Understanding which channels are most effective at the moment can be a real puzzle for marketers. The most sensible approach is to look closely at the data and uncover hidden opportunities. Over the past few weeks, we’ve seen one of those emerge in affiliates.
Often overlooked, in our opinion affiliates are a crucial part of the commerce mix; typically representing 10-15% of online revenue for established online businesses, and often much more for growing brands.
Despite the current climate people are still buying, and in many instances consumers are looking for a deal – which affiliates can give them.
Not only can the channel quickly drive efficient revenue with minimal initial investment; it also provides brand visibility and can allow you to target new audiences.
As I will discuss below, common concerns about the affiliate channel regarding protection of margins and driving incremental revenue, should not apply if the campaign is managed effectively and in the context of your wider online marketing mix.
Across our client base, we’ve seen a higher demand over the last three weeks in the toys, home and DIY sectors – and surprisingly the luxury market. There is also an increased demand for garden and home furnishing products as people look to keep busy over the coming months.
How to maximise the affiliate opportunity
Firstly, let me explain a little about how the channel works…
Affiliate marketing is a performance-based marketing channel, enabling brands to drive incremental sales revenue via positioning on some of the UK’s largest websites, connecting a brand to millions of online customers. With its Cost per Action (CPA)-based commission model, clients can be sure that they are gaining true accuracy over ROI, making the channel relatively low-risk and more adaptable to each client’s needs, goals and commercial capabilities.
1. Broad is better
The common misconception within the affiliate space is that it’s all cashback and vouchers, which arguably was the case in the past. There is no denying that these affiliate types can be a vital part of a campaign, but they need to be managed and executed as part of a far wider strategy. What we try to do is build out a broad, well-balanced strategy which focuses on the nurturing of all key affiliate sectors inclusive of content, closed-group loyalty, news publications, incentives and employee benefits.
2. Less is more
When managing an affiliate campaign, the temptation is to invite and approve a huge amounts of affiliates in the knowledge that more affiliates means more revenue. In my opinion based on over 9 years’ experience, this can actually be more damaging to a campaign. Whilst we want to support smaller affiliates, there has to be criteria to ensure a campaign doesn’t become unmanageable from a compliance and brand-protection quality point of view. I believe in a more controlled, protective approach, ensuring true quality is delivered. It is better to manage 100 affiliates well, than to have less control over a base of over 1000 affiliates. We are representing brands, and therefore have a responsibility for policing the brand’s perception within the space.
3. Keep your house in order
The need for a tidy and organised account management structure is inherent on any campaign. This stems from ensuring a clear and efficient approvals process, to implementing validation processes which are robust and fair, and checking affiliates have everything they need from a creative and copy perspective. These are the very basics of any affiliate campaign, but can have a huge impact on a campaign if forgotten or neglected.
4. Be personal
Within the affiliate world, a relationship is everything. It is the starting point and core of everything that we look to deliver for our clients. Having a clear framework for balancing mutual gains is crucial, ensuring we are hitting key performance metrics for clients, whilst making sure affiliates feel challenged, incentivised and important.
It goes without saying that there must be a clear communication strategy which is ongoing and nurturing, building strong bonds with top performers on a personal basis, and that mid-long tail affiliates are still valued and kept ‘in the loop’. Networks have fantastic tools to ensure we as account handlers have the means to stay in touch and stay engaged with the people who make campaigns work!
5. Be smart with incentives
As mentioned, this sector can be highly effective for some brands (not all) and it is my belief that we must approach this with high levels of consideration. To my team, I regularly reiterate that they should rarely be putting forward the arguably ‘old school’ approach of blanket codes offering 20% off products. If we are ever to suggest a discount, there must be a wider objective behind it to ensure we are working smartly. Minimum spends set at an appropriate rate to ensure basket value is being stretched, targeting messaging around particular product lines which are more margin rich for clients, or reduced ‘voucher’ commission rates to allow for a balanced and lower risk approach are just a few of the ways which I would suggest work well. Everything tracks back to the client’s objectives, and our responsibilities to meet these.
6. Be present
Affiliate campaigns cannot be simply switched on and left to ‘tick’ in the background, as this opens them up to both abuse and disengagement from affiliates. The potential is huge in a lot of scenarios, but there is a need for continuous management, smart strategy execution and a true understanding of objectives in order to truly maximise results.
7. Perfect planning
A broad, well-balanced strategy which draws on all the points outlined above is vital to the success and longevity of any affiliate programme. Although we strive to be flexible and remain reactive to our clients’ current trading conditions and overarching brand strategies, I believe it’s important to have a quarterly strategy plan in place. Working to a quarterly cycle allows us to reflect on what has worked well and what hasn’t in the previous quarter, meaning we can take those learnings forward to strengthen and grow the campaign further. It also ensures the client is well informed of any challenges, successes and opportunities so everyone is on the same page as one cohesive team. This is underpinned by continuous optimisation and recruitment – looking at cost-saving initiatives with smart commission structures and utilising agency buying power to negotiate favourable commercials, competitor benchmarking and supporting grassroot affiliates who have the potential to become the volume driving affiliates of the future.
8. Better together
We firmly believe in running an affiliate campaign as part of an integrated strategy. Our experience proves the value behind working to shared goals, and a shared ROI.
Quality will win out
Focusing on a quality-led approach is key. There is little point in inviting hundreds of affiliates to a campaign if you can’t manage them effectively. The key is balance and diversity, backed by a proven planning approach.
The affiliate channel can be activated quickly and there are few barriers to entry for brands now looking to replace lost offline sales or to drive revenue growth.
Catch-up on our recent webinar
If you'd like to learn more about how affiliate marketing could work for you, we'd recommend catching up on our recent webinar - 'Affiliate marketing - Finding the ket to smart success'
If you'd like to understand more or chat through your options, please get in touch.
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