How the Fibonacci sequence plays a part in your affiliate program launch

This promoted content is produced by a member of The Drum Network.

The Drum Network is a paid-for membership product which allows agencies to share their news, opinion and insights with The Drum's audience. Find out more on The Drum Network homepage.

The Fibonacci sequence can be used in almost all aspects of life and affiliate marketing is no different. It is a mathematical formula used to predict the behaviour, growth or decline of many things in nature or even the stock market and financial indexes.

I use the Fibonacci sequence as a simple example to explain the measure and framework of an affiliate program launch and how to measure performance. If you’re not familiar with the Fibonacci sequence you can read about it here.

How does Fibonacci number sequences apply to affiliate marketing?

It’s actually quite simple. One of the most common questions I get asked by clients when embarking on an affiliate program launch is “How will my program perform and what ROI can I expect in the first few months”. As an agency we are often asked this question when clients invest in new channels. The truth is this is really hard to answer as results are based on a number of constantly moving factors both internally and externally in the competitive landscape.

This is the point where I explain what happens during a program launch, the framework that we follow and how that ties back to the Fibonacci growth sequence. The key thing to understand about affiliate programs is that they take time to build momentum and deliver a profit. If you are investing in an affiliate program to expand your brand reach and drive incremental growth to your business you’ll need to understand how this process works, and what to expect.

It takes time to recruit publishers and build trusting relationships with them. This is one of the hardest steps to get right after selecting your technology or foundation platform to which your affiliate program is built upon. Affiliate recruitment is one of the hardest parts of an affiliate program marketer’s job.

Just because you launch an affiliate program doesn’t mean anyone is going to queue up outside your door to join it. Depending on the strategy and marketing plan you have put in place to help you launch in this channel, it could take months to build momentum. So, it’s key that your client understands this is a long term game plan for their business at the start.

Typically, a new affiliate program would take between nine and twelve months to start paying any dividends after the costs and expenses of set up, marketing and promotion and agency fees are taken into account. If you use an expert agency or consultant well versed in affiliate marketing strategy you can of course deliver results a bit quicker.

Each step you take during the launch requires time to bed in, test, analyse and optimise for better results in the next phase. Launching an affiliate program is a bit like a science experiment, you have to get the raw ingredients mixed just exactly right to ensure you deliver the best results.

Below I’ll map out the simplest of frameworks we follow to help affiliate programs launch. I’ve also numbered these steps so you can see the growth curve we expect at each stage in accordance with the Fibonacci sequence.

The Fibonacci Key as it relates to a typical affiliate program launch:

Phase 1: Planning

This is where you decide key objectives for your program in relation to technology, whether you use in-house or network offerings, evaluating your program pricing, implementing your service models and establishing SLA ‘s and resourcing.

Phase 3: Integration

Here technical integration and customisations begin, and your program framework is set up to allow affiliates to be onboarded.

Phase 6: Technical

In this phase you’d be tweaking a lot of campaigns, traffic sources and affiliate offers, this is very much a recruitment and outbound marketing period to build momentum, visibility and trust in your affiliate program offer.

Phase 9: Trust

Now you will start to see some revenue growth (after investment costs to get this channel started). Campaigns and publishers will be testing your offers and seeing how you convert. You’ll be analysing data and optimising campaigns and tweaking delivery. You’ll start to build solid relationships based on trust and get access to more of your publisher’s traffic sources and placements on their sites as they begin to work with you and benchmark you to competitors.

Phase 12: Scale

At this point you would know how your offer and program benchmarks to the rest of your competitors, you’ll have key partnerships established and you’ll be seeing incremental growth and revenue ROI on the relationships you have. Recruitment and promotion remains a focus point in this phase.

Phase 18-24: Growth

By now - you will be looking for ways to grow your program, add new products, open new regions and continue to increase affiliate partnerships to expand your brand reach

Phase 36: Sustain

Here you’ll start to innovate to obtain new growth segments. Sometimes agencies will be brought in to do optimisation and strategic customisation to your platform and you’ll start to look at ways to grow your affiliate channel strategically along with your other marketing functions

Affiliate program strategy - is a skill

Affiliate programs don’t skyrocket upward as soon as they launch.

There is a methodical process that is required to build a sustainable affiliate program which can help your business increase brand reach and build sales momentum. It's vitally important to make sure you understand all the moving pieces and that you ensure you have the support, tools and resources you need to make the best start.

Asking an affiliate marketing expert can really make the difference to how your program delivers real results. You need to think of your affiliate program as if it’s a new home being built. Every decision you make in the start up and planning phase can impact your end profits. If you overpay for resources, raw materials, and don’t have a proper plan to get you to the end result, it impacts the project's profit at the end.

You also need to constantly be watching the environment around you to benchmark yourself against your competitors. What are they doing that you aren’t? You should always be introducing something that makes you stand out and make sure your affiliates are seeing you regularly, and hearing about your program offers and benefits too. Your marketing plan is just as important as your launch and you can use this to ensure you hit profitable targets as described in the phases above.

In summary, although affiliate programs may not be easy to start, or grow in a linear fashion, they will deliver profit over time due to the nature of the commercial modelling. Your affiliate partners will want to deliver incremental sales and if you engage them to support your business to scale, they can have a very positive impact on your revenue over time. I’ve been launching affiliate programs for the past two decades and have seen this delivered over and over again.

If you follow the right actions, commit to a proper plan and follow the Fibonacci sequence modelling to launch, you will always be successful in affiliate marketing.

Lee-Ann Johnstone, affiliate marketing expert and digital business coach​

Join us, it's free.

Become a member to get access to:

  • Exclusive Content
  • Daily and specialised newsletters
  • Research and analysis

Join us, it’s free.

Want to read this article and others just like it? All you need to do is become a member of The Drum. Basic membership is quick, free and you will be able to receive daily news updates.