Yesterday I laid out the rather unsettling truth — how affiliate marketing has evolved from something sexy that every brand “must have” into a “necessary evil” strategy. Everyone from state politicians to marketers themselves have piled on to create problems for the performance marketing industry. With this in mind I ask…
How can marketers work to grow affiliate-related revenue, new customers and better quality leads in a world that’s already decided “fewer affiliates are better?”
Today, I’ll report on how some brands are boldly going where few have gone before with affiliates, to ring the cash register and create better leads. Now I know there are more stories out there so let’s hear more stories in comments… yes?
Clashing Strategies
Direct marketers (in particular) are becoming increasingly proficient in Web strategies like search. And this means they increasingly find themselves butting heads with their own affiliates — many of whom already have staked out valuable digital turf.
So is it worth playing nice with affiliates? If so, how can marketers maintain healthy doses of affiliate-generated sales while maximizing incremental revenue and avoiding cannibalization of existing search campaigns?
These questions have no easy answers. The competitive search environment is leading many marketers to prefer Web affiliates that send incremental visitors — those resulting in sales or leads that otherwise may not occur as a result of marketers’ own efforts.
Armed with affordable, easy-to-use Web marketing analytics packages, marketers are having an easier time gaining the vital understanding needed to produce such cravings for efficiency. In the end, marketers are hoping affiliates can bring them customers or leads that they, themselves, cannot access.
Marketing Channel Attribution
As if there weren’t enough issues there’s now another: channel attribution or “scoring” for what marketing strategy caused the eventual sale and to what degree.
Marketers (retailers in particular) increasingly realize that shoppers click around and touch multiple marketing campaigns before purchasing. A customer initially may be referred to a site by a paid search ad. He/she may then return to the site via a comparison shopping engine and then again through a CPA affiliate, at which point he uses a promo code from a direct mail piece — generating four distinct (often unconnected) points of marketing cost.
Affiliate programs are sometimes targeted — with some marketers reconciling affiliate program performance with the influence of various other marketing channels customers come in contact with (as part of the path to purchase). This has caused quite a ruckus as well. Some marketers have been practicing “zeroing out”/negating affiliate commissions — sometimes transparently and sometimes not.
But marketers say the only thing they’re zeroing is zeroing-in on cost efficiency — moving beyond a singular goal of increasing sales or leads. It’s rather ironic if you think about it considering that the channel works on pure performance (unlike others). It’s also most often the channel that delivers the “last touch” (last click) before the customer transacts.
But this “last click” is often precisely why affiliates get dinged. Brands tend to see the associated cost as somehow “extra” or inflationary. As an example, an instance where a coupon gets redeemed in addition to the affiliate commission… occurring within 12 hours of an email to the marketer’s list. What actually prompted the sale and to what degree?
More and more brands are wanting to know what works, why and how they can “turn the dials” to create more buying behavior. Not to mention achieve a smaller cost to return each online sale. This is a marked change from the more “hands-off” practice of years past where efficiency was all but blindly assumed.
But is such an analytical approach necessary or beneficial and to what degree? Doesn’t it fight a more holistic approach to Web marketing?
Experiment, Share and Manage Risk
What’s the secret sauce for affiliate marketing success in these trying times? In a few words: investment and risk. Breaking away from the pack is a factor of how much risk brands are (or are not) taking in forming deeper partnerships with affiliates. Higher risk tends to yield higher payoffs: more new customers and incremental leads.
As an example, affiliate management company AMWSO used an award-winning video approach to drive sales for conscious goods marketer Gaiam. The focus was balanced across large and small affiliates. Similarly, Paul Moss, of Moss Affiliate Marketing’s approach at Insurance.com involved selectively underwriting affiliate search optimization efforts.
I say again underwriting affiliate SEO efforts. Truly bold and gutsy.
Both AMWSO and Moss’s firm are using a highly measured approach to ensure ROI — one that involves data-sharing with affiliates. This isn’t un-measured or renegade. And it’s not an affiliate versus marketer situation. This is true teamwork where marketers actively outsource to affiliates in areas that they don’t want to hold expertise in, yet gain value from associating with a affiliates that do.
“Optimization of campaigns cannot occur in a vacuum — it’s a team effort,” says Chris Sanderson of AMWSO, who agrees with Moss that marketers who take a cautious, yet trusting, view of affiliates see better results.
Use New Tools
Marketers and affiliates have begun to use tools to leverage online social media — video, images, blogs and various, easy-to-use publishing platforms. New tools like PopShops.com — hailed as the largest searchable collection of affiliate products — are building blocks for innovation, offering opportunity to affiliates and advertisers.
According to ValueClick Vice President of Corporate Strategy John Ardis, most marketers hold back on providing affiliates with the simplest of tools. In a recent conversation with me he cited giving affiliates the ability to “deep link” (bring visitors directly to product pages) on e-commerce sites.
“A great many marketers are not fully realizing what’s available to them today,” Ardis says.
Make Change: Traditional and Experimental
How can marketers work to grow affiliate programs in safe ways that make sense?
“Set affiliates up as an extension of your company — so they’re complementary. Yes, some cannibalism will exist, but it’s foolish to think you can overpower the Internet and don’t need affiliates to achieve comprehensive coverage,” says Moss.
Growth and expansion go hand in hand with expansion into social media. But we cannot forget bread-and-butter strategies: search marketers, landing page optimization affiliates, the tried-and-true stuff. Some brands are diversifying their affiliate bases in traditional ways that involve rolling up sleeves and interacting with larger numbers of smaller affiliates.
Based on my research to pull together this story, it’s important to note that there’s no silver bullet here. This involves work — contacting potential affiliate partners using e-mail, instant messaging, Facebook, telephone, etc. Some marketers are focusing on a larger group of smaller affiliates. The goal is to grow the affiliate base and take advantage of emerging social networks. These are the brands to watch.
Even with limited tools and staff, some marketers are quietly investing in grassroots approaches that involve rolling up sleeves, “dialing and e-mailing for dollars.” It’s good, old-fashioned work with less reliance on large affiliate networks for new partners.
Looking forward, social media’s role remains unclear, although we’re seeing early participants.
Ultimately, some suggest we’re on the cusp of a customer recommendation-based model that looks like affiliate multilevel marketing — turning everyone into an affiliate. Witness Amway’s Fanista, ToldYa.com and RadicalBuy.com as early signs of scalable recommendation-based affiliation.
Buzzillions.com hails itself as a Web site of “product reviews from people like you.” This affiliate collects and displays customer reviews — from individuals verified as actual buyers of the products — provided by participating advertisers, like Staples and Zappos.com. Buzzillions.com’s goal is to help consumers make educated purchasing decisions.
“We’re in the business of putting an end to buyer’s remorse,” the Web site claims.
And let’s not forget Alvenda and their pilot client, 1800Flowers over on Facebook.
According to experts I’ve spoken to lately, given new Web 2.0 technologies, more people than ever are publishing their opinions online. As this trend continues, we won’t see a few affiliates rise to the top but, rather, a large base of new affiliates continually emerging.
This, they say, is reality. And ignoring the ‘long tail’ of affiliates is becoming a thing of the past. What do you think?
Here is the original:
Affiliate marketing: Redeveloping An Underdeveloped Channel Part II
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