Georgia Hudson, Director of Marketing for JAPAC at Partnerize breaks down the fundamentals of affiliate marketing and global partnerships, explaining how you can leverage trends to drive growth.
How well are Australian retailers incorporating affiliate marketing into their strategic growth plans?
Affiliate marketing is expanding in Australia. IAB Australia’s 2024 Affiliate and Marketing Partnership report found that 53% of advertisers and agencies have increased their overall spend on affiliate and partnership marketing over the last year while 63% of advertisers and agencies intend to increase affiliate and partnership marketing spend over the next year. However, several barriers prevent all retailers from fully adopting it as a primary marketing channel.
Research from Partnerize and Forrester Consulting shows that senior marketing executives often lack a thorough understanding of the potential of partnership marketing. Challenges in measuring the value derived from partnerships, along with a traditional preference for other marketing and sales channels, have hindered growth. While there are indications of a positive shift, the only foolproof way for retailers to fully embrace this channel is by recognising and overcoming these barriers.
What are some notable trends in affiliate marketing in Australia?
Several significant trends are emerging in affiliate marketing across Australia. Here are some of the key trends retailers should be aware of:
- Partnership Diversification: A diverse partner portfolio should include content, loyalty, coupon, social, shopping comparison, and buy-now-pay-later partners. The development of dynamic commissioning and attribution tools by software providers has enhanced revenue attribution to partners involved in the discovery or influence stages of the consumer journey, thereby increasing their prominence and driving greater diversification in the category.
- The Influencer Opportunity Inside the Affiliate Channel: The creator space is fragmented and complex, with less than 25% of influencer spend currently measured based on conversion. Measurement challenges on a pay-for-performance basis add to the complexity. Achieving results requires a combination of human involvement and quantitative capabilities, making vendor spend consolidation difficult despite budget pressures. The opportunity to engage influencers in affiliate lies largely with the micro and nano cohort who are vying to get their ‘foot in the door’ with brands and don’t have the followership akin to macro influencers who can command up-front sponsorship fees and are therefore are willing to work on a conversion basis. Bottom line: The playbook on how to work with influencers in the affiliate category is still being written.
- Channel Understanding, Awareness, and Education: Senior-level marketers often do not fully recognise the impact of the affiliate channel. They tend to prefer other channels like paid search and social media due to their familiarity and comfort with them. Their inability to effectively measure the affiliate channel’s performance and contribution has been a significant barrier to its broader adoption.
What challenges do retailers face when trying to launch affiliate programs?
One significant challenge is ensuring channel readiness. Several factors contribute to successful outcomes and brand satisfaction, but where should a brand start? Evaluating your annual paid social and paid search spend can indicate your brand’s level of awareness. If you are not actively investing in these channels, you might not be ready for affiliate marketing and should proceed with caution. Initial ad budgets should focus on the primary channels most effective at creating brand awareness. Eventually, brands will hit a point of diminishing returns. Only after meeting these prerequisites can brands expect significant wins and successes in the affiliate channel.
What strategies can retailers implement to maximise the benefits of affiliate marketing?
Retailers should collaborate with a diverse range of partners, including influencers, content creators, and brand ambassadors, to drive business growth and increase revenue. Utilising a partnership management solutions provider can simplify this process with tools for discovery, recruitment, optimisation, payment, brand safety, and fraud prevention.
Why is the partnership channel important for retailers today?
Partnerships offer substantial value to marketers due to their cost efficiency and wide-reaching capabilities, targeting both new and existing audiences. Despite this, partnerships often receive less attention than dominant digital channels like paid search and social media, which are largely controlled by major players like Meta, Google, and TikTok. Marketing managers face challenges in convincing CMOs and other senior executives of the benefits of partnership marketing. These challenges arise because senior marketing executives often:
- Lack a comprehensive understanding of partnership or affiliate marketing strategies.
- Prefer channels they are more familiar with.
- Struggle to accurately measure the overall performance impact of partnerships.
To address this, Partnerize collaborates with third-party research groups like Forrester to commission studies on the impact of partnership marketing. Providing senior marketing executives with concrete data helps them recognise the significant value a robust partnership program can bring to their business.
Why are retailers beginning to explore global partnerships?
