We’re all excited about the investment in the affiliate channel and recognition of the value it brings to brands. Historically, CMOs have viewed our industry as a niche, often relegating it to second-class status. But according to the recent Performance Marketing Association study, CMOs now see the value of partner marketing in the US, showing the industry has expanded by 50% since the last PMA assessment in 2018.
What does that equate to in dollar amounts? The US affiliate channel is responsible for more than $9bn of advertising spend, driving $71bn in brand revenue. This accounts for roughly $1 for every $10 spent online in North America and underpins what we all know – affiliate marketing drives guaranteed sales for brands.
This sea change is bigger than “just” more money to invest in our programs.
Brands fully understand the affiliate value proposition (pay for performance with no upfront costs) and are tasking networks with maximizing scale from this advantageous model.
Your company needs you to make it work even harder for your brand by exploring the full breadth and depth of how you partner and with whom.
In this two-part series for mThink, we’ll discuss:
- Part one: The right way to conduct an efficient partner audit based on brand needs and goals
- Part two: Recommendations for new partners that can deliver significant incremental program growth
Putting brand interests first
It’s time to ensure we have set aside any remnants of siloed thinking. To capture value for your brand, you need to align your partnership strategy with brand needs. Here are our top four recommendations on how to do this.
1. Margins and profitability
As we all know, most traditional affiliate marketing is discount-centric. While discounts are a powerful tool for driving revenue, it’s more important than ever we ensure our programs and promotions grow both the top and bottom lines. It may have been enough to maximize the revenue credited to our programs in the past. Now we must identify partners that attract new revenue. By understanding the incrementality of each sale, we can devise more profitable agreements with current and new partners.
Awin works with retailers to properly manage attribution and understand incrementality. We offer an industry-leading solution called SingleView to precisely attribute credit for a transaction across all channels and partners that helped drive it.
Many of our clients come to us to move from one-size-fits-all commissioning to programs that reflect the level of revenue incrementality in the fee paid to each partner class and publisher. Tools like SingleView help you determine which partners are driving more incremental purchases so that you can right-size your commissions based on profitability.
In a groundbreaking case study for a leading retailer, our analytics team demonstrated the power of this approach for driving incremental revenue. This retailer found tremendous value in adjusting commission rates for its content partners versus its discount partners, as the former were consistently driving more profitable purchases and revenue. While they continued to work with these deal-centric partners, the lower commission paid better reflected the business value they drove for them.
Margins and profit are also core to smart partner recruitment efforts. To help brands better understand the most noteworthy developments and companies in the space for driving incremental revenue, our Awin Report 2022: Power 100 showcases the 100 partners that every brand needs to know.
Historically, affiliate leaders often focused programs on the largest possible audiences to maximize scale. In the last several years, Awin has helped many brands supplement these “mass” efforts with programs that maximize delivery to the audience segments most likely to buy. Many programs benefit when we use targeting goals and insights to define the right mix of traditional affiliate partners.
Your partner mix should align to the audiences best served by your brand, which will help drive more sales and reduce dependence on ever-larger discount offers over the long haul. Success here is about understanding how each partner is leveraging whatever tools they have to help you connect with the target.
Start this step of the process by reviewing your current list of partners in the context of available target insights. Additionally, if your success with certain partners provides new insights into your potential customers, connect with your brand team to help inform other channels with these findings.
There are a variety of ways to achieve more precise targeting. First, identify traditional partners with extensive reach into the most coveted audiences. It’s best to find tools to help you sort through the hundreds of thousands of options more quickly. Awin’s new Publisher Recommendation tool automates this for advertisers to recommend relevant new partners for their programs – and since its launch has facilitated over 23,582 partnership recommendations, 8,058 transactions from these partnerships, and $1.6m in retailer revenue.
Second, the channel has been flooded with technology partners that can now answer almost all brand needs across the customer journey – from the pre-purchase to the post-purchase phase – including improved onsite conversions, increased AOVs, better user experiences, and strategic social media and search strategies. On Awin, our searchable directory of tech partners contains direct access so these partnerships can be forged at speed. Often these solutions require a commercial agreement and due diligence, so we help expedite this process with one-click activations and integration assistance.
Third, many of your largest partners in the cashback and deals arena have highly-advanced segmentation tools available to clients willing to share their customer data. For example, some large partners offer geolocation targeting when prospects are most likely to be receptive to an offer. We have found this very powerful for travel and retail brands.
