Helen Southgate, UK managing director at Affilinet, considers the role of affiliate networks in the changing performance marketing landscape.
When I started out in affiliate marketing over a decade ago, life was relatively simple. If you wanted to run an affiliate marketing programme then you went to an affiliate network. Job done. But fast forward to now and advertisers are presented with a confusing array of possibilities – take it in-house, run with their current digital agency, use a specialist performance marketing agency or opt for the traditional affiliate network approach.
I think that the market is big enough for all of these players, but what is important is that advertisers understand how they vary. If you go down the wrong road for your business it can have a detrimental impact not only on your affiliate activity, but your digital marketing as a whole. Clearly the right option for an advertisers’ business will depend on what they are looking to achieve with their affiliate programme and how that complements the wider marketing mix.
All too often people get tunnel vision and view affiliate marketing in its own little bubble. But it can only be truly effective when integrated with other digital and offline activities. To create a sustainable, valuable programme you need experts within the field who not only understand the channel but how it sits within the wider marketing mix. And that is where I believe networks add the most value. A key role of the network is to truly engrain itself within the advertisers business and understand its digital and overall objectives, whether they are chasing a sales number, a certain type of product or seeking to drive incremental sales.
Growth of all kinds, especially the sustainable sort, needs a clear strategy that isn’t reliant on a few affiliates or a certain type of affiliate activity. This takes time, technology, resource, expertise, intelligence and a passion to deliver – all characteristics found within an affiliate network. What should networks deliver? In my mind there are three key things that any affiliate network should do:
1. Provide an ROI optimised approach to building a sustainable and valuable affiliate marketing programme
2. Ensure end-to-end quality not just in terms of the publishers that advertisers work with, but also with regards to the acquisition of customers and the value of those customers
3. Offer strong, basic, reliable and future-proofed technology
Within the context of how the affiliate landscape has developed in recent years, the last point is an interesting one. There are now a number of technology companies providing off-the-shelf affiliate marketing solutions. Whilst we should always be pushing boundaries and innovating within the affiliate space, technology alone is not enough to deliver an effective affiliate marketing programme. Nor is technology any use without the people to drive it.
You could argue that as an MD of an affiliate network, of course I would say that. But whilst I’m clearly an advocate of the affiliate networks, I have worked both sides of the fence, both at a network and at an advertiser, BSkyB. My opinion is that yes, technology is important, but for most advertisers and publishers the basics are enough.
What makes that technology powerful is people – individuals with expertise, experience and creativity to mine data for insights, uncover untapped publishers and encourage advertisers to be bold. An off-the-shelf solution might seem cost-effective at the time, but in the long term it simply doesn’t give an advertiser the insights and knowledge they need to understand their customer and drive growth through the affiliate channel.
Advertisers sometimes think of affiliate marketing as a ‘cheaper option.’ But this isn’t the case, and networks have a role to play in underlining the value that the channel can deliver. Good people cost money. But like all good things in this life, good quality is always worth the investment. And certainly advertisers should see an ever increasing return on investment, not just in terms of sales but also in the quality of their team, the strategic recommendations that a network makes and proactive ideas about how the programme can be improved.
Often networks can baulk at the idea of offering a premium service, yet having worked advertiser side, I can assure you that I certainly wouldn’t have turned down the opportunity of driving more, high valuable sales at a slightly higher cost. Especially if the alternative was a stagnant programme that wasn’t growing and was reliant on just a few publishers. As with most things in life, you get out what you put in. Everything comes back to the simple calculation of ROI.
Of course each network will have a different opinion about their role, but what I’m saying is that the art of performance marketing is about many factors, not just one, and that networks are best placed to bring all the pieces of the puzzle together because this is their only focus and their bread and butter.
Networks are unique. They cannot be sidelined as they would be within an agency that delivers the majority of its revenue through search and display and neither are they a simple technology solution. They simply do affiliate marketing really well.
This piece was first published as part of The Drum's performance supplement on 30 August