With The Cover Charge For Facebook Rising, D2C Marketers Have Unlocked The “Side Door” To Winning Customers: Affiliate Marketing

By Matt Gilbert, CEO on February 7, 2020

Today’s digital marketing “best practices” have done retail marketers a disservice by capping their collective imagination, weighing them down with outdated practices and narrow expectations on how things can and “should” be done. The standard digital playbook, as dynamic as it may be in some ways, unfortunately, prescribes a singular reliance on the walled gardens of Google and Facebook. To the retail marketer’s detriment, this isolated approach relies on dated, limited tactics accompanied by a high cost of entry.

Some might say that we’re simply seeing a reluctance to change the playbook too radically, to keep inside the comfort zone. But, in order to meaningfully evolve and meet the demands of today’s savvy, expectant consumers, and see real business results in the process, we must make the bold move and drop outdated practices and expectations, and perhaps most importantly, shift our mindsets. That shift means moving beyond the walls.

Of course, in reality, it’s hard to recall a time in recent history when the walled gardens didn’t dominate, and the retail consumer marketer’s life wasn’t commanded by the toils of figuring out how to play there, despite lack of data control, transparency and other issues that hamper performance—all of which is traditional “standard operating procedure.”

But, the limitations of “standard operating procedure” are significant. For example, given walled garden transparency issues alone, this marketer can’t operate effectively without the freedom and ability to access, manage and understand the data on-hand – let alone gauge how to apply it.

Read More: Can Positive Charity Ads Have More Impact?

A perfect example is traditional marketers inside of retail businesses who are encumbered by legacy habits across their businesses, on the use of data. For years, the message has been that more is better when it comes to data. On one side of the data issue, we have marketers who have focused on data collection to the extreme. They have so much data, they are choking on the sheer volume of what’s been collected – often unclean, duplicate or siloed. These marketers can’t tackle proper audience development because they can’t begin to understand the data that they have. Their attribution models are stuck in the last click and they’re just now thinking about how to adopt multi-touch attribution, incrementality measurement, and mix modeling. They may understand intellectually that to be successful, they need to move off their legacy marketing models, legacy attribution methodologies, legacy providers, and start to adopt the direct-to-consumer playbook. But, they’ve been stuck, overwhelmed by volume.

On the other side of this data issue, we have marketers with a precision problem – those who have such a precise understanding of their customer data that they target too narrowly and lose more opportunity than they ever realize they had in the first place. A perfect example of this is the tendency for over-use of Facebook custom audiences, whereby a marketer may target so narrowly that they fail to balance reach and performance. Imagine if you could discover and engage new audiences, greatly extend your reach and do so more cost-effectively, with more powerful business outcomes.

Considering these data-driven marketing legacies, the blueprint for change going forward comes down to addressing a single question: “What’s the only change in the world that I need to care about?”

The consumer is now in control. That’s it. That’s your new guiding principle.

Marketers used to control the buyer journey, they used to control where they placed the messaging and what it said. They ceded this control to the consumer. What that means from a strategic and practical marketing standpoint is that you have to be everywhere, and you have to be able and as relevant and personalized as you can be because the expectation of a consumer is, “I’ve already given you data about me. You know something about me, don’t waste my time. Meet me where I am.”

If you’ve missed that opportunity, your competitor is there waiting to capture your missed opportunity. And that personalized omnipresence is extraordinarily expensive for a marketer, right? This reality has allowed the walled gardens to dominate on the promise of scale and reach alone, leaving personalization off the table entirely. But, bypassing personalization within your brand storytelling is a huge sacrifice for today’s consumer marketer. Personalization at scale matters. A lot.

It was Adweek that used the phrase “Facebook and Instagram are the front door to the direct-to-consumer economy.” So, on some level, you have to be there. You can build your business to maybe $50 million in revenue solely on those channels. But when you get there, and you hit that threshold, for you to get to $100 million, you can’t do it and have unit economics that are sustainable there. Organized diversification is vital.

Read More: How to Use Data to Drive Customer Propensity

Here’s our opportunity to change the playbook. Leaving outdated versions — those that rely on banners and display and outdated pricing models — aside, today’s affiliate marketing can subsidize this bigger play because it operates with a pay for performance/outcome model. The way I see it, affiliate marketing is the side door to the direct-to-consumer economy, where there’s no red rope, you don’t have to pay a cover charge and you see the same results without the burden of freight.

That’s a really important message and pillar around affiliate, and the successful direct-to-consumer brands get that. That’s why they’re there. In a more traditional marketing organization, a marketer may not see the strategy right way. They’re just going to think, “Ugh. It’s eBates. I don’t discount. That channel is not for me.”

But, encouraged to take a page out of the D2C marketers winning playbook, consistently using “test and learn” strategies that deliver scalable customer acquisition – marketers can free themselves from past notions or beliefs about what works and instead actively cultivate this extremely valuable operating leverage. The economics alone are compelling.

Reliance on one or two channels, no matter what sheer scale they may have yielded in the past, isn’t a sound basis for strategic decision making. As a cost-effective subsidy to the master plan, affiliate marketing effectively arms the marketer with a powerful combination of scale, automation and most importantly the wisdom and security of a pay-for-outcome model.

So, practically speaking, how might a marketer breakthrough and take this more expanded approach? It comes down to pro-actively engaging with your trusted go-to resources and then investing your time wisely. For example:

– Consider tapping your solution provider to keep you actively informed and educated on the latest optimization techniques emerging any given quarter, introducing partner types that would allow you to reach audiences you never knew utilized affiliate as a monetization technique. For example, you might tap media partners like Business Insider and Buzzfeed to help your brand gain product exposure. In addition, there are in-channel tools help you allocate spend to align with your attribution model, so you can pay partners on models other than last- In short, insist that your solutions team keeps you in the know.

– Make a meaningful time investment. It’s not enough to simply layer in affiliate with your plan. Take the time to get beyond checking that box. What channel have you ever set up, and then moved along, only to realize a substantial overnight return? Probably none. Affiliate marketing will require that you or a provider dedicate time to managing and optimizing the program for it to be successful. Even if you aren’t committed for the long haul, at least adopt and employ the ‘test and learn’ tactic in a purposeful way so that you service your affiliate program by giving it time and room to prove itself and perform.

The economic ah-ha of this more expansive approach should free the retail marketer up from the burden of past standard operating procedures, excited by the possibilities of a well leveraged, entirely cost-effective way forward. With the inherent pay-for-outcome based model, affiliate can help customers extend beyond the walled gardens and subsidize the cost of other paid channels such as Facebook, Google, and certain tactics including retargeting and lead generation. Diversification and an open mindset pave the way for even greater growth and outcomes.

*This article originally appeared on MarTech Series on 1/14/20

Topics:   performance marketing affiliate marketing affiliate Direct-to-Consumer D2C marketers D2C D2C Economy