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2016 – State of Affiliate Marketing

At Streamline, all we do is Affiliate Marketing. Our seasoned team has seen it evolve from a stigmatized marketing channel to a sophisticated incremental marketing channel for many companies. When advertisers start to understand the potential of this channel and the sophistication it can have, it becomes a potent tool to drive the most efficient and highest 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 a few insights to expect this year.

 

TRENDS
  • 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 2017 (source: Impact Radius)
  • Significant channel improvements have been 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 at a lower cost
  • Advertisers are leveraging big data including real-time attribution data to more efficiently manage and drive growth through the affiliate channel
  • Mobile possibilities for affiliate marketing is expanding, 40% of affiliate sales in 2015 transacted via mobile (source: Internet Retailer)

 

BEST PRACTICES
  • 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 we are on a path to reach our goals
  • 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
    • Measure all channels equally using the same using ROAS
PLAYERS
Advertisers
  • Majority of the predominate online companies offer an affiliate program, i.e., Amazon and Expedia
Affiliates
  • 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
  • SaaS-based affiliate tracking platforms that 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 three 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: some specific partners 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 critical components to measure. If you’re spending money, are you getting something incremental? If you don’t know, you should.

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