Why Agency of Record Doesn’t Work for Affiliate Program Management
A misconception among some Chief Marketing Officers (CMOs), even heads of e-commerce and digital marketing, is that a full-service marketing agency can deliver the level of quality management that a sophisticated, well-run affiliate marketing program requires.
There are some larger agencies who describe themselves as “full-service,” signing multichannel deals with companies where they are considered the brands’ agency of record (AOR). These arrangements are convenient, but they don’t always ensure that the brand is getting a quality product in each of the contracted service areas.
This is especially true with affiliate marketing.
“Full-service” might seem like a plus at first glance, but that’s assuming the AOR firm can actually deliver on what they are saying “yes” to. In order to drive more business to their channels, large AOR firms will almost always say yes to most brand and client requests for affiliate program management, even when they have little competency or notable experience managing affiliate marketing partnerships or programs.
If your brand decides to hire a full-service AOR, do your homework. If they don’t have true affiliate marketing experience, expertise or partner relationships, you put your affiliate program at risk of being grossly mismanaged—or managed in a way that can have long-term repercussions for your brand, your affiliate program and your company.
Why Affiliate Program Management is Outside of AOR
In affiliate marketing, under-managed programs tend to be full of low-quality affiliates. These could include trademark violators, nefarious toolbar users and cookie stuffers. Partners such as these often burn budgets and don’t represent the brand in a positive light. However, unless the program management team has the right resources, tools and experience, they aren’t easy to detect.
Any large agency with a meaningful affiliate management practice should have a team of at least 10 experienced affiliate marketing professionals, including senior leaders with 5-10 years of experience in the industry. Comparatively, you would never hire a pay-per-click (PPC) firm that had only one or two specialists.
Most traditional AOR firms don’t have dedicated affiliate program experts, making them a poor choice to manage sophisticated programs—especially global ones.
Due to numerous complexities, managing global affiliate programs demand an even greater understanding of the nuances and intricacies of affiliate marketing in different countries and team members who are experienced in publisher recruitment in the region.
For these reasons and many others, almost every company with a successful affiliate program keeps the management of their affiliate program outside of their AOR relationship.
Industry leaders, including support this position:
Daniel Marques / eCommerce & Growth Marketing Executive (Crocs, adidas, Ann Taylor)Like many things in digital, focus and expertise are critical elements to success, and affiliate marketing is no exception. While many AORs may offer affiliate services, it is often not an area of focus or, at worst, they are likely contracting it out to a freelancer or small agency spread across many clients and delivering low value. Executing on affiliate marketing in ways that yield impactful results is often time-intensive and relationship-based so it’s critical to identify resources and affiliate agency partners that can bring that expertise, relationships, and time investment to bear.
Andrew Field / Founder & CEO of PFLAffiliate programs are an important channel for business growth if properly structured, but they typically fall outside the Agency of Record (AOR) structure. Most traditional agencies simply don’t have robust affiliate practices or even a practice at all. If a brand is looking to engage with an AOR that claims to have an affiliate marketing offering, CMOs must do their homework. The last thing you want to do with an affiliate marketing program is start over – it is very different from other forms of marketing as it takes a lot of time and effort.
Keith Posehn / Head of Marketing (Tundra, Uber)Affiliate can be a significant growth driver for almost any company, but it also requires a great deal of experience and an extensive network in order to reach full potential. CMOs should be mindful that while it can seem a compelling add-on to an AOR engagement, without proper attention, talent and a consistent strategy, it will rarely live up to expectations. If a company invests wisely in both the team and resources for affiliate marketing, it can become a long-term cornerstone of any growth strategy and a major competitive advantage.
Consequences of AOR-Managed Affiliate Programs
Here are three real-life examples to bring these perspectives to light:
1. AOR Outsourcing
A few years back, a creative agency in the role of AOR sold a large project to a brand that included multichannel performance marketing. The agency then subcontracted the project to another agency that could handle the paid search and display portions of the contract. However, this subcontracted agency did not have any experience in affiliate marketing.
The subcontracted agency ended up reaching out to Acceleration Partners the week before the engagement was due to start, asking us to recommend someone who could manage the program.
2. Abandoned Affiliate Account
Another brand had a global agency managing its affiliate program as part of a larger digital marketing agreement. The global agency’s affiliate practice consisted of only a few people, all of whom slowly moved to other firms and weren’t replaced.
Eventually, the last person at this global agency quit and left the brand without a single account manager. The agency had to tell the client it could no longer service the program, which had already deteriorated for six months and cost the client hundreds of thousands of dollars. That’s when they reached out to Acceleration Partners and we have been managing their program for eight years.
3. Inexperienced Affiliate Program Manager
One Acceleration Partners’ client had previously hired a full-service digital agency to manage their affiliate program. After too many months of dismal performance, the brand decided to look elsewhere for program management.
When the brand became an Acceleration Partners’ client, we determined that their program needed to be staffed by five-person team. However, in an audit of their previously managed program, we discovered that it had been staffed only by a single junior manager who had no prior affiliate management experience. What’s more, that junior manager was attempting to “manage” six other affiliate programs that the full-service agency had won in the RFP process.
These examples are all too common—but they don’t have to be.
Paying for Performance
If you’re a CMO and are unhappy with the performance your affiliate program is generating, it’s understandable you’d want to look elsewhere. However, when you do, it’s essential to ask the right questions—especially in your RFP process—and know what answers to look for.
Brands who want to get the very best performance out of their affiliate program need to hire the very best to manage that program. However, if affiliate program management is just folded into a larger AOR deal, it’s unlikely that high performance is what you’ll receive in return.
Download our guide to Top 6 Must-Haves for an Affiliate Management Agency to learn more.