July 1, 2014

The Affiliate Channel Earns its Seat at the Marketing Table

iCrossing_Kunal_Apr2014_230Kunal Patel, Affiliate Strategist at iCrossing

Kunal Patel, Affiliate Strategist at iCrossing, considers the current state of affiliate marketing and explains why it now needs to be fully integrated into your overall marketing strategy

For a long time the marketing world has viewed the affiliate channel as the nagging child that pulls stunts to get attention and then gets sent to bed when the grown-ups have a serious discussion. But things are changing. Last year, the UK affiliate channel was worth some £14 billion, according to the second annual joint study by the IAB and PWC. Brands are clearly now investing heavily in the channel and with good reason.

What’s changed?

When it comes to strategy and planning across the marketing mix, marketers have consistently overlooked affiliates, seeing it merely as a ‘bolt-on’ to help achieve a campaign’s KPIs. A lack of knowledge around how the channel has developed has also contributed to it often being overlooked. But while this is still the case for many brands, things are changing. But why now?

The affiliate channel has undoubtedly had a helping hand from external forces. The recession has been a blessing in disguise for example. Over the past few years, the majority of people have become increasingly frugal. They are now a lot more savvy with their money and hunt out ways to get better value, with many turning to affiliates for vouchers as a result. This has meant that brands have had to follow suit, allocating more budget to affiliates and in turn generating greater revenue for the channel.
Another important factor has been the need for specialists. As brands started to spend more in the channel they realised that they needed experts to manage the campaigns. It was no longer something that could be picked up as a side project by the digital marketing manager. Whether that has been through hiring affiliate managers in-house or agencies with affiliate management experience, brands have ensured that they have access to the expertise to get the most out of their budget.

Leading the way in integrated digital marketing

But possibly the biggest contribution to growth has come from the affiliates themselves. As the channel is heavily based on a performance model, affiliates tend to be agile and innovative when finding ways to improve their chances of earning commission.

This drive has led them to become experts in SEO to ensure their sites rank for the keywords potential customers will be searching for. Meanwhile, the super-affiliates run PPC campaigns that often have impressive quality scores for certain keywords thanks to the relevance of their pages and they also now have huge social followings on Facebook, twitter etc., which allows them to communicate with their loyal fans on a regular basis.

The future

Affiliates are doing integrated marketing campaigns extremely well and in a way that many brands would do well to emulate. This now means however, that brands need to have the affiliate channel at the planning table from the off. If they don’t, they run the risk of adding additional costs for duplicating activities, cannibalising sales and losing out on the opportunity to capitalise on the reach of the affiliate programme.

If things continue to progress at the current pace, there is little doubt that every client will need to integrate the affiliate channel in with their other channels if they are going to get the most out of their marketing budget. It appears the marketing child has grown up and is demanding its rightful seat at the grown-ups table.