Whether your brand has an established, high-performing affiliate program that you’re seeking to optimize or you’re new to the channel and navigating its nuances, it pays to know your way around specific KPI’s—especially return on ad spend (ROAS).
What most category-leading brands know well is that affiliate marketing tends to be one of the most effective models for increasing your return on ad spend. But high ROAS is rarely realized overnight. It requires a proper understanding of what it is and what needs to be evaluated and executed within your affiliate program to maximize returns.
What is ROAS?
ROAS, or return on ad spend, is one of the more critical business metrics for online advertisers as it captures how effective your media investment was in delivering positive value versus how much you spent on that media. These insights are especially important to brands who want to identify which aspect of their media spend deserves more budget.
Historically, brands have used ROAS to evaluate the effectiveness of a specific marketing campaign, ad group and even the overall effectiveness of a specific keyword.
Today, thanks to emerging technology, brands are now also looking more closely at this KPI within their affiliate programs.
The Relevance of ROAS
ROAS is critical because it helps determine how a particular marketing initiative or partnership is contributing to a brand’s bottom line – and most brands want to make sure they’re not losing any money when it comes to ad spend.
Without considering this metric, a brand is basically guessing at whether a campaign or partnership is generating more revenue than cost, and whether or not this will allow maximization of return on future ads.
The ROAS Reality Facing Most Brands
In terms of traditional digital marketing (paid social, paid search, display, programmatic, etc.), a primary challenge for brands is that their ROAS decreases over time as they have to spend more and more to realize consistent returns.
Competition is a key component of this. The more crowded a brand’s vertical, the more they’re having to spend to compete for recognition, voice, relevance and keywords. All of these factors can decrease ROAS significantly.
Why ROAS’s Star Is Rising In Affiliate Marketing
Affiliate marketing’s prominence has grown over the past five years, in large part due to the evolution and sophistication of new types of partnerships. In some cases, these partnerships may require more investment and complex compensation structures.
One of the ways brands evaluate these new partnership opportunities is to look closely at the returns they are generating. Then, once performance has been proven and more budget has been allocated, brands and their affiliate management team are leveraging ROAS to determine how to optimize the partnership.
Another reason ROAS is a rising star within affiliate programs is because companies that are used to evaluating ROAS in their paid marketing channels are launching affiliate programs in greater numbers.
For example, direct-to-consumer (DTC) brands are increasingly adding an affiliate program to their marketing mix. Many DTC brands initially gained awareness and new customers by leveraging paid marketing, so they’re familiar with evaluating ROAS within those channels. As their brand grows and competition increases, they start looking for more cost-effective ways to diversify their marketing, elevate name recognition, improve return on ad spend and ultimately drive more searches for their brand.
And most see affiliate as the next logical step in their marketing maturity.
What’s more is that most DTC brands understand the value of working with the right partners to ensure that they’re maintaining – and elevating – their brand awareness and relevance. As such, they’re more inclined to compensate their affiliate partners up-front (e.g. a flat fee) while also compensating them (e.g. revenue share commission) after they’ve driven a conversion—even if it means a lower ROAS initially. The value is in the long-term. And the most efficient, effective way to assess that long-term is to monitor ROAS.
ROAS and the Power of Partnerships
Although affiliate is often referred to as a channel, it’s really more accurate to call it a model because it’s a framework for managing and optimizing partnerships – partnerships that many brands are leveraging to run their paid social and paid search campaigns. They’ve discovered that many affiliate partners have the expertise, bandwidth and sophistication to run these campaigns far more efficiently and cost-effectively than the brand trying to do it in-house on their own.
And the brand realizes far higher return on ad spend in the process.
Acceleration Partners’ Publisher Spotlight is an ongoing series where members of our Publisher Development team shine a light on innovative publishers from across the world.
This month, Cassandra Scarbeck, Publisher Development Manager at Acceleration Partners, chatted with Chad Loughmiller, Partnerships Success Manager with LifeWorks by Morneau Shepell.
For those that haven’t heard of LifeWorks before, give us your elevator pitch.
LifeWorks is a closed loop employee benefit platform which encompasses health & wellness, employee assistance, employee engagement, as well as discounts and perks. Users engage via desktop as well as the LifeWorks app.
Lifeworks has established relationships with more than 15,000 organizations worldwide. Tell us about some of the ways you support employees and their families globally.
We offer a variety of services including 24/7 employee counselling & coaching support and well-being content resources across all aspects of work and life.