Conduct tests with community partners that reach new audiences you think might be responsive. For example, some at-scale partners focus on age groups, gender groups, lifestyles, and ethnicities. Testing programs with these partners provide a low-risk way of assessing secondary target strategies. Additionally, many of your partners may be able to use their customer and contextual data to help you identify markets you haven’t yet considered.
Awin constantly focuses on ensuring our clients have the best array of traditional affiliate partners to maximize the impact on core targets. We also work with the most sophisticated partners to find new ways to connect with core and noncore target audiences. This requires close collaboration to test new ideas that offer an excellent target fit. Beyond being experts in the North American affiliate landscape, with 17 offices globally, we can help you identify new partners that help reach sizable audiences in your core markets but are headquartered elsewhere.
3. Brand fit and values
We’re all in the brand business. Consider brand equity and values as you identify and optimize your partner mix. Dig deeper than a handful of generic measures on audience size to find the best partnerships.
The Awin Group dramatically simplifies partner review and recruitment for interested clients by offering a pre-vetted array of publishers. For example, Awin was a first mover in identifying partners geared to brands passionate about ethical ecommerce. More recently, ShareASale’s strategic partnership with Sertify is another innovative step for the industry, enabling us to drive better awareness for under-represented retail businesses and minorities while simultaneously driving value for consumers who are eager to back them.
Further, our partner categorization and publisher catalogs help brands find perfect-fit partners more quickly and provide communication tools to simplify recruiting.
As new partner classes emerge, work with your network or solution provider to ensure you are an early mover for opportunities well suited to your brand.
We’ve discussed the right audiences and environments to derive brand value. Now let’s move to time. Great affiliate programs deliver messages at times most advantageous to creating brand value. While most affiliate programs are “always-on” and drive sales throughout the calendar year, many brands have distinct seasonality you should reflect in your go-to-market.
Sometimes, timing is about specific periods of the year where you want to be more active, like “Cyber Week” or “Dads and Grads.” In other instances, aperture comes from when a customer chooses to search for solutions. That’s just as critical a consideration as calendar dates. Such innovations have come at a fast pace in recent years, so it’s essential to find ways to stay up-to-date. Awin works to ensure our brands are first- or early-movers on transformative tech like geofencing, emerging platforms, and innovative placements. These empower you to change minds and close sales, not just offer a coupon for a purchase that will happen anyway.
Having a diverse set of partner types that run across the funnel on your program is of tremendous value here. This means you have every angle covered, ensuring your brand is ‘always-on’ and available from an awareness perspective across the customer journey. This helps ensure your brand is present regardless of where the customer is in their journey. We’ve seen massive growth in the diversity of partner types in recent years, and this means that options for reaching customers everywhere are arguably more available than ever before.
All new investment in our industry creates enormous opportunities to grow businesses and careers. It also means we must abandon our siloed thinking and ensure our strategies and tactics are aligned to maximize brand value.
But by following these four keys I’ve outlined here, we can make partner review and evaluation an ongoing process and perfectly synchronize our efforts with the best interests of our brands and companies.
Awin is proud to be leading the charge as an industry innovator and advocate, as the future of our clients and partners inspires us every day to continue to evolve affiliate partners and marketing for their benefit. We would be honored to receive your continued support by nominating and voting for us as ‘Best CPS Network.’
Please vote for Awin here.
About the author
Alexandra Forsch is president of the leading affiliate marketing platform Awin. As a seasoned online marketing professional with over 20 years of experience and a proven record of outperforming corporate goals, Alex has a strong background in performance marketing, media planning, and buying, online marketing solutions, strategic and financial planning, team building, and client relations. She started her journey with us in 2011 as Head of Account Management for buy.at and quickly progressed to lead the full North America operation, developing a high-performing team and successful partner network as well as overseeing the US migration of buy.at to Affiliate Window, and later the rebrand to Awin in 2016. In 2019, Alex was appointed President of all US operations when unifying the leadership of Awin and ShareASale, with goals to expand upon our strategic solutions offered to clients across both platforms in North America.
Awin is a marketing technology platform, that provides an open marketplace for businesses to create any type of acquisition partnership. With over 240,000 partners – including traditional affiliates, global mass media houses, trusted micro-influencers, and innovative fintech businesses – advertisers can generate more sales, expand customer reach and strengthen their brand. Retailers that migrate to Awin from competitor platforms experience triple-digit affiliate program growth and a 63% uplift in revenue.