2016 – State of Affiliate Marketing
Here at Streamline, all we do is Affiliate Marketing. Our team is seasoned in the channel, so we’ve seen it evolve from a stigmatized marketing channel to a sophisticated incremental marketing channel for many companies. When advertisers begin to understand the potential of this channel and the sophistication it can have, it becomes a very powerful tool to drive efficient high quality traffic. Since we’ve seen the past, we thought it would be valuable to share how we see the future for Affiliate Marketing. Below are a few insights to expect this year.
- Advertisers are investing more in affiliate marketing: 40% of US retailers cite the affiliate channel as their leading customer acquisition channel (source: BI Intelligence)
- The affiliate channel is one of the fastest growing sources of revenue for online companies and is projected to be a $4.5 Billion industry in 2016 (source: Impact Radius)
- Significant industry improvements have been made over the last few years, particularly around transparency, improved tracking, and reporting capabilities
- Advertisers are shifting away from costly and opaque legacy affiliate networks, more advanced affiliate tracking solutions are now available and are a lower cost
- Advertisers are leveraging big data including real-time attribution data to more effectively manage and drive growth through the affiliate channel
- Mobile possibilities for affiliate marketing are expanding, 40% of affiliate sales in 2015 were conducted via mobile (source: Internet Retailer)
- Tracking – the foundation of affiliate marketing
- Best to use tag management providers for real-time data and affiliate credit information
- Deduplication – avoid counting conversions twice
- Deduplicate conversions across all marketing channels to ensure accurate data
- Promotions / Creative – affiliate promotions should be planned and controlled
- Keep content / offers fresh and relevant
- Control how affiliates receive credit for promo code conversions
- Reporting – measure what matters
- Utilize best in class affiliate tracking and reporting capabilities
- Monitor key performance indicators daily to ensure goals are being met
- Communication – affiliates want to hear from you
- Understand your affiliates’ business and preferred method of communication
- ROAS (Revenue / Spend)– simplify how you measure success
- Don’t use too many or complicated values to measure campaign performance
- For apples to apples comparison measure all channels the same, using ROAS
- Majority of large online companies offer an affiliate program, i.e., Amazon and Expedia
- Online websites or partners who earn commissions referring traffic to Advertisers, i.e., Ebates and RetailMeNot,
- Affiliate Networks
- Traditional Affiliate Networks who provide affiliate tracking, help connect Affiliates with Advertisers, and are typically compensated by earning a % of Advertiser revenue or spend, i.e., Linkshare and Commission Junction
- Advanced Affiliate Tracking Platforms offer advanced multi-channel tracking and reporting capabilities, i.e., Impact Radius or Performance Horizon
- Mobile / App tracking
- Track and credit affiliate mobile and app, ad clicks, app installs, and in-app events, i.e., Tune & Kochava
WHAT SHOULD YOU DO?
Based on this, here are four action items for every advertiser this year:
- RFP: If you have not evaluated tracking options in the last two years, do so now.
- Scale mobile sales: there are specific partners that can help you drive in app or mobile sales. If you’re not working with them, you should evaluate the options.
- Consider attribution: perhaps your internal reporting isn’t sophisticated enough, but many platforms out there give better insight into pathing of partners and between other channels in some cases. Dig into that data for insights of how to scale meaningfully.
- Lift: This is one of the most important components to measure. If you’re spending money, are you getting something incremental? If you don’t know, you should.