We are also a platform for HR communication as well as building community within organizations. Weboost company culture by leveraging your company news feed to celebrate great work and recognizing peers for a job well done.
Our Perks & Savings for Life Events help employees save everyday with discounts at over 1,000 retail brands. We also pro-actively reward & engage employees physical well-being through health risk assessments, challenges and health and wellness coaching.
What are the Top 3 reasons an advertiser should work with LifeWorks via your Perks and Savings feature?
LifeWorks passes back 100% of commissions to users in Cashback. Additionally, we boost cashback 100% (funded by LifeWorks) for the first $100 spent each month!
Closed-Employee networks allow advertisers to target new customers with more aggressive exclusive offerings while protecting the wide-spread distribution of these codes.
LifeWorks is a daily work resource for our users with a highly engaged audience – users average 2.6 logins per day & newsletter open rates averaging 32.9%.
Share with our readers the various ways you are able to get your users engaged with their brand.
LifeWorks offers a variety of placement opportunities throughout the platform including home page banners, featured exclusive & cashback offers, Top 10 Merchant page, newsletter sponsorship and newsfeed posts which include a push notification to all LifeWorks app users.
Due to the nature of your business model being an employee reward, you need an exclusive offer from advertisers that cannot be found in search. For advertisers that are concerned about these offers being made available to people outside of Lifeworks, explain how they are protected.
LifeWorks is a closed-employee network that requires individual users to login through a company portal setup for each individual employer. Therefore, we find users are less likely to abuse a benefit provided by their employer.
We are constantly monitoring code usage and ensuring that any LifeWorks exclusive code is only being used within our network. As an added layer of protection, we will also work with advertisers in changing out their code on a monthly or quarterly basis, if desired.
Do you require coupon codes, or can you work with specialty landing pages created for your users that automatically apply a discount?
LifeWorks does not require a coupon code and we are happy to work with specialty landing pages where the code is automatically applied!
Can advertisers provide you with an evergreen offer?
We would only post an evergreen offer if it was semi-exclusive in nature, for example, if a coupon code was made available to all closed-employee networks.
You promote offers in a variety of verticals including electronics, fashion, food & drink, health & fitness, home, travel and entertainment. Where have you seen the strongest engagement and conversion?
We have found that there is not a specific vertical alignment. We tend to follow traditional affiliate trends, but performance is directly impacted by the strength of the offer, timing and promotional support.
In addition to discounts, you also offer cashback powered by Incentive Networks. Please describe this relationship for our advertisers.
Incentive Networks is a 3rd party white-label publisher network that allows us to track & facilitate the cashback tracking on the LifeWorks platform. The LifeWorks team manages all cashback relationships, Incentive Networks is simply used for the page setup & on-boarding.
Is there a minimum rate you require or a recommended cashback rate you suggest to advertisers in order to see the most success?
There is no minimum requirement to launch on the platform, however, we would look for a competitive cashback rate within each vertical. It is important to remember that LifeWorks passes back 100% of commissions to users. Plus, we fund an additional 100% boost for the first $100 spent each month, which allows us to stay very competitive in the cashback space.
Anything new and exciting planned for your roadmap in 2019 that you can tell us about?
LifeWorks will be launching a new Top 10 Merchant page in August 2019 which will provide for additional promotional opportunities on the platform. Additionally, LifeWorks is working on an aggressive internal on-boarding initiative to bring on all EAP only clients within the new LifeWorks by Morneau Shepell platform.
Lastly, Chad, we both live in Chicagoland. So, tell our readers… Cubs or Sox? Favorite pizza joint in Chicago? Best spot for live local musical talent in the Windy City?
First and foremost, GO WHITE SOX!
Lou Malnati’s is my go-to for deep-dish, otherwise Piece Pizzeria in Wicker Park is great for thin crust.
Kingston Mines is my favorite local place for live music, but you have to be ready for a bit of a late night!
In the event that you haven’t, here are some important learnings:
The subscription e-commerce market has grown by more than 100 percent a year over the past five years, with the largest retailers generating more than $2.6B in sales in 2016, up from $57.0M in 2011.
E-commerce subscription services generally fall into three categories: replenishment, curation, and access.
A recommendation, including word-of-mouth and positive online reviews, is a key trigger for consumers to sign up with a subscription service, particularly those for curation and access.
