scale: Once you’ve educated the internal stakeholders and you have internal buy-in, look at rolling out the model, metrics, and methodology into new markets. The idea of paying partners on a CPA basis ensures that there’s low risk as you begin to scale your activities. Create the blueprint for how specific partnerships can work with you, and look to deploy this model as you onboard new partnerships. This worked particularly well during my time at Net-a-Porter where we used the affiliate channel to launch initial partner activity into new markets across EMEA. The CPA model ensured that we could stay within our cost of sale targets when exploring new territories and partnership opportunities.