Author, Stuart McLennan
Affiliate marketing is the perfect marriage of marketing and e-commerce, making it an ideal channel for brands to reach consumers who have turned to online shopping amidst COVID-19 restrictions
Affiliate marketing is one of the most misunderstood digital channels, but during a crisis, it can be one of marketers’ deadliest weapons. For two decades, the channel sat outside the CMO’s traditional toolkit and was typically viewed as a strategy that could not efficiently and effectively scale, because advertisers were required to manually broker deals with publishers.
But times have changed and affiliate marketing has evolved significantly in the last five years. And as the COVID-19 pandemic sees e-commerce sales soar, brands are in a prime position to use affiliate marketing to divert screen-fixated consumers to their sites without intrusion or major investment.
For those that are new to the channel, affiliate marketing forms partnerships between publishers and brands via affiliate networks; the publishers are able to monetise their audiences or content by earning commission payments for sales they refer to the brands they are partnered with. If you’ve ever shopped through a cashback site, or bought an item of clothing off the recommendation of a fashion blogger, it’s likely you’ve engaged with the channel without knowing it.
The channel has often flown under the radar, however, advancements in technology and automation have increased adoption of the affiliate channel and driven not only revenue growth for brands and publishers, but increased recognition of the value that the channel plays within the marketing mix. And, in the current climate where marketing budgets are tight and every dollar is being scrutinised, truly performance-based channels such as affiliate marketing are shining.
What you spend is what you get
New affiliate commissioning technology has made tracking those dollars and cents easier than before. Brands have the option of offering different commission rates on different customer types, products or categories, giving them tighter control of costs and, at the same time, offering transparency to publishers on how to build their commissions.
In this respect, affiliate marketing stands out as the only channel whereby commissions and spend can be directly tied to a retailer’s business objectives and return on investment, resulting in improved margins, new customers and a seamless shopping journey — all without the intrusion and expense of banner ads.
Within the parameters of data privacy regulation, publishers can also now access behavioural and shopping insights, and even a brand’s CRM data, to provide a tailored customer experience to a variety of different consumers.
This personalisation is making the channel more effective for both advertisers and publishers, and benefits the end consumer who now, more than ever, expects targeted and relevant advertising messages. It is the route many publishers, such as Buzzfeed, have chosen to pursue as an alternative to aggressive and intrusive banner ads.
Personalised audiences at scale
Commissioning technology and personalisation are not the only areas to have seen innovation with affiliate marketing. Brands now have access to advanced scaling and automation tools which replaces the ineffective and manual process of distributing thousands of links to multiple media outlets. These tools help publishers gain better visibility to a broader range of advertisers, all while discovering new brands that are relevant to their audiences.
Advertisers also benefit from this technology, allowing them to gain access to a wider audience from multiple publishers. Additionally, AI-powered matchmaking tools can provide publisher recommendations based on past performance history with other advertisers. This helps brands reach relevant consumers which, as a result, creates a better shopping journey for the customer.
Times are undoubtedly tough now for many industries, but consumers’ desire to shop remains strong. The only thing that has changed is that online is now the primary option for millions of people. Although marketers now face reduced marketing budgets and the need to make every advertising dollar count, there are still opportunities for marketers to ensure performance.
Affiliate marketing offers a low-risk and effective performance channel to both unlock new audiences and engage existing customers. Accessing the right audience is more important than ever for brands to emerge from the pandemic intact, and able to take advantage of increased online consumer activity.
Stuart McLennan is the VP APAC at Rakuten Advertising.