Goodbye Wild West. Hello Strategic Affiliate Marketing

21st Century Affiliate Marketing has come a long way from the dark ages of a one-man band in a bedroom-based ‘office’ making unrealistic promises.

Ami Spencer, Director of International Publisher Relations


Affiliate Marketing was pretty much an afterthought on the fringes of the digital mainstream, often characterised as being a “Wild West”, with little brand visibility or control. Today however, things couldn’t be more different with strict controls in place to ensure that no-one can simply just join a network and start promoting products left right and center. Now there are compliance checks to protect advertisers and brand image.

We have reached the point where affiliate marketing is now famous for being a cost-efficient, low risk way of driving sales and leads and an integral part of the digital marketing mix.

Data released by the Internet Advertising Bureau (IAB) and PwC earlier in 2017 highlighted that £1.578 billion was invested into performance marketing in the UK in 2016. This resulted in £19.4 billion in sales revenue – a 16% increase on figures from 2015.

The model has changed, affiliate marketing has left its reckless years behind and is now able to provide real, measurable ROI. And we’re not talking peanuts here. According to the IAB and PwC study, the ROI generated was £12.30 for every £1 spent as an average win. Depending on your marketing budget and brand, sometimes this can be 15:1 or even 20:1! Last click is no longer the only commercial model offered to advertisers by affiliate networks. We work with advertisers on a range of performance compensation models, including (but not limited to): product seeding, monthly retainers, Cost Per Millie, Cost Per Click, and a combination of the above – all being worked back to an agreed, measurable ROI.

Measurable ROI, the modern day yardstick

Typically, affiliate marketing campaigns were dominated by incentive based programmes, such as Topcashback, Quidco, Vouchersites etc. However, the norm is now being challenged by non-traditional publishers. Social media and content marketing are being used to reach new consumers in new and innovative ways that amplify product launches, create a buzz and generally begin to stir up the marketplace. For example, we work with a number of non-traditional publishers including, Get the Gloss, Tech Radar, Hello Magazine and The Telegraph and plan affiliate campaigns across Facebook, Twitter, Pinterest, YouTube and Snapchat.

Affiliate marketing today is not just about offering consumers discounts and cashback as part of a bottom of the funnel strategy to drive conversions. A strategic affiliate marketing campaign now works to drive engagement across all touch points of the consumer journey, including brand and product awareness, consideration, evaluation, and action. It isn’t the Wild West of old; advertisers are asked to consider the post conversion impact of any affiliate activity such as data capture and life-time value.

The sophisticated choice

Affiliate marketing has moved away from being revenue and sales centric. The advertisers most engaged with the channel will use affiliate marketing in tactical ways to underpin their overall marketing strategy, supporting wider KPIs such as increasing Average Order Value, customer retention, new customer acquisition, data capture, consumer engagement and life-time value.

Campaign planning is also now far more sophisticated and integrated, leveraging affiliates with social reach to ‘pre-heat’ the market before big product launches, running competitions to drive user engagement, using affiliates to keep up the momentum of a product post launch and to create user stories such as product unboxings for reviews.

Bespoke packages can be created with very specific terms and conditions that publishers must accept before being part of that campaign. This is so that advertisers can marry affiliate marketing with pre-existing activity with the confidence that offers are being audited within each campaign – ensuring any new product release doesn’t inadvertently have a non-approved discount applied.

The use of technology and sophisticated affiliate marketing strategies means that we are more integrated with brands than ever – positioning affiliate marketing as an established channel. We can say this with confidence given the share of marketing budget and boardroom consideration affiliate marketing is awarded at the start of a client’s financial year. Our Account Management teams are often asked to plan activity and forecast performance – sometimes years in advance in order to build stronger partnerships aimed at maximising performance. Account Managers for enterprise clients frequently attend weekly channel and trade meetings, whilst others spend significant time working in the offices of advertisers and vice versa.

Affiliate marketing has come a long way, contributing significantly to many advertiser’s online revenue, and is now firmly lodged into the consciousness of CMOs. If you would like to know how Webgains can help you in your quest for digital marketing domination get in touch!

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