Don’t Believe the Hype: Affiliate Marketing is Very Much Alive (and Doing Well)

By Maura Smith, CMO on June 6, 2019

Over the past year, there has been an increasingly visible effort by certain “don’t call us affiliate” solution providers to declare the death of affiliate marketing. Nothing could be further from the truth.

While the legacy network model was in desperate need of disruption and innovation (FYI, it’s happening), declaring that network model dead (as we have done) is absolutely accurate. However, with projections showing $8.2B in US spend to be generated by 2022, the affiliate category is far from dead.

Red Herring

On the contrary, as a subject matter expert and primary contributor to the channel’s growth for more than a decade, I’m here to report a red herring in the channel. A blatant game of semantics is being played by some in the space—one that appears to be born out of a need to redefine the competitive landscape in their favor by casting a dark shadow of irrelevancy, stagnancy, and apathy over established competitors. All this while supporting a narrative that the addressable market opportunity for this newly defined category is far beyond that which has been traditionally associated with the affiliate channel.

Ok, let’s be real here. In an environment where the cost to acquire a customer continues to increase, and walled gardens of Facebook, Google, and increasingly Amazon, are the dominant players, marketers simply need an alternative that creates operating leverage based on scale and business outcomes. The addressable market for affiliate is growing in direct proportion to that need. In short, there is no logical need or requirement to change names for that expansion to occur. 

Unfortunately, this “clickbait” attempt to create fear, uncertainty and doubt, only creates confusion and diverts attention from the compelling innovation that is taking place within a marketing channel that has resolutely embarked on the next stage of its journey. The shock factor has not gone unnoticed and the industry is responding. The problem with the propaganda marketing is that many who have been exposed to this darker message will not have the ability to decipher between the true present state of affiliate marketing versus a message whose primary purpose is to substantiate fundraising valuations while painting the competition as relics of a now-defunct channel. The tactic is clever. It is at once bold, controversial, and disruptive. The ultimate wedge, or so they would like you to believe.

Don’t be fooled. Savvy marketers know better. A name change is just that: a name change. Changing the name doesn’t mean that the mechanics of the channel have altered. Changing the name doesn’t mean the solutions are better. Paid search didn’t change its name when Google made changes to advance search capabilities and started to display PLAs. Display didn’t deviate from its name when programmatic came on the scene. A channel’s progress or success is not determined by its naming convention. It is determined by results. Category innovation and advancement happen because smart people identify opportunities to improve, and take risks to deliver those improvements. Those improvements are happening across the affiliate marketing category and the idea that a channel’s name can serve as the defining characteristic of its value is ludicrous.

What the channel does offer is the ability to deliver results on a pay-for-performance basis with scale. It encompasses all forms of marketing, lending credence to its uniqueness and ability to diversify marketing efforts. While at its core, it is driven by relationships and personalized approaches, it is increasingly benefiting from technologies designed to automate the manual tasks that historically made it challenging to achieve scale in the channel outside of cash back and coupon publishers—and its pricing models are changing to align with marketer needs.

Still questioning the health of affiliate? 

  • • Category revenue is projected to reach $6.8B by 2020
  • • The U.S. market is estimated to grow at a 10% CAGR
  • • The affiliate marketing sector is growing—accounting for 15% of all digital media spend
  • • Affiliate Marketing delivers a 16:1 ROI
  • • Over 80% of brands have affiliate programs
  • • Investment, merger and acquisition activity within the space over the past 18 months has been significant

Whatever side of the fence you find yourself on—team dead or team alive—please know that you can call it whatever you want: relationship, performance, even partnership marketing. None of this will change the simple fact that contrary to a certain marketing campaign, affiliate marketing is still very much alive—and well.

Topics:   affiliate marketing