Navigating the Challenges of Affiliate Partnerships
In affiliate marketing, building strong partnerships is crucial to growing your program. However, developing new partnerships takes time and requires initial conversations, strategy discussions, and goal alignment. Brands are also facing increased competition in the growing affiliate landscape and the impact of global economic changes on consumer, brand, and partner behavior. Navigating affiliate partnerships can be challenging, but an experienced agency like Acceleration Partners (AP) can provide oversight and support to help brands form mutually beneficial relationships with vetted partners that align with their goals and KPIs.
Discover the six common challenges that brands encounter when attempting to establish affiliate partnerships, and how AP overcomes these obstacles.
1. Strategy misalignment
Just as brands are looking to deliver the best results within their programs, affiliates are also looking for the best interest and fit for their platforms. Sometimes expectations and strategies do not align between brands and partners, but that doesn’t necessarily mean a lucrative partnership can’t be formed.
When this happens, an experienced partnership marketing management agency partner will look for a solution that’s mutually beneficial before moving on from the partnership opportunity. Often, the partnership just needs a different perspective. Some examples of questions AP asks affiliates to generate a new approach include:
- If offered an alternate CPA, would a different outcome be achieved?
- Are there other placements that would better align with both the affiliate’s and brand’s needs?
- Is the nature of the affiliate partner’s industry a good fit with the brand’s audience?
Strategy misalignment can be one of the most difficult challenges to overcome within affiliate marketing, especially when a strategy shift from either side isn’t feasible. In order to know all your options and achieve the best outcomes, it’s important to work with an agency partner with a proven track record and experience in delivering innovative solutions.
2. Historic results with a similar advertiser
Partners may be reluctant to collaborate with a brand if they have had a negative experience or poor performance with a similar advertiser in the past.
Before moving forward with such a partner, AP will investigate two critical aspects of their previous partnership:
- The reason for the previous collaboration’s failure, with a focus on determining whether the affiliate was the right fit for the product/service.
- Whether the affiliate’s audience is a good match for the brand’s industry. It is important to discuss options with the partner by delving into details such as when the affiliate tested with the similar brand, why it didn’t work, and whether it would be worthwhile to try again.
Once research has been conducted on the historical outcomes and a potential partnership has been identified between the affiliate and brand, an agency partner can initiate a limited-time test with the affiliate to confirm the viability of the partnership and its profitability.
3. Budget differences
As the economy remains unstable, budget differences have become more prevalent in recent months, with inflation increases exacerbating the situation. In some instances, an affiliate’s flat fee rate might be beyond what your brand can afford, especially without a proven track record of success.
Negotiation is a critical skill in such cases, as is having an agency partner skilled at navigating the nuances of negotiations with affiliates. While it may be difficult to avoid flat fees altogether, there are ways your agency can negotiate terms, such as requesting makegoods if placements underperform, a minimum number of guaranteed conversions, or an initial test at a reduced rate to assess the partner’s effectiveness.
4. Outcome expectation dissonance
When collaborating with affiliates, you can typically rely on them to provide a reasonably accurate projection of what they can deliver for your brand, drawing from their past experiences with similar brands. However, sometimes these projections can fall short or exceed expectations, leading to what is known as outcome expectation dissonance.
It’s crucial to ask your partners about how they arrived at their projections and what they will do if they are not met. Will they offer a makegood, run the placement until the projections are met, or have another solution in mind? Understanding the contingencies in place can help you make an informed decision and avoid potential negative consequences.
AP will help you gain clarification from potential partners to get a clear understanding of the projected outcomes and what steps they will take if they fall short. By communicating openly and effectively, we help brands establish a solid partner foundation and ensure that everyone is on the same page when it comes to expectations.
5. Limitations of certain attribution models
Affiliate marketing often uses last-click attribution models, which credit the affiliate responsible for the final click before a sale. However, this approach is becoming increasingly challenged, particularly for affiliates who contribute to the consumer journey at earlier stages. For instance, content creators and influencers can influence consumers before they make their final purchasing decision.
To keep up with these changes, consider leaning on your agency partner to find more innovative attribution models that can account for these influences. Instead of solely relying on last-click attribution, consider assigning value to different touchpoints throughout the customer journey. By doing so, you can better acknowledge the impact of affiliates that may not necessarily lead to the final purchase, but still contribute to the sale.
By embracing a more flexible attribution model, you can more accurately recognize the contributions of your affiliates, leading to more effective partnerships and a more comprehensive understanding of your customer’s journey.
6. Low payouts and commission structures
A key challenge in building successful affiliate partnerships is ensuring that your commission structure is attractive to potential partners. There may be cases where the commission you offer is not enough to entice a particular partner. In such instances, it’s important your agency partner conducts a competitive analysis of your brand to understand how your payouts compare to those offered by your competitors. By doing so, you can gain a better understanding of where your brand stands in terms of payouts and identify opportunities for improvement.
If you find that you’re already offering a fair rate but still unable to attract partners, consider implementing a tiered commission model. With this structure, you can offer higher payouts to partners who are able to drive a guaranteed threshold of conversions. As partners generate more conversions, the commission rate will increase, providing an incentive for them to continue driving results.
By implementing a tiered commission structure, you be assured that you’re only paying a higher payout to partners who are delivering outstanding performance. This not only helps to attract and retain high-performing affiliates, but also allows you to maximize the potential of your affiliate partnerships. Building successful partnerships is not just about offering high payouts, but also about developing mutually beneficial relationships that incentivize partners to drive results.
Overcoming affiliate partnership challenges
Forming new affiliate partnerships can be challenging, and it’s important to learn to let go if things don’t work out. While some partners may seem like the perfect fit, there may be unforeseen challenges that arise. However, the affiliate industry is constantly changing, and new players are emerging all the time. Revisiting an opportunity in the future could turn a “no, thank you” into a “let’s do this.”
To overcome challenges in new partnerships, communication is key. Identifying challenges early in the partnership when they are easier to solve is better than waiting until later when more time and money have been invested. Having an agency partner that’s prepared to negotiate in a polite and efficient manner is important, and having a strong knowledge of your program’s limits will give you an advantage.
Remember that there is rarely a “hard no,” and flexibility is essential to building strong relationships with partners. Acceleration Partners’ dedicated Strategic Partnerships Development and Publisher Development teams can help you find the right partner fit for your program and achieve your brand’s goals.
Ready to get the most out of your affiliate partnerships? Let’s connect!
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