a marketing arrangement by which an online retailer pays commission to a partner for performance-driven action from its referrals.
If you’re considering incorporating affiliate marketing (also known as performance marketing) into the mix but still aren’t convinced that the impact will be worth the effort, then you’ve come to the right place. Forrester reports that performance marketing is currently a $4.2 billion industry expected to reach $6.8 billion by 2020. Moreover, Forrester estimates a compound annual growth of nearly 10% by 2020.
As brands begin to recognize that traditional forms of marketing are no longer working as well as they once did (hello, sign of the times!), performance marketing commands an increasingly larger slice of marketers’ budgets. Forrester also lends us insight into where marketers are looking to spend budgets citing over 80% of all marketers currently allocate 10% of their marketing budget to performance marketing. But what does this mean for your business?
When compared to more traditional marketing channels including: search, display, email and paid social, one key differentiator that sets affiliate marketing apart is its uncanny ability at relationship creation/optimization. When considering the value that affiliate can bring, it’s important to understand its strength, or what lies at its core. Above all else, affiliate marketing is rooted in the idea of creating and strengthening relationships. These relationships aren’t only between advertisers and partners, but they’re very much about the relationship that consumers have with partners and brands.
Read on to learn about the top 5 reasons why you should leverage affiliate marketing now.
- Affiliate Marketing touches all forms of marketing
And by design, this is a key differentiator in making affiliate marketing unique. Affiliate isn’t a channel that dwells in a silo—it touches much more than just the last click of a transaction, something it’s traditionally known for. Take for instance content sites, bloggers and influencers who may serve as the greatest point of impact in the buyer’s journey, yet, don’t receive the recognition they deserve. There are also instances where the affiliate channel doesn’t impact the first or that last-click models, yet still resides within the clickstream, still warranting credit. In affiliate marketing, a partner can leverage paid search and SEO tactics to monetize their content through affiliate links, making it unique to other channels. Knowing how affiliate marketing works in tandem with the other channels, is a critical component to your success with this channel.
- Affiliate marketing is a pay-for-performance channel that minimizes risk while maximizing returns
Proving the value of the affiliate channel brings us to our next point. Perhaps the most attractive aspect of affiliate marketing (at its face value) is that it’s a completely pay-for-performance channel. This is not to imply that it’s an effort-free channel, it’s simply bringing light to an often-overlooked perk of affiliate: partners or influencers only get paid a commission once they make a sale. Additionally, affiliate—despite whether a sale is made or not—still serves as free advertising or additional branding that brands wouldn’t have had otherwise.
- Affiliate offers customization and connects you with your target audience
As mentioned earlier, one of affiliate marketing’s greatest strengths rests in its ability to create and nurture relationships. One of the most critical of these relationships lies between the partner and their audience. Partners spend considerable time creating quality content that they know their audience will connect with. Knowing what resonates best, enables partners to recommend campaign elements that brands may not have thought of, or perhaps put on the backburner including: certain product offerings to push, ad messaging, etc. Partners also understand well their audience demographics and, in some cases, can target subsets of these audiences to further tailor brand messaging. A great example of this is major apparel and accessories brand, Puma who didn’t realize that a famous pop star’s collection would be so wildly popular within the Asian market. However, top Asian partner, Dealmoon, knew otherwise and highlighted this collection to their primarily-Asian audience to great success! Doing so, skyrocketed the relationship between Puma and Dealmoon and together, they continue to achieve great success.
- Affiliate builds brand credibility
Remember how we mentioned that partners know their audiences best? This knowledge evolves in large part from the trust that they’ve worked hard at building with them. This means that when audiences trust what partners say—especially about a product—they are far more likely to purchase the products they recommend, essentially building a brands’ credibility. Affiliate marketing is all about partners working diligently on a brands’ behalf to endorse products and services in a way that sounds natural and that resonates best with their established audience. They can bring a new perspective and level of credibility to a brand that the brand isn’t able to do on its own. If this all sounds a lot like third-party validation, it’s because that’s exactly what it is.
- Affiliate encourages brand loyalty
While word-of-mouth has been one of the most effective methods of endorsing products or services since (basically) the dawn of commerce, it makes perfect sense that partner sites, bloggers and social media platforms would only intensify this means of marketing. From written reviews to live product demonstration, outlets like these are affording would-be consumers to see and “test” products like they’ve never been able to before. This isn’t the brand directly selling a product to them, but instead it’s someone they trust the opinion of endorsing the product on a brands’ behalf. The partners’ excitement transfers to the audience and with the help of all the proof points or the case they’ve built for why this product is best, consumers make purchases and more importantly, they make repeat purchases. This only strengthens their affinity towards a brand and ultimately, creates loyalty. Loyal consumers loyally spend on product because they can see the value, and affiliate marketing can serve as the catalyst in making this happen.
The affiliate channel just makes plain sense (and dollars)
Over the past 20 years, affiliate marketing has evolved, matured and grown into a well-developed, sophisticated form of marketing that in many ways has given more traditional channels a true run for their money. It’s the perfect low-risk, high-reward channel for both content and influencer marketing.
So, what are you waiting for? Let’s keep this conversation going by reaching out to us here.