Subscription Services subscribers are most likely to be 25 to 44 years old, to have incomes from $50,000 to $100,000, and live in urban environments in the Northeastern U.S.
15 percent of online shoppers have signed up for one or more subscriptions to receive products on a recurring basis, frequently through monthly boxes.
It can be difficult for subscription e-commerce companies to acquire and then retain consumers.
Only 55 percent of those who consider a service ultimately subscribe, likely because people are reluctant to sign up for a long-term commitment.
Churn can dramatically undermine viability, since the cost of replacing lost subscribers could not only make it difficult to meet growth objectives but also quickly drain cash reserves.
The subscription e-commerce market has plenty of room to grow as more consumers become aware of it.
Subscription services consumers can be sticky once they find a service they like. Replenishment services have particularly high long-term subscription rates: 45 percent of members have subscribed for at least one year, about ten percentage points higher than the level for curation or access services.
These insights were top-of-mind at this year’s SubSummit, an annual conference designed and dedicated to subscription services companies.
With the theme of looking “beyond the box,” this year’s SubSummit was focused on the future of the industry. Attendees were challenged to look at new ways to take their subscription services business – and the industry – to the next level.
With so many new companies entering the subscription services space, growth and marketing were popular sessions for attendees.
From effective website user experience and learning the basics of writing sales copy to grasping paid social and paid search marketing, budding subscription service companies were provided with useful information for how to help their brand gain traction.
For more established brands looking to take their business to the next level in terms of growth and increasing customer lifetime value, sessions on partner and affiliate marketing were eagerly attended.
One panel in particular featured the head of growth marketing at one of the leading meal kit brands. Surprising to most (although not to those of us in affiliate marketing!) was his transparent, candid conversation about how significant their affiliate marketing program is to their growth and customer retention.
Here are a few of the insights he shared:
Evolving from direct response to full funnel.
Balancing volume needs with quality filters.
Differentiating in a crowded space.
Scaling past current marketing mix of paid search, paid social, display, direct marketing and affiliate.
Where to put their marketing dollars to get the most profitable customers and maximize customer lifetime value.
While their first few years in business centered around paid social and paid search to establish their name and brand recognition, results from these channels progressively declined. To achieve the same or similar results that they’d realized early on required more and more expense, yet the quality of the consumers they were attracting was lower than they wanted.
After conducting in-depth tests and modelling of all their marketing channels over multiple quarters, the data consistently showed that their affiliate program – a channel that had been fifth on their priority list – was driving the best quality at the lowest cost.
After elevating the priority of their affiliate program to the number two position and testing various ways that affiliate could be leveraged to reduce the cost of their search marketing initiatives, the brand is now taking steps to reallocate all of their Facebook spend to their affiliate program and elevate affiliate to their first priority marketing channel.
In addition to this panel session, Scott Brazina, CMO at Impact, an affiliate technology platform, hosted a Fireside Chat with David Bakey, VP of Direct-to-Consumer at Harry’s, a leading subscription service for new razor blades and shaving products titled, “The Art & Science of Partner Compensation.”
They chatted about Harry’s partner compensation philosophy and approach, and how they align incentives to customer value creation, chained commissions, transparency and more.
Acceleration Partners’ own Senior Director of Performance Partnerships, Alison Chew, also led a panel discussion at SubSummit titled, “Driving Quality Subscriptions with Affiliate Marketing.” Sharing their perspectives on this topic were:
So, you’ve decided that you’re ready to take your marketing to the next level with an affiliate program. Congrats! This an exciting time for you, your brand and your marketing journey.
Before you can begin realizing all that an affiliate program has to offer, there are three critical steps that need to be taken – and we’ll walk you through each on in this post!
Step 1. Establish a Program Management Team. Affiliate programs are nuanced. Highly effective, performance-driven and valuable, but nuanced. Affiliate marketing is not a channel that you should just set and forget – especially if you value return on ad spend (ROAS), strong brand awareness, quality partnerships and ensuring your marketing is as cost-effective as possible.
As we note on our Affiliate Marketing 101 page, there are different management options you might choose to take for your affiliate program, including in-house, agency or both. The affiliate program management option you choose can depend on a variety of factors, such as the size of your company, your level of experience and expertise around affiliate marketing, the resources available, program growth and partnership goals, etc.
Whether you choose to manage your affiliate program in-house, via an experienced program management agency or a combination of both, the main thing is to ensure it’s given the right resources, dedication and guidance to help it flourish.
