The affiliate channel typically focuses on discount shoppers and therefore operates at the bottom of the marketing funnel. As a result, its budget allocation is often smaller than other channels.
Lately, a broader set of publishers have monetized the channel through improved tracking and payment technology. Commerce content, reviews, influencers, and legacy publishers now drive significant revenue from affiliate partnerships with brands. The result is a larger, more diverse audience for affiliate marketers to access. Successfully accessing these audiences requires improved audience segmentation and messaging. If done correctly, this broader audience can be an introducer, a new customer aggregator or brand enhancer, allowing the channel to compete for more budget.
What Has Changed in Affiliate Marketing?
With the continued expansion of new publishers and advertisers in the space, affiliate marketing spend continues to increase each year. There are three main factors driving this rapid channel growth:
Tracking. Sophisticated tracking platforms have enabled an explosion in the number and variety of publishers and content by increasing transparency within the digital marketing landscape. More publishers have joined affiliate marketing platforms to gain direct access to the brands they want to promote, which increases the reach of new audience targets. This increase in patronage includes anyone from a coupon site to an individual influencer who wants to promote a product they bought and track the performance of their efforts. The highest-growth partnership categories include loyalty programs, large content entities, and mobile enablements.
Mobile Buyers. With mobile-based purchases becoming increasingly simple, so has the propensity for consumers’ to make purchases from their device. As consumer mobile purchases continue to grow, brands and publishers focus on mobile targeting and driving users to in-app purchases.
Presence. Some of the largest content entities are now omnipresent in the space. They work with brands that want to amplify their reach and those who also want to attract new customers.
How Changes Are Affecting Affiliate Marketing Programs
When we take a deeper look at how these changes are being implemented into affiliate marketing programs, we’re seeing examples from brands in all verticals expanding their reach in the channel. Some of these new strategies include:
Targeted messaging and pricing to segmented audiences. As digital marketing expands, so do the need to keep your customers engaged. Brands will always want new customers but it’s also important to keep current ones coming back. The affiliate space has advanced in a way that supports both efforts. We’re seeing this done through targeted content to attract new users and retargeting consumers who have clicked on an ad but not purchased within a certain time-frame. Many publishers have robust consumer data insights they can use to tap into in order to target new or lapsed customers with a specialized offer that is greater than what a repeat customer would see. They can see historical purchase data with consumers’ linked credit cards to identify what price points might attract them most and segment that targeting accordingly.
Incentivizing consumers to take action by driving leads at the top of the funnel. Loyalty partnerships can be great at closing a sale but they also offer opportunities to drive brand awareness with the sheer volume of consumers they are attracting. Their reach and scale now allow brands the ability to have a store page on-site, to be included in targeted audience emails, and to incentivize the purchase of a new product by offering a reward. For example, Prodege is a publisher that sees great success with these campaigns because they are able to incentivize actions with user points to visitors that have purchased from a competitor store page or shown interest in the category you are promoting.
Content partnerships like CNN Underscored and Hearst Media. Many affiliate marketing practices are now starting to overlap with PR and media opportunities that support brand awareness on a pay-for-performance model. The affiliate channel becomes more attractive because it offers a straightforward way to track article performance and report on that performance. This is coupled with a payout model that can keep costs down.
The Bottom Line
It’s important to understand the drivers of the growth in affiliate marketing. The data for growth will help you decipher not only what affiliates have the largest reach, but what differentiates them.
Opportunities have been created for new ways to successfully utilize the channel, and the emergence of channel marketing has created a proliferation of niche publishers. These focused publishers allow for more targeting, thus creating a higher brand value and a more sophisticated use case for affiliate marketing. This value is in comparison to merely addressing discount shoppers.
Increasingly, we’re seeing the channel being used for marketing higher up the funnel, where it can build brand awareness, generate leads, and drive incremental program growth.
Lyndsey is a Director at Streamline Marketing where she oversees a diverse portfolio of clients. Her career has focused on growing affiliate partnerships, utilizing data to make strategic decisions for consumer brands, and driving incremental growth.