While many brands and marketing teams navigate their digital strategies due to COVID-19, marketers are looking for new ways to minimize risk and reach their customers in a meaningful way.
The future is uncertain. Businesses are cutting costs where they can in order to survive, and for many, that will include marketing budgets. Recessions have happened before, and businesses that adapt will be positioned for success and long-term growth. Marketers are evaluating their digital strategies, shifting budgets from supporting in-store initiatives, and rethinking traditional media. Those that have experienced a recession (perhaps the Great Recession of the 2000s) understand that digital channels like affiliate marketing offer a performance-based model maximizing ROAS (return on ad spend), minimizing costs, and creating the ability to build long-term partnerships.
Affiliate marketing is based on a cost per action (CPA) which allows for lower risk and gives more flexibility in developing your strategy.
– Here are five reasons that highlight the importance of utilizing Affiliate Marketing in your Digital Strategy –
Pay Per Performance
Unlike some traditional channels, affiliate spend is determined when a sale occurs. A recent survey by the Performance Marketing Association (PMA) shows that the average ROAS for the channel was 12:1. This greatly reduces the risk in ad spend and allows you to be flexible when determining program goals, selecting commission structure incentives, and utilizing incremental revenue to help fund additional channels that are higher cost.
Many tactics that fall under other channels like display, paid search, and influencer marketing can be utilized through affiliate. On-site engagement and retargeting, Podcasts, TM + search bidding campaigns, and influencer marketing can all be part of a robust affiliate program. The benefit of leveraging the affiliate channel is that it operates on a CPA basis and lowers the risk and cost that can be associated with some of these strategies.
Affiliate is a primary channel for many top brands
Forbes recently showed that affiliate marketing accounts for 15% of all digital marketing revenue. A common myth is that affiliate is only a bottom-funnel channel dominated by coupon sites. However, every part of the path to conversion is touched by the affiliate channel; from awareness, consideration, and eventual conversion. This means that other channels often benefit from an existing affiliate program while keeping costs lower.
As the current COVID-19 situation continues, consumers will likely spend more time on mobile devices and desktops than ever before. Digital content will be an important part of any brand’s strategy and affiliate allows you to tap into content opportunities from editorial sites like Business Insider, and Conde Nast as well as influencers, bloggers, and networks like Rewardstyle.
New Customer Acquisition
It might go without saying, but one of the main goals of any marketing strategy is to acquire new customers. A recently commissioned survey of over 170 executive-level marketers by Forrester Consulting shows that affiliate marketing is ranked #1 for customer acquisition. Many affiliate networks have dynamic commissioning tools that allow you to adjust your spend on new vs existing customers which can help to incentivize partners as well as reduce costs on returning customer increasing incremental revenue.
Now, more than ever, it is important to look at your business and your data to make informed decisions as you navigate the new normal and plan for recovery. At Blue Moon Digital, we’re here to help! If you have any questions about your marketing strategies during these challenging times, feel free to drop us a line.