For more information about assessing whether an affiliate program management agency is right for you, check out our blog post on that very subject.
Step 2: Select your Affiliate Technology Partner. Technology is what makes it possible for companies to track and measure the performance of their affiliate program as well as properly pay their partners. This technology is provided through either an affiliate network or a software as a service (SaaS) platform, not both.
Affiliate Networks – In an affiliate program, affiliate networks typically handle all tracking, reporting and payment to affiliates. In addition to providing tracking technology, some affiliate networks also provide full-service management or self-service management of a program. Affiliate networks also give brands access to a network of affiliates who apply to join their network, which also gives these affiliates access to hundreds, even thousands, of affiliate programs.
Software as a Service (SaaS) Platforms – In an affiliate program, SaaS platforms also provide companies with performance tracking, reporting and payment, however, they do not manage affiliate programs . Their focus is just on the technological aspects of an affiliate program.
Step 3: Set Up your Program. The setup of an affiliate program is a multifaceted process. Essentially, it involves having your affiliate technology team install a pixel on your checkout page, testing it to ensure that it’s working correctly, and creating program materials such as program terms and conditions, banners, text links, deals and a data feed.
Note about Terms and Conditions: It is imperative that the terms and conditions outline you’re your desired promotional methods as well as those that are not allowed so that affiliates know which tactics they may employ and which they should not. This will also provide you with some recourse should an affiliate operate in a way that is not acceptable for your brand.
Once a network is selected and all administrative items are complete, you’re ready to get started developing affiliate relationships that will drive scalable growth for your company.
For questions or to learn more about how to start or improve the performance of an affiliate marketing program within your organization, reach out to our Client Strategy Team.
Publisher Spotlight is an ongoing series, where our Publisher Development Team shines the light on innovative publishers from across the globe.
This month Viviana chatted to Domenic Carosa, Co-Founder and CEO of Crowd Media about his role, how they work with influencers, and how brands can leverage influencer marketing globally. Find out more below…
1. Hi Dom, can you tell our readers about you and what your role involves at Crowd Media Group?
Crowd Media is an Australian Stock Listed company and hence my role as CEO involves promoting the company to shareholders and potential shareholders around the world while also being involved in setting the strategy of the company and ensuring we are meeting our financial and corporate objectives.
2. How did Crowd Media Group start?
Crowd Media started in 2010 as a mobile product and marketing company. We built our own products and marketed them across various channels. Back in 2010 TV advertising was still important while these days social media and influencer marketing are now our core channels.
3. What is Crowd Media Groups goal in 2019?
Our goal in 2019 are to continue building our Agency business across “brand love” and “performance” divisions while at the same time maximizing the profit from our old legacy mobile business.
4. What’s your definition of an “influencer”?
In the purest terms, an influencer is someone that is able to truly influence others in their decisions through recommendations on social media channels. In the best industry practice terms, an influencer is a credible content creator that encourages others to become consumers of branded services and products, inspires trends, and stands as a voice over loyal fans on multiple social media channels.
5. What’s your view on micro-influencers compared to celebrity influencers?
I think both micro and celebrity influencers have value, but the effects of each on a campaign are dependent on the client’s business goals.
Micro-influencers are great for seeding a campaign and creating guerrilla marketing. They are small enough to have an authentic connection to their audience that is relatable, and their cost is typically affordable. A brand is able to utilize multiple voices within different markets and demographics to bring awareness to their product or service.
Celebrity-influencers have more of an aspirational admiration from their fans. This makes them the perfect ambassador for a brand, ideally on a long-term basis to showcase consistency towards a brand. They should be valued and used parallel to the advertising and PR efforts of the brand they promote.
6. What are the key metrics an advertiser should consider when working with influencers?
My teams look at the influencers’ engagement and authenticity. We measure the engagement rate of their audience through the reach of each specific posts, whether it’s on Instagram or YouTube, not just followers due to algorithms. Today anyone can be an “influencer” thanks to the magnitude of social media channels. When my company casts for clients, they look at the quality of the content and the authenticity of the followers.
This is based on if the influencer is an innovator or at least an early adaptor to this industry, which means that they have been building a loyal audience for a minimum of 3-4 years, they post as an expert about an actual topic versus just selfies, and that the audience follows them for inspiration on that niche topic.
