The partnership industry has dozens of networks, thousands of publishers, countless compensation models and an increasing number of potential layers of technology and data that can either drive tremendous insight or add unnecessary complexity. Few people in the partnership industry have their hands firmly placed in more elements of the business than Tom Rathbone. As the former Head of Technology and current VP of Strategic Initiatives at PartnerCentric, Tom oversaw the company transition from a pure service play to platform offerings that integrated cross platform data. Straddling services, product and data while serving industry heavyweights has given Tom unique insight into where the industry is heading and what challenges need to be overcome.
Q: Tom, there has always been a lot of promise around what the affiliate industry could be. What do you think the biggest inhibitors to growth are? A: Lack of control. Big budgets are going to be reserved for those channels where there is a capacity to directly adjust marketing immediately and clearly quantify those results. For all its creativity, the affiliate channel is not (at the moment) what I would call nimble. It can take days for changes to take effect; for example, zombie ads stay live on publisher sites unless they are noticed and the publishers immediately comply with taking them down, etc. We currently hedge against that risk with increased manual preparation on the front end for every single change. There are multiple layers of obscurity between a brand and their customer, and each of those further complicate direct control. That makes things like flash sales, A/B testing and incrementality testing problematic and unattractive. Furthermore, measurement over performance is also not something that can be controlled for many. As it stands, brands operate on the whims of affiliates and platforms/networks. They receive traffic without much insight into origination; they pay based on tracking without much insight into how it was truly tracked, etc. If I were a CMO, I would be concerned about the Wild West that is the affiliate channel. Affiliate marketers historically perpetuated the idea that they were renegades: experimenting and iterating at lightning speed while stretching the limits of tracking and technology. This created a community of old school affiliate marketers. We buck this trend because that attitude doesn't best serve the channel. Q: Why do publishers and platforms/networks have more power in the affiliate space than other channels? Most display publishers are dying to have brands to reach out directly to them. A: Two factors come to mind: the challenge of scale, and again, control. The first is a historical problem — in a channel that typically involves more manual work and relationship management, you need scalable solutions. The networks and platforms have historically been those solutions. But even with consistent disruption of new platforms and networks ( new technology-focused models disrupting the network models, for example), I think we are still seeing a general trend towards commoditization. That will impact the degree of power those entities wield within the industry. Early on, you could choose your network based on the affiliates that were joined to that network. Today, that’s almost never the conversation — as they chased opportunity, affiliates continued to join more and more networks over time. The gaps between platforms are now technological, but those change and commoditize faster. Control is the other factor — since publishers in the affiliate channel specifically make decisions on what brands they feature and how, they have more of a say in the matter. In the display world, they wield less control over those decisions. That's not necessarily a net negative. Part of the benefits to the channel rest in the fact that publishers wield that level of control. Not all use it to great effect, but many of the more sought after publishers do. Some of the publishers that once held a significant amount of control (the early “darlings” of the channel, like coupon and loyalty sites) lost a good deal of that over the years as the brands’ demands pushed towards the content publishers. That has caught up, and the upper funnel contributors are really starting to shine. But we still see instances where publishers can gain a significant share of customer eyeballs and use that to their advantage. Q: Doesn’t all that manual up front work add to the cost of the channel and inhibit scale? A: Most of the industry (on the services and management side) suffers from the historical shortcomings of a lot of agency/services work. You need to bring on team members in parallel with the top line. That's not how businesses are used to running these days, where typically they are able to bring in more automation and achieve economies of scale. While some degree of automation is achieved, it’s mostly operational. The core functionality of the channel, which is recruiting, developing and optimizing relationships, continues to suffer from a lack of available automation. This is why programmatic, search, email, etc. grew so quickly and affiliate continues to be the laggard. PartnerCentric focuses on that efficiency and the automation outside of operations. How much of this can we continue to chip away at as an agency? By determining the value of opportunities proactively and predicting performance via machine learning (something the programmatic crowd is used to enjoying) and removing the barriers to entry that platforms and networks hold. Those barriers allow for better relationships,ongoing visibility and effective action that directly impacts the quality