Brands are increasingly acknowledging the value of partnership marketing as they venture into international markets. Partnership marketing presents opportunities for broader audience outreach and collaboration with partners and content creators who possess local market expertise and have already established trust with their audiences in those regions. This approach proves to be highly cost-effective since partners are compensated based on their performance. Partners can assist brands in international expansion by leveraging their proficiency in navigating local languages and regulatory frameworks, often having resources on-site that newly expanding brands may lack. Local partners can provide valuable insights into the competitive landscape, advising brands on successful strategies and pitfalls observed within the region.
Partnerships offer a cost-effective avenue for growth, enabling organisations to engage with audiences, enhance brand awareness, and drive demand and conversions in global markets while offsetting costs associated with other channels that are becoming increasingly expensive, such as search, social media, and display advertising.
What steps should retailers and brands take to facilitate global partnerships? How does this differ from the traditional partnership model?
When contemplating international expansion, businesses and marketers must thoroughly grasp the intricacies of their target markets. These nuances encompass economic conditions, cultural variations, language barriers, competitive landscapes, market maturity, legal regulations, and the complexities of currency exchange rates. Additionally, marketers and CMOs must structure their organisations to effectively support this expansion.
Successful expansion often hinges on individuals with a strong local presence, possessing entrepreneurial drive and the ability to independently execute ideas and cultivate robust relationships both internally and externally.
Considering these market dynamics, the primary objective for marketing is to identify strategies that resonate with regional audiences and achieve desired key performance indicators (KPIs). Determining whether physical experiences or digital initiatives are more suitable becomes crucial. Marketing initiatives should also address language nuances or deciding when global communications should be presented in English or localised into native languages. Navigating and accommodating these aspects of international expansion is undeniably complex, posing challenges for businesses whether they are entering a single new market or multiple ones.
Recognising and addressing these factors undoubtedly influences the success or failure of global partnerships, given the intricate interplay of regional and cultural dynamics.
What steps should retailers take to establish a successful global affiliate marketing channel, and what technology is necessary for this?
Brands require software that streamlines the labour-intensive aspects of partnership management, allowing them to allocate resources effectively towards strategic initiatives that foster profitable growth. Partnerize provides both software and expert services to assist leading brands in leveraging their partnership channels as profit centres, offering a sustainable, brand-safe, and scalable alternative to primary sales and marketing channels through its partnership lifecycle modules:
- Discover: Partnerize’s platform includes a recruitment and activation engine that facilitates the discovery and activation of suitable partners from its database and the wider digital ecosystem. Retailers can input specific audience attributes to receive partner recommendations based on demographics, location, reach, and other factors.
- Track: This API-first solution powers partner channel insights with scalable and flexible tracking infrastructure. Retailers can integrate seamlessly with Partnerize using various tracking methods such as first-party, server-to-server, batch, and mobile app tracking, or utilise ecommerce plugins for swift partner program activation.
- Manage: Partnerize enables retailers to optimise partnerships through effective communication, collaboration, and commissioning capabilities necessary for driving profitable growth. Features include the ability to dynamically reward global partners, implement incentive-based commissioning structures, and communicate with partners using action-based triggers.
- Measure: Retailers can gain actionable insights and inform data-driven strategies with Partnerize’s advanced reporting suite. Integration with analytics and attribution platforms ensures seamless data flow, eliminating data silos and enabling informed spend allocation decisions.
- Pay: Partnerize automates partner payment distribution in partners’ preferred currencies, facilitating global partner payments at scale.
- Protect: Partnerize’s “always-on” terms and conditions enforcement solution, powered by BrandVerity, monitors paid search and trademark violations, empowering marketers to maintain brand safety within the partnership channel and combat ad spend inflation caused by policy violators.
What role does Partnerize play in assisting retailers in establishing successful partnerships, including those on a global scale?
Partnerize has an extensive network of content creators and partners worldwide, facilitating a brand’s global expansion by ensuring access to the myriad benefits previously outlined, regardless of the geographic breadth of their expansion efforts. From a technological standpoint, we enable brands to remunerate their partners in their respective local currencies. Our robust analytics tools empower brands to analyse their performance metrics from various perspectives, whether at a global scale or localised level, supporting up to 60 different currencies across 214 countries.
Our unparalleled services team, located in strategic global locations, serves as a valuable source of insight and support as brands navigate global expansion endeavours within their partnership networks.
Find out more about Partnerize here.
Source Q&A: Understanding Affiliate Marketing & Global Partnership Opportunities