7. How do you ensure that the influencers you decide to work with are a good match for your client?
First and foremost, we do our research. I believe it’s a mutual journey to create the best campaign possible. This includes a thorough review and consulting session of the brand’s business goals, campaign goals, mission, vision, marketing initiatives, etc. Once the team has the information, they can begin creating a campaign that will achieve success and finding influencers that fit the aesthetic of the brand and campaign theme.
This service on its own is actually what we call our Innovation Lab, and it allows for our company experts in research, creative, design, strategy, marketing, paid social and casting to come together for the client.
8. How do you measure the results and ROI of your influencer marketing work?
Because we specialize and are able to execute both influencer creative strategy and paid social, we provide as much insight as we can for every unique campaign that we run. This includes numbers of each promotional content created by the influencers, such as interactions, engagement, reach, impressions, clicks, views, and comments. However, our goal is to educate our clients by creating an overall analysis of the campaign, which includes numbers but also the strengths, weaknesses, and the next steps for continued success through digital marketing.
9. What does the future of influencer marketing look like in your eyes?
One direction that is becoming clear for the future is that brands have to have the right digital strategy, not just for creative concepts with credible influencers but for paid social as well. In the future, you will no longer be able to invest in influencer marketing without amplifying the reach of a branded campaign.
Overall, though, this is an incredibly exciting time for the industry as we are at a moment of change. It is slowly becoming just as important to understand the analytical numbers of each campaign as it is the positioning of the brand itself. We are lucky to have experts that have been in the industry for years and that can use their insight into the progression of influencer marketing to grow the success of our clients for the future.
10. Last word: a recommendation, an idea, a quote to live by?
Profile of a Growth Marketer is an ongoing series where we feature performance marketing industry leaders from around the globe.
We sat down with Ronnie Choi, Affiliate Marketing & Partnerships at Noom, and asked him to share his insights on the value of performance marketing, particularly for a mobile platform like Noom.
WHAT IS NOOM AND WHAT DOES IT OFFER CONSUMERS?
Noom is a mobile health coaching platform that uses cutting-edge technology to accurately monitor user’s progress towards a healthier lifestyle. Our fitness and weight-loss app provides expert advice and analysis to users to help them stay on track towards their goals. Because our platform personalizes the process and makes it relevant to the user and their specific goals, Noom helps make living a balanced, healthy life attainable and fun.
WHAT DO YOU DO IN YOUR ROLE AT NOOM?
I oversee Affiliates, Influencers, and Partnerships!
WHAT IS YOUR MARKETING BACKGROUND?
It’s actually in International Marketing. I got introduced to affiliate marketing while working at a previous company when I was tasked with growing their international affiliate business.
WHAT HAS SURPRISED YOU MOST ABOUT THE AFFILIATE MARKETING MODEL?
There’s an incredible amount of depth and it is so customizable. Affiliate marketing models will wildly vary depending on where you are and what your goals are. It’s kind of a jack-of-all trades, but it can also be hyper-focused. Your strategy is what you make of it!
FROM YOUR EXPERIENCE, HOW HAS THE AFFILIATE MARKETING MODEL ADDED VALUE TO NOOM?
There’s a very strong storytelling and branding component with affiliate marketing at Noom that ties very nicely to resonating with potential new users.
WHAT ARE SOME ADVANTAGES TO WORKING WITH ACCELERATION PARTNERS?
The speed, the professionalism, and the fun that the Acceleration Partners team brings is a big advantage! Our AP team is a great group of problem solvers and go-getters.
WHAT DO YOU SEE FOR THE FUTURE OF PERFORMANCE MARKETING?
I think attribution and incrementality will continue to be hot topics, but I foresee less ambiguity on the subject.
WHAT VALUE DO YOU SEE IN BUILDING RELATIONSHIPS WITH PARTNERS?
Building relationships is everything! Your good name is sometimes all you have.
Purple Carrot is a subscription meal service that makes it easy to cook new and inspiring vegan meals by bringing plant-based eating into the mainstream, ultimately improving health, the environment, and animal welfare. As plant-based eating becomes increasingly desired, Purple Carrot provides an easy and delicious way to eat healthy while also making a positive impact on the planet. Every week you can select three dinners from a variety of options – high protein, quick & easy, and chef’s choice. Don’t forget to check out the extra selections – add breakfast and lunch options for more veggies throughout the day.
Each box includes:
Fresh, high-quality, and perfectly portioned ingredients
Tips and tricks to up your game in the kitchen
Purple Carrot has teamed up with Acceleration Partners to launch their affiliate program with a dedicated support team, tools for navigating the Impact platform, updates on promotions and new product releases, as well as identifying strategic opportunities to work with their partners every day.
