By Sheryl Ryan on November 25, 2016
Originally posted by Mark Jones on PerformanceIn.
The best affiliate marketers are always looking for new ways to expand the reach of their programmes to new affiliates, especially beyond the larger players in the space.
From managing mid-sized business development opportunities to consolidating referral and PR initiatives, affiliate programmes are an effective way to standardise and measure these types of relationships and grow your network of performance-based partnerships.
Robert Glazer, founder and managing director of Acceleration Partners, and Todd Crawford, co-founder and VP of strategic initiatives at Impact Radius, discuss the changing industry and how the desire for measurement, new platforms and pricing models is driving the establishment of these new partnerships.
With the help of Jelle Oskam from adidas, they also discuss options available to brands on the lookout for partners in the guise of pro athletes and YouTube stars, among others.
First of all, could you give us an overview of what’s meant by ‘non-traditional affiliates’?
Robert Glazer: Affiliate marketing is rapidly evolving and it is no longer limited to what have been the traditional partners or publishers in the space. With the emergence of platforms that can handle tracking, real-time reporting and payouts all in the same place, companies can now manage many types of business development and marketing relationships at scale. Brands are leveraging the affiliate channel to manage mid-size business development opportunities and consolidate referral programs and PR initiatives. Affiliate programs are effective for measuring these types of relationships and growing their base of performance based partnerships.
One example of this type of partnership is how Reebok partnered with UFC fighter, Ronda Rousey to create a storefront for her that features all her Reebok-branded products. Rousey is both a brand ambassador for Reebok and an affiliate. Rousey promotes this storefront through her own website. When people click on the “Shop” button in her navigation bar, they are taken to her Reebok storefront.
Are brands increasingly choosing to head down this route of affiliate marketing, or is it taking some persuasion from the agency/network side?
Todd Crawford: Affiliate marketing has matured into a de facto marketing channel that most brands are looking to include as part of their overall marketing strategy. The expansion from working only with typical affiliate type partners to include non-traditional partners is a plus for the channel and more and more advertisers are open and excited to learn how to leverage them.
RG: Many companies keep their non-affiliate relationships separate from their affiliate programme because it doesn’t make sense to pay an affiliate network a performance fee of 20-30% for relationships sourced by the brand. With the rise of SaaS platforms, brands are now integrating these efforts to work with more brand-aligned and direct partners.
From the advertiser’s perspective, is affiliate playing an increasingly larger and integral part of adidas’ overall marketing strategy?
Jelle Oskam: Our philosophy for every online marketing channel is that it should generate incremental sales, but never harm the brand. Keeping that in mind, it makes sense to approach the affiliate channel as part of the customer journey instead of as a separate channel on its own. We are increasingly data driven, so whether the affiliate channel will play a bigger or smaller role in the future will probably depend on its incrementality.
What sort of campaigns, or specific objectives, lend themselves to this approach – can you point to any particular examples?
RG: In essence, most campaigns will lend themselves to this approach. Ultimately, viewing the customer journey and the entire conversion path will benefit marketers across all campaigns as it provides real transparency on performance.
In addition, it is important to remember that Performance Partnerships™ are based on trust and knowing what your partner is doing. With traditional affiliate marketing, there has been a lack of real relationships and transparency in many cases. We are seeing companies working with partners in an affiliate-type way, but they are managing them through their business development team. What they often don’t realize is that these types of relationships are the same and can be managed in the same way. One provides a platform that is more efficient, trackable and scalable with better management and oversight. As brands look for more payout flexibility and transparency, they are realising the similarities between their business development relationships and affiliate relationships.
Are some brands hesitant to enter into affiliate? If so, why do you believe that is?
JO: Absolutely, and we understand why they are hesitating. The affiliate channel was a kind of black box for a long time, as a brand you had no idea what your affiliates were doing with your brand. If you wanted to sell Adidas in your physical store, you had to sign multiple terms & conditions and if you infringed on these rules, you were not allowed to sell the products. If you were an affiliate, the T&C used to be only a few pages and there were hardly any checks to see whether you were not infringing on the terms. Given the fact that most our sales are still being generated offline through our resellers and the affiliate channel is very tiny in the perspective of the total company revenue, it doesn’t make sense that we give so much freedom to our affiliates. Therefore, we have recently made some changes to our affiliate strategy, which can be summarized as “our way or the highway” combined with a reduction of the number of affiliates from over 2,000 to under 50 in big markets as the US. In this way, we’ve taken back control of the affiliate channel. I absolutely recommend other brands to do the same.
How do advertiser, network and agency work together to ensure a strong, and importantly, prosperous working partnership?
JO: The way we are working together with our network and agency right now is based on trust and transparency. We are working on a fixed fee basis with both our network and agency, because we want them to be critical on the incrementality of our sales and don’t want to give them an incentive which is not consistent with our overall goals. To achieve that, we must give them full transparency into our data. We are planning to give more data insights and transparency to our affiliates as well, because we believe it will give them the opportunity to focus on sending us the traffic that is most relevant and incremental, which will result in a higher amount of revenue for our affiliates. A shift from CPA to CPC will be something we will start experimenting with in 2017, because we believe that every touchpoint in the customer journey has a certain value. It will be our challenge to determine what that value is and how we will be rewarding our partners (affiliates) for it.
RG: The agency or management side of the equation involves understanding the brand and its marketing goals and developing an aligned program strategy to deliver the best possible results and outcomes. Many brands look for partners that proactively look out for their interests and take measured risks to drive more value. On the technical side, brands are looking for platforms that can bring everything together in one place. For some brands, this may mean using a traditional affiliate network. For others, it means using a Software as a Service (SaaS) platform. SaaS platforms manage tracking, real time reporting, contracts, payments etc. enabling companies to manage a wide assortment of relationships.
Going forward how do expect these kinds of issues (if any mentioned above) will be ironed out? A case of proving by results?
TC: Consistency of results has always had an impact on measurement and the ability to make decisions based on inconsistent data. It is critical to both brand, agency and affiliate that they use the same metrics and tools to measure performance. This will also allow for more accurate attribution modelling.
Are there hints that this approach to affiliate will continue to evolve into 2017?
RG: I think the number of brands who are developing or about to move to direct or in house programs is indicative of a major move to more direct control over their affiliate, marketing and business development partnerships.
This discussion formed the basis of a panel session at Performance Marketing Insights: London 2016.