I always find it interesting to speak to my peers about affiliate marketing. While many have a marketing-related or digital marketing backgrounds, they are often puzzled by what the channel is and the benefits it brings to the wider digital marketing mix. This can also be true for marketing managers, where I feel there can sometimes be a misunderstanding of what can be achieved through the channel.
With the right people and processes in place, running an affiliate programme can be a fantastic way to raise brand awareness, gain new customers and drive additional revenue for your brand. In fact, the latest IAB Affiliate Marketing Study revealed that in 2017 for every £1 spent, the affiliate channel generated £16 ROI; making affiliate marketing arguably one of the most cost-effective marketing channels for brands.
Let’s take a look at the three biggest affiliate marketing myths and set the record straight.
1: It’s too difficult and time consuming to get involved in the channel
The value of running an affiliate programme can be greatly under-estimated. There can be a perception that launching a programme can be an admin-heavy project or the length of time to get up and running is too long – when this simply is not the case. Working in collaboration with an affiliate consultancy such as Acceleration Partners can equip you with all the right guidelines and impartial recommendations to kick-start your own affiliate programme. Managing the launch of a programme can be very straight forward if the objective setting, commercials and platform are agreed prior to launch; and with the right preparation, a programme launch can take between 4 to 8 weeks.
2: The marketplace is too fast-paced and is constantly changing
It’s never too late to enter into the world of affiliate marketing. Often, marketing managers are responsible for traditional digital marketing channels including SEO and PPC and affiliates can be overlooked or left on the side-lines. It’s true that the landscape is evolving however this should be seen as an advantage, in my opinion.
The affiliate channel is a bedrock of innovation, with great opportunity to test and learn new revenue streams or gain new customers. This can vary from working with a brand-new partner or implementing a different performance tracking set-up, the affiliate world is your oyster! There is also a chance to collaborate with other teams; I’ve seen some really nice synergies among affiliate, social and brand campaigns in the past. In order to survive in a fast-paced environment, a successful programme is proactively managed, with the continual development of tactical plans and new strategies to achieve the desired goal.
3: The channel is too expensive to run
I think the most important myth-buster is on budget management. It can be a common myth that the channel is too expensive to run. However, the affiliate channel operates on a cost per acquisition basis (CPA), which is known to be lower risk than other channels as brands only pay out when a pre-determined action is performed (usually a sale or a lead). Thanks to its low-risk nature, the affiliate channel provides brands with the perfect platform to test and adapt marketing strategies to grow their consumer base and ultimately increase revenue.
It’s also easy to control budget’s by keeping daily, weekly and monthly trackers of your affiliate’s performance. Having this level of detail to hand can allow you to test new campaigns in a cost-effective way, with the result of finding new audiences through a controlled budget. The key metric used to measure incrementality in the channel is ROI, which should be carefully monitored and reported on a regular basis. Commission, tenancy placement costs and any additional fees are all accounted for as part of the cost analysis, with the aim to work towards a target ROI each quarter. Factors which can influence this metric include the number of sale active partners live on the programme, the proportion of sales being generated by the top 5 partners and how regularly you are incentivising them. Monitoring this regularly allows for testing and learning with various partners on the programme; whether this be running an increased commission as part of an incentive or paying a flat fee for onsite placements. By managing the budget with a degree of flexibility, there is the opportunity to test new ways in which you can increase your audience reach, engage with new customers and generate revenue for certain product categories.
There you have it; the most common misconceptions have been identified and explained. Whether a programme has been recently launched or has been in operation for many years, the myths have now been addressed with some clarification, paired with ideas of how a best-in-class programme can be managed. The affiliate channel is an amazing space for collaboration, innovation and it’s cost effective to run. If you have ever thought about exploring affiliate marketing in more detail, now is the time to get involved!
If you’d like to talk to us about how we can help grow your affiliate marketing programme and join other large global brands that are using Acceleration Partners expertise, get in touch with us.