Purple Carrot and Acceleration Partners are encouraging qualified affiliates to join Purple Carrot’s affiliate program. Their program offers co-branded landing page opportunities, bonus and promotion opportunities, new creative and text links, affiliate-exclusive codes, and a dedicated account management team. Publishers can earn $25 commission on every subscription order with a tracking window of up to 30 days.
The affiliate marketing model has more than demonstrated its capacity to drive significant online revenue for brands – and does so with one of the lowest cost per action (CPA) structures and the highest return on ad spend (ROAS) of any marketing channel.
The world’s leading brands know that having an affiliate program can be a boon for sales, brand awareness, new customers, driving quality, high-value leads, innovative partnerships and cost-effective conversions – IF it’s managed properly.
If it’s not, companies could face off-brand messaging and marketing, fraudulent activity and lackluster growth, among other issues.
Fortunately, almost all those downsides can be avoided when an affiliate program is developed from the outset with an effective strategy.
The following 6 tips are essential for companies – and those responsible for overseeing their affiliate program – to carefully consider, especially if you don’t currently have a program or you have a program that’s not performing well.
1. Determine your “Why” behind starting/having an affiliate marketing program. Is your goal to drive incremental sales? Increase overall revenue? Attract a niche audience? Drive high-value leads while paying partners on a CPA basis? Increase your ROAS and decrease your CPA?
In affiliate marketing, each objective can require a different approach. For example, incremental sales efforts are usually focused on gaining new customers. As such, that strategy is likely to involve working with affiliate partners who can a) attract that audience and b) be open to getting compensated after they bring a new customer to your company.
However, if your goal is to drive quality, high-value leads – and only pay for those leads after they’ve been generated – then your partner and compensation strategy is going to be different from an incremental sales strategy.
Your goals, objectives and KPIs are all an essential part of bringing on the right partners into your program, determining your compensation structure with them, selecting the right technology platform to use for your program, developing the most effective go-to-market campaign strategy, and knowing what actions you want to track and measure. Each of these are all a critical piece of the affiliate marketing pie (i.e. the strategic output of the “Why” behind your affiliate program).
2. Get tactical with your technology. The technological components of an affiliate program should not be underestimated or overlooked. Choosing a technology partner that has the right capabilities to meet the present and future needs of your program is essential.
Want to use an attribution model other than first or last click? Make sure your technology network or platform can accommodate that. Want to work with partners beyond coupon, deal and loyalty sites? Evaluate whether those partners are open to using the network or platform you’re considering for your affiliate program. Some networks and platforms may have higher fees or limited technology capabilities that may detract certain partners from joining a program.
From their performance tracking and measurement capabilities to their fee structure and attribution aptitudes, evaluating the tactical elements of your technology partner should be a key part of your affiliate program strategy.
3. Assess affiliate types. Ten years ago, the choices of affiliate partners were more limited. Most affiliate marketing programs at that time primarily comprised of coupon, loyalty and deal sites with the occasional content blogger thrown into the mix for good measure. While those players are still certainly impactful in today’s affiliate marketing world, the affiliate playing field has expanded exponentially.
Today, brands can effectively partner with just about anyone – even other companies – through their affiliate program. This framework is called Performance Partnerships® and is one of the reasons why the affiliate marketing model is one of the most effective routes to take if you want to scale your business and build transparent, mutually-beneficial partnerships for your brand. What’s more is that the affiliate model is structured so you’re paying your partners after they’ve delivered on a pre-determined action (e.g. a sale, new customer, lead, etc.).
4. Consider the competition. For continuity, it can be helpful to check out how your competitors structure their affiliate program in terms of commission rates, cookie lengths, etc. Not so you copy them, but so you have an idea for what affiliates are familiar with for similar type programs and have a foundation for which to build and optimize your own program.
For example, if your competitors are paying out an eight percent commission to their partners, then it might be wise to do something similar. Setting your rates too low can turn high-value partners away. Too high and you may find it challenging to meet your CPA and ROAS goals. With this in mind, it is also important to build in some flexibility into your program so that you can pay high-performing, VIP partners slightly more if your goals support that approach.
Looking at a competitive analysis can also help determine what cookie lengths will be best for your affiliate program. When a potential consumer clicks on an affiliate’s link, do you want their cookie to track for one day? Seven days? Thirty days? While the industry standard is thirty days, that doesn’t necessarily mean it applies to your business model (e.g. flash sales).
