Michael Nutley
Michael Nutley 31 July 2023

Strategic Thinking and Integration Are the Next Steps for Brands’ Use of Affiliate Marketing

You might not be using affiliate marketing as an integrated, full-funnel channel, but there’s a good chance your customers already are. That’s one of the key messages from new research published by specialist affiliate marketing agency Gen3 Marketing, in conjunction with London Research.

The report – High Performance and High Demand; The reinvigorated, full-funnel potential of affiliate marketing – compares the ways consumers and marketers use the channel, and comes to some surprising conclusions.

The main one is that, although around half of marketers are using affiliate approaches in the inspiration, awareness, acquisition and conversion phases of the customer journey, affiliate marketing is still not guaranteed a say when campaigns are being planned.

Almost two-thirds of companies (62%) say their affiliate marketing is separate from their omnichannel strategy, and 70% say it is a tactical rather than strategic channel.

“Affiliate marketing has long been a separate initiative from other digital marketing strategies,” says Kerry Curran, Chief Growth Officer, Gen3 Marketing. “While it’s promising that advertisers are increasing affiliate budgets, there is still a significant opportunity for brands to incorporate affiliate publisher placement strategies into their omni-channel media strategies. Brands that include their affiliate specialists earlier in the strategy and planning process will benefit from the scale, reach, and business results the channel offers. Those that value the impact, and prioritize investment, will continue to see their customer base and sales grow.”

Brands and Consumers Alike Turn to Affiliate Channels

The research also shows that affiliate marketing is becoming more popular with marketers and shoppers alike, as a result of the tough economic climate. Consumers are tightening their belts; the report shows they’re significantly more cost-conscious than they were a year ago, and much more likely to be looking for deals.

This isn’t just increasing the influence of deal/loyalty sites at the bottom of the funnel. Deals through affiliate publishers also play a major role introducing consumers to new brands, increasing their basket size, and fostering loyalty.

Similarly, brands are looking for more accountability from their marketing; they’re putting more emphasis on channels that deliver measurable return on investment and return on advertising spend. Almost two-thirds of marketers surveyed for the report (62%) say they’re planning to increase their budgets for affiliate marketing over the next 12 months.

“Affiliate was a standalone channel that was overlooked for a really long time, and it’s the last untapped channel that hasn’t been completely wrung out, unlike paid search and SEO, media, and marketplaces, where our customers have gotten all the efficiencies and all gains they can,” says Michael Tabasso, CEO, Gen3 Marketing. “A lot of CMOs are saying this is the last unfired arrow in the quiver, so they’ve got to take a hard look at it now.”

Senior Level Understanding is Still Lacking

According to the research, the biggest challenge marketers face in trying to capitalize further on affiliate marketing is reliance on other traditional and digital channels. This is seen as a barrier by almost three-quarters of respondents (73%). Other key challenges include lack of budget prioritization (71%), and lack of resources and experience (72%).

Many of these barriers can be traced back to lack of understanding and buy-in at senior level.

Interviewed for the report, Maura Smith, CMO of partnership management solutions provider Partnerize, said: “We’re seeing examples where affiliate and partnerships are being employed more as a strategic growth driver for organizations than in years past. However, that’s not to say there aren’t still obstacles in breaking through to the C-suite to get them to pay attention, and understand and appreciate the value that affiliate and partnerships drive on behalf of their business.”

The research backs this up. Almost half of respondents (46%) strongly agree they have a strong understanding of affiliate marketing, but only 39% say the same about their senior leadership. It also highlights the importance of trusted measurement and attribution, which is a challenge for a quarter of respondents.

Without this, it’s hard to gain buy-in from senior leadership. That in turn makes it hard to win greater resource, including agency support, to drive an integration agenda, and to generate enthusiasm for trying new channels rather than relying on traditional ones.

To read the full report, High Performance and High Demand; The reinvigorated, full-funnel potential of affiliate marketing, click here.

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