IAB’s Affiliate and Partnership Marketing Summit in Sydney event this week saw several client-side advertisers articulating the growing heft of affiliate marketing in their marketing mix. With IAB’s latest research into the space showing the majority of those investing in affiliate marketing planning to increase spend in the next year, figures indicate they’re not the only ones re-weighting plans.
Brand leaders weren’t just talking about the very lowest part of the funnel either. Top-of-funnel objectives such as brand sentiment, building awareness through to consideration examples were shared by Rainer Schmid, global head of marketing at BikesOnline, plus Commission Factory client strategy manager, Kate Eringa. In the same vein, some of the $20m in ad spend being guided by outsourced CMO, ecommerce marketing specialist and former Showpo marketing chief, Mark Baartse, is making its way into affiliate sources.
A few – including BikesOnline plus one of Are Media’s unnamed clients – are even pulling dollars out of Google in favour of affiliate marketing options instead.
“Google and Facebook are too expensive. I’m going to find other places to spend that money. Affiliate is a great channel to use. That’s why we keep taking money out of the traditional digital channels and put it into affiliates as it works really well,” Schmid said.
This growing love for affiliate is as apparent on the publisher side. Are Media CEO ANZ, Jane Huxley, was on hand to share the role affiliate is playing within the broader umbrella of the magazine giant’s ‘commerce’ strategy as a much-needed revenue source. In Are’s case, affiliate is largely coming through monetising content across its 39 brands.
“It’s just taking us that one step closer to the consumer,” Huxley told attendees. “We have always played a role in informing and inspiring, why wouldn’t we go one step further by inspiring an action and igniting an intention to buy something? In a way, it feels like a very natural evolution of the role of magazines and content has always played. But now we’re taking a piece of it for ourselves.
“I’ll tell you why: Quality content is incredibly expensive to create. It can’t be created by generative AI. That does a brilliant job of looking over its shoulder, but my incredible editors and general managers will tell you what’s coming next year, the year after that and beyond,” she suggested.
“We are building on a very long heritage of creating quality content by monetising it in the ways audiences are moving in droves to, which is getting out their credit card, using Apple Pay, buying online, ship and collect deliver, however you want to do it.”
Yet as the IAB event made plain, there are real challenges to overcome if affiliate and partnership marketing is to avoid the pitfalls of so many digital and advertising channels before it. Criticisms and obvious maturity gaps were quick to surface during panel discussions and audience question time.
A whopper is improving transparency around how commissions and affiliate partners are gauged and rewarded. It was also clear sophistication around attribution modelling to recognise how affiliates are impacting acquisition and sales through the funnel is sorely lacking. A persistent problem around understanding and balancing short and longer-term benefits from marketing investments likewise reared its head. Being willing to test and learn was another inevitable stumbling block.
“There’s a fundamental, deep misunderstanding of this channel – we just don’t understand the real basics,” said Baartse. In commenting on the results of IAB’s survey, he also saw disconnects between quality of content and commission costs among others.
“Content was rated very highly, which I 100 per cent support. But on the other hand, there was a big focus on keeping commissions low and ROI high. When we’re comparing content between New Idea to Honey and giving them both 10 per cent – which one is doing more work, adding value, contributing more to my brand? There’s a big disparity there. But you talk to people and they’ll say ‘just look at ROAS numbers’. It’s such a simplistic, bad way of looking at the world,” Baartse argued.
“People are treating affiliate as [a] holistic, largely ultra bottom funnel channel as opposed to a more nuanced, full funnel channel that it can be used as – but honestly, rarely is.”
Source Making affiliate marketing and partnerships valuable: IAB, BikesOnline, Commission