5. Be mindful of budget. Affiliate marketing’s reputation for being a low cost channel with high returns is well-earned. Ensuring that’s the reality for your affiliate program requires careful thought and strategy around what a realistic budget is, including commission payouts to partners and for additional avenues of exposure (e.g. promotional events, branding opportunities, commission bonuses, giveaways, product reviews, paid placements, etc.).
While not necessary for every affiliate marketing program (depends on your program’s goals) companies are likely to see positive results, both short- and long-term, if some budget is allocated for additional program exposure.
This is especially important should you choose to work with content partners or bloggers in your affiliate program. Their readers will be more intrigued by a blog post that features eye-catching product and lifestyle images coinciding with an explanation of your product or service versus just reading text about it.
When it comes to creative, the phrase “You eat first with your eyes, then your mouth” is an apropos metaphor. Therefore, it’s important to equip partners with assets to help them AND your brand be successful.
At a minimum, it’s highly recommended to update your creative quarterly so that they reflect your site’s current look & feel and keeps your affiliate partners interested.
Having a solid strategy in place that includes these 6 important tips, will help position your brand for success and help ensure you achieve the performance goals you’ve established. Remember, what you put into your program will determine what you get out of your program.
To learn more about how Acceleration Partners can help you develop an effective affiliate marketing program, visit our Capabilities page or reach out to our Client Success Team directly.
Profile of a Growth Marketer is an ongoing series where we feature performance marketing industry leaders from around the globe.
Sally Beauty is the world’s largest distributor of professional beauty supplies and provides the channels that allow manufacturers of beauty supplies to reach customers, both professional and non-professional. Operating in over 4500 stores throughout the world, Sally Beauty’s global presence has allowed them to truly capitalize on the performance marketing channel.
To better understand their approach and tactics, we chatted with Mary Osako, Director of Digital Strategy at Sally Beauty.
WHAT DO YOU DO IN YOUR ROLE AT SALLY BEAUTY?
I lead Sally Beauty’s digital marketing and marketplace initiatives. I am responsible for driving traffic, new customer acquisition, customers’ digital interaction with the brand, and managing our marketplace ecommerce.
HOW DO YOU EXPLAIN WHAT YOU DO TO YOUR FAMILY AND FRIENDS?
I tell family and friends I’m responsible for ensuring Sally is top of mind for any hair or beauty needs, and for all Sally Beauty ads they see online and on social media.
HOW DID YOU GET STARTED IN THE WORLD OF PERFORMANCE MARKETING?
I was first exposed to performance marketing when I was working in the fashion industry. I was working with a brand who had a well-established affiliate marketing program which we used to partner with influencers, find brand ambassadors, and increase brand loyalty.
WHAT DO YOU SEE AS SOME OF THE BIGGEST CHALLENGES IN ONLINE MARKETING TODAY?
Providing personalized and relevant content during each stage of the customer’s journey. In retail, it’s easy to get wrapped up focusing on products and promotions, and lose sight of the customer and their needs.
FROM YOUR EXPERIENCE, HOW HAS THE AFFILIATE MARKETING MODEL ADDED VALUE TO SALLY BEAUTY?
The affiliate marketing model is effective and cost efficient. The partnerships developed through affiliate marketing allow us to extend our brand reach and stay top of mind in all channels where our customers are present.
WHAT HAS SURPRISED YOU MOST ABOUT THE AFFILIATE MARKETING MODEL?
I’m continually surprised by the growth and partner mix of our affiliate program.
WHAT ARE SOME ADVANTAGES TO WORKING WITH ACCELERATION PARTNERS?
Acceleration Partners is the industry leader with knowledge and experience that deliver results. Our client services team at AP is wonderful and I view them as a great extension of the Sally team. They are truly vested in the business and continue to bring new partnerships and opportunities that effectively grow the program.
Today, brands can partner with just about anyone on a performance basis via an affiliate program.
How? Because of the affiliate model’s unique ability to simplify tracking, reporting and payment to partners.
What’s more is that, via an affiliate program, you’re paying these partners on a performance basis – in other words, after they’ve delivered a pre-determined action (e.g. a sale, new customer, lead, etc.).
Taken together, this makes forming new, multifaceted marketing and business partnerships far more efficient, scalable and cost-effective.
