drives – Affiliate Marketing Programs

Forgive me in case I’m stating the obvious at this point, but the rise in ‘guilt-free’ shopping during the pandemic funded by the discretionary spending saved through the absence of social spending has accelerated growth in ecommerce demand. Recalibrating the priorities from pints to Pilates matts and lunches to loungewear during the pandemic has seen trends shift and habits permanently adapt to a way of purchasing brought about through restriction. What we’re now seeing is while consumers are now able to shop in store, the online marketplace has had an irreversible light shone on it, which highlights the ease of a frictionless shopping experience that most of us can’t give up. This was highlighted by December 2022 setting a record for ecommerce shopping in Australia.

As a result of these landscape changes, the tandem workings of ecommerce and media performance have further built on already huge demand levels for lower-funnel focused marketing activity. The performance partnerships space has not only seen a 26% rise in affiliate marketing related services in comparison to 2021 (Influencer Marketing Hub), but it’s now reached an approximated value of $13bn globally (Influencer Marketing Hub). Domestically, affiliate/performance partnerships budgets increased by 69% YoY (IAB) with retail and fashion leading the way in industry adopters.

So what are the benefits of allocating your media budget to the performance partnerships space and what are the things marketers should consider? There are 7 cornerstone fundamentals for any successful affiliate campaign, specifically covering the benefits, expectations and the things to look out for;

1. ‘How do we know if someone actually bought it?’

Ah-ha but we do! In a marketing discipline where robust tracking is integral to success, the rise in sophisticated platforms like Impact, Partnerize and AWIN allow for definitive results to be viewed and attributed to specific channels. Given the majority of performance partnerships activity is measured to last click, it’s a channel that provides a high degree of confidence in knowing if a campaign drove purchases.

2. Guaranteed and measurable ROI

These aren’t just nice to have – they are critical. Purchasing on commercials that are paid out against a pre-qualified action (i.e. a sale, lead, approved account) allow for the definitive measurement of the ROI and ROAS driven from a campaign.

3. Low risk

By working to performance outcomes, we’re measuring the partner’s media to definitive success metrics and only paying once those metrics have been achieved. It’s about as risk averse as using oven mitts to pick up a hot cup of tea.

4. These are environments your customers will be going to anyway…

Positioning the brand within environments with large numbers of in-market consumers with purchase intent can only benefit sales. If your customers are going to be there – it makes sense for your brand to be there. If you’re not, it may create an opening for competitors to target these potential customers. Therefore, it is important to consider the potential impact of your brand’s absence in these environments.

5. Brand advocacy through established voices

Partnering with authoritative sites that have developed and fostered a trusting relationship with their respective audiences to co-sign an offering generally only strengthens the intent in a consumers mind. All of which is only paid for if said customer goes on to make a sale, how good?!

6. Diversity

As the ecosystem expands, more brands are entering the partnership space, leading to a diverse range of partnerships emerging. In addition to traditional affiliates, alternative partnerships such as performance-based influencer collaborations are becoming increasingly popular. Non-competing but relevant brands are also teaming up to create marketing proposals with a shared goal, measured by performance. This trend has fostered a culture of innovation, with many creative opportunities available. The potential for innovation is at an all-time high.

7. Control

Contrary to a historical narrative around affiliates of ‘doesn’t this just cannibalise existing performance activity’? The performance partnerships discipline can actually assist in establishing campaign-wide hygiene practices that improve the entire media mix. The control afforded by having commercial deals in place with publishers and advocates means stipulations around areas like brand bidding can be enforced, reducing the impact on SEM. Alternatively, the majority of the previously mentioned SaaS platforms have the capability to measure cross-media attribution and assess the impact each channel is having on the overall business objective. This provides a lens into understanding the incrementality of the channel and the interaction effects with other channels (It wouldn’t be a media conversation without the discussion of attribution).

What it comes down to is, the performance partnerships space provides brands with a chance to achieve incremental growth with limited risk. It should be noted, however, that this approach is not a replacement for existing media channels, but rather as a complementary avenue. Far from cannibalising other channels, it can potentially unlock alternative revenue streams and facilitate scalable growth by leveraging the sustained shift towards e-commerce demand.

Callum Wingrave is head of performance partnerships at Mindshare.