of the brand positioning and traffic.. Someone once mentioned to me how a lot of marketing actually works to distance brands from their customers, and I think that's absolutely true. All the platforms designed for scale also insert themselves between customers and brands, creating uncertainty and weakening the connection between company and consumer. That results in a of lack of control and lack of transparency. If we're able to provide that level of automation and efficiency without sacrificing proximity to customers, then we'd really be onto something. Q: Until we reach The Singularity someone has to aggregate the audience and provide tools to reach them. What is it about recruiting and managing affiliates that makes it different and less automated than say programmatic? And, to make the question difficult, how do we fix that? A: Again, back to control (sensing a theme here!). We have taken on client after client that had left their affiliate channel on “cruise control” — accepting any and all publishers into the program automatically and granting them access to promote them with whatever means they decided to. While that’s pretty automated, those results are generally sub-par and can result in very costly issues. That’s a lot of risk for something that is adding little value. So to fix that, we can look at those areas where “automating” it goes awry:
Traffic fraud such as cookie stuffing, bots, pop ups, click farms
There are, of course, plenty of other barriers, but those are some of the biggest challenges. Affiliates are very creative and industrious, but their business models aren’t built solely on adding value to the brands in the space. It’s great when that aligns, but it’s not a realistic expectation. So we need to be able to automatically maintain quality controls over brand compliance, traffic, and perhaps the greatest challenge, integration of the specific value each publisher brings into the overall customer experience. The breadth of value is a huge challenge. Q: Should affiliates look to sell to more than the marketing channel? Should sales leaders consider affiliates part of their channel? A: That’s an interesting question. In reality, the three-part venn diagram between marketing, sales and advertising (maybe a fourth bubble for public relations), has a significant amount of overlap. I wouldn't say that affiliate belongs in one department over another. If we're looking to make that distinction, it's about goals and intent. If a brand is happy with the bottom-of-the-funnel work that a mis-managed affiliate historically provides, then yes, I think it could make sense for it to live closer to the sales department. However if you're looking to leverage affiliates for the top of the funnel, the category probably belongs within the public relations or advertising departments. To an extent, the affiliate channel kind of suffers from its own multi-disciplinary options and can be hard to categorize. If the status quo of the industry were to maintain itself as more focused on the lower funnel, then yes, it could be more akin to sales. But with the push towards differentiation and (at least with ourselves) a push towards disrupting that status quo, I would say that hypothesis could become less relevant over time. Q: Let me ask that another way: Are we making a mistake of thinking of affiliate as a channel, akin to branding and direct response, which have clear KPIs, when in reality it's a tool that can be leveraged in any channel and each of those channels requires different skill sets? I think that's been an angle most affiliate marketers have been taking for a number of years — seeing as affiliate marketing isn't a tactic, but a model where we have a great degree of diversity. In a perfect world, you would be able to utilize affiliate marketing per channel, i.e. the search team would leverage affiliates, the content team would, etc. As it stands, affiliate is considered its own channel. But when other channels have clearly defined tactics and affiliate does not, it's an apple versus oranges scenario. Coupled with the fact that each affiliate generally utilizes several tactics in their promotions, it’s even clearer to see the inefficiencies of a marketing approach that is siloed and not integrated. Q: We spent some time being critical of a channel I know we both think is great. Let’s switch direction for a minute: what are the industry trends that you’re most excited about? A: For years and years, the value pitches in the industry spoke to much of what we talked about here, mainly about how affiliates can be used across so many tactics. And that was hard to realize with the brands. In the past couple of years, we’ve seen that demand for content and that pitch for multiple tactics start to take shape. It’s been really great for the channel as the quality of publisher opportunities has increased so greatly. That’s ultimately a positive for the brands and proves that the dam is starting to break. I think this is further exacerbated by a decline in confidence of some other channels. We’ve long encouraged and promoted industriousness, creativity and agility amongst publishers. That’s a hard thing to grasp quantitatively, but we feel our work has always proven those as our core goals. Brands are catching on.
Tom Rathbone, a veteran of the industry, oversees PartnerCentric's technical strategy, analytics, and strategic initiatives to propel the company into new areas of growth as it challenges the status quo. Tom is the strategic vision behind the PartnerCentric "Control Suite" products, including the development of proprietary data and the invention of PartnerCentric's patented attribution solution.