In addition to benefitting your affiliate program, these partnerships can also add value to other teams within your organization, including: Customer Service, Business Development, and PR and Social teams.
Challenge: Almost every established company has a customer service team. These teams get various requests throughout the day ranging from customer questions and issues to inquiries from content creators (influencers or bloggers) looking for free products to review. Or, perhaps they want to engage with your brand through a sponsored giveaway or unique discount for their readers/followers.
If the only response your customer service team can give to these content creators’ request is “no,” that can leave that influencer or blogger with a negative perception of your company and brand.
Solution: Provide your customer service team with a script for this exact purpose. Something that conveys that your brand would love to work with these content creators and that you value that they are a fan of your company, products or services.
Here’s an example: “We’d love to work with you! The best next step is for you to sign up for our partner program. This way you can earn when you promote our brand. Once you’re an established partner, there’ll likely be opportunities to partner on giveaways, product reviews, etc.”
Instead of saying “no, we can’t offer you a free product to review or a special code for your readers/followers,” you’re saying “Yes! We value you, we want to work with you and here’s the best way.”
This allows high-value – potentially game-changing partners – to connect with your brand.
It also helps the customer service team feel like they are giving someone an answer and resolving an issue without saying “no.”
Taken together, this helps your brand grow in a low-cost and efficient way.
Challenge: Similar to customer service teams, business development teams tend to receive a lot of inquiries from potential partners wanting to engage with your brand in different ways. However, the business development team often has to turn the majority of these potential partnerships away, usually due to the size of the opportunity.
While every business development team is different and uses various metrics for determining whether an opportunity is worth their time, effort, resources, focus etc., the reality is that creating and setting up strategic partnerships – of any size – can be very time-consuming and resource intensive. As such, these teams tend to prioritize the larger partnership opportunities and decline the small and mid-sized opportunities.
Although understandable, this can often mean that companies miss out on opportunities with partners that, while smaller, have the potential for being just as high-value as a larger partner.
Solution: Bring your affiliate marketing and business development teams together so they can establish an understanding for how a “minimum opportunity size” is defined and how the business development team determines whether to move forward with an opportunity.
Once that’s established, then a collaborative process can be created to identify when and how to move those opportunities that fall outside of that minimum opportunity size forward through the company’s affiliate or partner program.
Instead of saying “no” to these potential partners and turning them away, the business development team can now say, “yes, we’d love to partner with you and can do so via our partner program.”
Another area where the affiliate model can add a lot of value to the business development team is when there are partnership gaps. Business development teams will often establish a number of different strategies and opportunities they want to tackle, but they don’t have time to pursue them all.
When these time/resource gaps occur, the affiliate marketing team can step in to support these partnerships by bringing them in via the affiliate program. This allows the partnership to be tested out within a controlled, efficient environment and then evaluated with careful tracking and reporting.
This structure opens up a whole new world of opportunities for business development teams to test new types of partners and ensure valuable results can be realized before more time and energy is allocated to scale the partnership.
PR and Social
Challenge: Similar to the customer service team, PR and social teams also regularly receive inquiries and partnership requests from influencers and content creators, many of which the PR and social teams are unable to accommodate due to time, resources and bandwidth limitations.
What’s more is that most of these partner inquiries simply aren’t going to give your brand the return that you’re looking for. As such, PR and social teams tend to turn these influencers and content creators away.
Similar to the customer service team situation, this rejection can leave these potential partners – who are also likely to be your customer— with a negative perception of your brand, which is never good.
Solution: Instead of turning these influencers away, your PR and social teams can suggest that they join your affiliate/partner program. In having them do this, your company is able to gain all of the abovementioned efficiencies and streamline the operational aspects of the partnership, including tracking, payment and reporting.
Since influencers are accustomed to receiving a flat fee, a sponsorship fee or something similar in exchange for creating a blog post or social post, it may make sense to structure their compensation on a performance plus basis. This means that you may pay them a commission or flat fee for a desired action (performance), but then you’d also give them something extra, perhaps a free product to test out as well. That’s the “plus” element.
It’s also important to keep in mind that influencers are top-of-funnel and will likely need additional support from the brand, whether that be through content or promotions, to drive those down-funnel actions.
The potential for these types of partnership arrangements is significant. As your company grows and as the influencer’s following grows, the influencer typically ends up earning more than they would have with just a flat fee because they’re also receiving a commission. This mutually beneficial partnership structure ultimately incentivizes them to focus more on promoting your brand.