Nicki Hayes

Think affiliate marketing is all about coupons or discounting? Think again! While the affiliate programs of the 1990s have certainly evolved over the years, in our experience, perceptions (unfortunately) have not.

Too often, brands come to Blue Moon Digital with “affiliate baggage” – bad experiences with affiliate marketing in the past – and an “I hate affiliates!” attitude. Sound familiar? Most of these opinions are based on affiliate programs that were mismanaged.

Here the top three misconceptions we hear about affiliates and affiliate marketing:

  1. As a brand, I have to be promotional to have an affiliate program.

One of the biggest misunderstandings of the affiliate channel is that you have to have coupons or discounts to engage with affiliates. True, a segment of the affiliate community are specifically promotional in nature. However, we manage many successful programs for brands who have a full-price strategy that doesn’t include coupons or discounts of any kind.

Many consumer behavior studies indicate more and more online shoppers look for a discount before completing their online purchase, conflicting with the full-price objectives of many brands. Lucky for us, there are many types of affiliates that align with our clients’ goals. In fact, according to a Business Insider’s BI Intelligence report released October 29, 2015, “Growth in affiliate marketing is driven largely by two factors: adoption by mainstream media publishers and an increase in earned media via social networks. The shift to mobile underlies both these growth drivers.”

Mainstream media publishers are helping legitimize affiliate marketing by embedding product links within organic content. One example of this strategy is Gawker. Additionally, enlisting influencers on social media and on other earned-media platforms via affiliate partnerships, have provided a great ROI (return on investment) for many brands. According to Burst Media’s (now RythmOne) 2014 Influencer Marketing Benchmarks Report released last March, retail and apparel generated an average ROI of $10.48.

  1. Sales driven by affiliates are sales I would have received anyway.

To be able to evaluate incrementality of the affiliate channel, order data needs to be analyzed and married with the customer’s journey. Unfortunately, rarely do we find brands prioritize this effort among other business initiatives due to resources and sometimes cost. However, with growing pressure from the ecommerce industry, more brands will need to examine some kind of attribution to be able to understand the value of affiliate marketing.

One of the first steps to this attribution analysis is to ensure proper tagging of your analytics systems. Whether it be Google Analytics, Adobe Analytics (aka Omniture), or another, you should make sure you can evaluate the affiliate program at the individual affiliate level. By properly tagging your analytics systems, you’ll be able to see where specific affiliates are within the purchase path.

There are also several affiliate tactics that can influence new customer acquisition through the affiliate channel including targeting customers that have shopped similar brands. Among US retailers, 40% say that affiliate marketing is “one of the most effective customer acquisition channels,” according to a 2014 survey conducted by Shop.org and Forrester. These same retailers say that affiliate marketing is a more effective customer acquisition channel than retargeted ads and direct mail.

  1. If my affiliate revenue grows, there must be cannibalization of other digital channels.

As cited earlier, new types of affiliates are emerging, causing affiliate programs to grow naturally. However, to avoid cannibalization specifically, your affiliate program should not be managed without insights (at the very least) into other channels and their strategies. The most successful affiliate programs are aligned with other channels such as search engine marketing and display. As the saying goes, “a rising tide lifts all boats.” We have found when there is collaboration between digital marketing channels, it avoids cannibalization of revenue across channels. When digital marketing channels complement each other rather than compete, the brand wins!

Still not convinced? Need help convincing others at your company? Get in touch with the BMDi team today at info@bluemoondigital.co.