Jesse Cherubini

Internet Marketing Consultant, Affiliate

Proving Incrementality Through Your Affiliate Program

While search marketing efforts have continued to grow over the years, other digital channels like affiliate marketing have been somewhat cast aside as an accessory. Many marketers are only making small investments in affiliate, but the industry is continuing to grow and gain more traction. Although the channel provides a more cost-effective and complementary cross-channel campaign investment, one of the most glaring issues holding marketers back from investing more is proving the incremental growth driven by affiliate efforts. Decision makers can feel more confident investing in this channel by focusing on optimization details to improve the program. Read on to learn about the benefits of investing time and marketing dollars into an affiliate program and how to prove incrementality in the long run.

Evaluating Your Network

Many affiliate marketers fall into the trap of choosing an affiliate network based on its popularity or namesake. To avoid this, marketers should, instead, consider investing in a technology provider that offers a similar product without a variable fee. In this post, our associate director of digital strategy detailed the advantages of switching from a variable-fee network to a flat-fee technology provider so high-performance campaigns earn incremental revenue after hitting a break-even point.

For campaigns with larger sales volume, the cost of running on a traditional affiliate network can rack up over time as payouts to the network are applied to every order. As a result, brands expecting to see large returns should consider spending their budget on a flat-fee technology to increase their efficiencies. Because there is no incremental payout to the affiliate network to use its technology, each sale made after reaching that break-even point becomes incremental revenue.

Understanding the Customer Journey

As the industry stands today, affiliate programs are often put into silos and abide by their attributed payout system. Although affiliate marketing predominantly follows a separate, last-click commission model, attribution has gradually begun to play a more prominent role in the channel. To better understand the customer’s journey to purchase, marketers should consider investing their resources towards an attribution solution. This can help them to understand the path consumers take before they purchase on the company’s site. The more holistic approach to attribution involves using a cross-channel attribution solution to examine the incremental effects of the affiliate channel on a digital marketing program. This can provide a high-level overview of how the affiliate channel interacts with other channels and contributes to bottom-line sales growth. This technology can also provide insight into the attributed revenue that a channel is driving, which can lead to more informed budgeting decisions across the board.

Additionally, attribution can be examined within the channel itself. Affiliate program managers are now beginning to have conversations about rewarding top-of-funnel content publishers over last click coupon sites. This payout system requires the network technology to be able to pay out on a first click basis, but this is becoming more commonplace as affiliate networks see the growing need for alternative commission structures. As marketers begin to experiment and test the waters with the new technologies that are rapidly becoming available, publishers will be sure to react in a way that will help guide the dialogue of a changing industry.

Evaluating Your Publishers

To support rewarding high-value publishers, affiliate marketing managers can constantly monitor the performance of publishers in their program. Custom solutions for evaluating publishers vary depending on the goals and needs of the program manager, but the end goal of such a tool remains the same.

Ultimately, the goal is to find a way to justify an increase or decrease in commissions based on relevant performance metrics. In doing so, affiliate managers can take control of their program’s spend based on real data, not on gut feeling. The goal of this should never be to cut costs, but rather to properly reflect affiliate performance onto commission payouts.

At Rise, we used a publisher evaluation tool to analyze the performance of one of our clients’ group of publishers. The end result of using this tool was lowering the commission of publishers who were driving less valuable traffic and reallocating that spend to reward affiliates with high-quality traffic.

While raising a publisher’s commission can drive them to perform better, lowering commissions for those who aren’t performing can create incentive for the affiliate to work their way back to their old rate or even an increased rate. This can also open up the floor for discussion and provide a more transparent landscape, which can help with communication between the advertiser and affiliate.

Implementing Change

Though affiliates are often all evaluated based on the same performance metrics, program managers should segment their analysis based on the type of publisher. Coupon sites, for example, may have to be assessed differently than content publishers. A content publisher may drive more top-of-funnel traffic than coupon sites, but they can’t provide the same type of brand exposure as a large coupon affiliate.

Affiliate marketers must be proactive when measuring and comparing their program results, leveraging both data and marketing intuition to set the appropriate measurement tiers. Once these are set, and enough conversion data has been collected, affiliate managers should be equipped to start a conversation with their partners. This can lead to optimization efforts and can open up the door for both advertisers and publishers to talk shop.

Publishers can apply the same methodology to their advertisers and can, in turn, present opportunities for the advertiser to fix UX-related issues that went previously unnoticed, get ahead of a tracking error, or update promotional copy to increase conversion rates. As long as both parties remember to segment their data, these tools have the potential to positively influence the future of affiliate marketing and should be strongly considered.

Realizing Incremental Growth

There are endless opportunities for the affiliate space to grow and become more robust. After these changes have been implemented and there is enough data to collect, marketers can compare their current metrics to a previous period.

Optimized affiliate programs should show increased return on ad spend, thereby allowing incremental growth to be realized as the program grows. It is up to today’s affiliate program managers to be thought leaders and impact influencers by pushing these innovations and initiatives. Ignoring the changes occurring in the affiliate space right now would be ignoring potential incremental growth. As the tools to show this evolve, take time to build out your affiliate program and start these conversations with your partners.

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