It’s important to have clear targets in place when considering affiliate marketing, whether a brand’s primary target is increasing sales, growing brand awareness or driving traffic, according to Christie Rae and Hope Walker
Affiliate marketing is a core channel within the digital marketing mix, though it stands out as a purely performance-based element of any successful digital marketing strategy. One or more affiliate partners are rewarded for any traffic or conversion that they drive with their own marketing efforts – and reward parameters are completely dictated by the brand. This makes affiliate marketing a popular ‘shared success’ strategy – and a very beneficial one for both brands and affiliates.
As the most widely recognised, vouchers and cashback sites are two of the main strategic partnerships often associated with affiliate programmes, but they generally only provide quick-wins and generate sales that were highly likely anyway. It’s equally important that brands take other methods, such as B2B partnerships and social influencers, into account when establishing an affiliate ecosystem. This ensures a healthy affiliate mix and can be used as the basis for a robust, well-rounded approach.
At its core, the affiliate channel is simply a means of managing partnerships. Whatever a brand is hoping to achieve, an effective affiliate programme can deliver it through these valued partners. Building partnerships with influencers, raising brand awareness in new territories or boosting sales by providing limited discounts to a select network are just some of the possibilities available through an affiliate programme.
Then vs now
Historically, affiliate marketing has been associated with cashback schemes, voucher codes and discounts, meaning some luxury brands have been hesitant to engage with the channel due to fears around brand reputation. In the age of blogging, social influencers and Instagram, however, we’re seeing more and more brands starting to investigate the benefits of affiliate marketing programmes.
Current market landscape
The sector itself is now worth over $12 billion globally, and is expected to grow by 10% in the next few years. A 2016 report by Forrester Consulting revealed that 81% of brands and 84% of publishers leverage affiliate marketing channels as part of a wider marketing strategy. Content partners are a key strategy to leverage through the channel, and content marketing costs were gauged to be 62% of traditional marketing schemes, while generating three times the leads of traditional methods.
Authority Hacker, a marketing education platform, also reported that affiliate marketing programmes now generate 15%-30% of all sales for advertisers; brands see an average of 23% of their revenues coming from affiliate marketing. A well-managed affiliate programme will also help bring products to the mobile generation, with 50% of traffic referred by affiliates coming from mobile devices.
So, why affiliate marketing?
The affiliate marketing channel is a proven sales tool and can provide additional support to wider marketing goals. An effective partner programme can elevate brand awareness, aid content generation and support SEO – as well as being a sustainable source of strong ROI. Brands can tailor each programme to meet specific goals, with tiered commission structures tailored around action such as new customer acquisition, the sale of specific products, and the type of purchase method (in-store POS vs online).
The nature of affiliates means that brands can’t take a scattergun approach. The product must be relevant to the affiliate and their audience, otherwise the channel loses value. Because of this, brands that build strong relationships with partners in relevant spheres will see a rich mix of affiliates, meaning they will never be reliant on one publisher or partner. A robust, strategically-built affiliate marketing funnel will support every stage of the customer journey from inspiration through to purchase, boosting online sales.
Case study: how establishing an affiliate marketing channel with an emphasis on brand awareness and blogger outreach enabled a brand’s sustained revenue growth
Sector: Retail
Challenge: Launching an affiliate programme in a new European market, while sustaining revenue growth.
The brand is a luxury, online-only merchant focused on creating the ultimate online destination dedicated exclusively to accessories. The company already had an established, successful affiliate programme in the UK and was looking to launch and nurture a new programme in Germany.
Silverbean was tasked with sustaining revenue growth for the brand as the affiliate programme was developed.
Strategy and tactics
It was important to leverage key existing DE relationships and nurture new partnerships in the run up and throughout the programme launch. By working with a German-based PR agency specialising in influencer management, the team engaged with and gifted key bloggers in the German affiliate space to encourage product blogs and reviews. The team also identified Weibo as a key platform, and signed up a number of Weibo affiliates in Germany to target the platform’s community of wealthy Chinese families and students and promote the brand’s offers and deals.
The Silverbean team also ensured that relationships with key bloggers were leveraged, using the rewardStyle dashboard. The team accurately pinpointed potential new affiliates and influencers to engage with, and developed a ‘reach out’ plan.
Along with the focus on influential bloggers and quality content, the team launched a small scale campaign with top voucher code and cashback affiliates within the German space. This allowed the brand to harness the large audience these sites offered access to, while defending and maintaining brand protection.
The results
- The brand saw a revenue increase of 313% year over year (YOY).
- 30% of the brand’s revenue in Q4 was generated by content and lifestyle affiliates.
- Over 20% of the brand’s revenue in Q4 was generated by Weibo accounts targeting wealthy Chinese students and families residing in Germany.
Other retailer results
- One online retail brand achieved a revenue uplift of 105.2% over a 12-month period, with over 12% of sales generated via its affiliate programme.
- Another brand saw a 62% increase in revenue year over year in the first three months of partnership.
- Another retailer saw a 60% increase in orders and a 38% increase in sales.
Implementation
Brands looking to implement affiliate programmes can see major benefits from working with agency partners. This gives them access to an agency’s (often considerable) knowledge, expertise and pre-existing relationships with affiliate partners and publishers. Agencies can identify areas that are missing in the partner mix and maintain upper funnel activity to ensure a programme isn’t reliant on quick-win or short-term tactics to meet KPIs.
So what does an agency process look like? At Silverbean, the initial steps look like this:
Recruit
The affiliate team looks to identify any gaps in an existing affiliate programme and any key publishers (such as influencers, cashback sites, employee benefits packages) that may be missing. Then, the team outreaches to those key publishers.
Engage
If a brand has publishers that are already on the programme but aren’t driving sales or traffic, the team starts to work with those partners to improve their engagement.
Amplify
Where affiliate partners are successfully driving sales, leads or traffic, we work with them to amplify and uplift their results.
Often, clients start with a revenue-based objective. As the foundations are laid, the team looks to identify wider brand objectives and opportunities, such as driving strong brand awareness. They then work to build a robust strategy to achieve these brand goals, while also supporting the client’s internal marketing team.
Final thought
Managed and monitored proactively, an affiliate marketing programme allows brands to benefit from a new revenue stream and build relationships with key influencers.
For many brands, choosing to partner with an agency to develop an affiliate marketing programme allows them to benefit from the agency’s considerable expertise and existing relationships with influencers, businesses and other partners. It’s important to have clear targets and a commission system in place before affiliate partner outreach begins, whether a brand’s primary target is increasing sales, growing brand awareness or driving traffic. This means that effective affiliate partners will be rewarded for their efforts and encouraged to engage further, and the brand will benefit in kind.
Christie Rae is Content Manager and Hope Walker is Affiliate Marketing Manager at affiliate and partner marketing organisation Silverbean
