Sean Hargrave
Sean Hargrave 24 July 2023
Categories Affiliate Marketing

Smart Marketers Use Affiliates Strategically, Thoughout the Funnel

While some may be held back by a misperception that affiliate marketing is mostly a route to cashback and voucher sites, those in the know are using the channel strategically throughout the funnel. As they do, their data-led decisions, made possible by the latest technology, are driving up ROI to levels other channels can only dream of.

That was the finding of London Research’s new report about the channel in partnership with SaaS partnership management solution provider, Partnerize.

By talking to people who are immersed in the channel, it soon became clear that affiliates is a worthy channel in its own right, but is proving particularly attractive to marketers who have hit, what they call, a ‘Google limit’.

With little additional ROI coming from putting more money into search and display, as well and perhaps social media ads too, marketers looking to drive extra value are using the latest affiliate technology strategically, at all stages of the customer journey.

By using a SaaS platform, they can pick partner sites and apps that will help drive awareness at the top of the funnel, consideration in the middle and then drive incremental sales at the bottom.

They are achieving this through acting on real-time data to decide which partners are most suited to each campaign and how incentives can be tailored to that part of the customer journey.

A typical approach, the research found, was for partners at the top of the funnel to be offered attractive incentives, while at the purchase end of the funnel, when price may have become an issue, rewards tend to focus on cost.

Raising Awareness, Driving Sales

Using affiliates more strategically, rather than purely tactically, is paying huge dividends for forward-thinking marketers, such as Lee Carter, Head of Affiliates at online fashion outlet, Otrium. He describes the big breakthrough as supplementing discount sites with campaigns targeted higher up the funnel.

For some people, affiliates get stuck in that traditional space of discounts and cashback because it’s very good for driving revenue from those customers that maybe just need that little extra push to get over the line,” he says.

To grow our business, though, we’re now doing a lot with affiliates in upper- and mid- funnel exposure. We’re working with a number of different content partners and we’re already starting to see good results with great articles on big-name websites. When you’re looking at brand awareness, you might not have ROI as your key metric, but rather a branding metric. We’ve been fortunate – although very much by strategic design – because not only are we creating brand awareness, but people are clicking through and discovering us and they’re also going on to purchase.”

Data Unveils New Sales

Another benefit offered by the latest affiliate technology is that not only can networks of partner sites be built up and scaled, each property can be assessed by the incremental sales it delivers.

It is always a fear that affiliate programmes may cannibalise sales but with a transparent technology partner, marketers are now able to see if a site is simply delivering back existing customers or doing more heavy lifting to boost the bottom line with additional sales.

This data is invaluable in deciding which sites a brand will continue to work with and which it may take off its network pay lower commissions.

To get these benefits, though, marketers who are in-channel warn that the first steps must take towards realising improved results is education.

Many senior marketers and board members are far more familiar with search marketing and display than they are affiliates and so marketers wanting to improve ROI and use the channel more strategically must first convince colleagues. This has certainly been the experience of Adam Davison, Digital Marketing Manager at Deliveroo.

The first hurdle affiliate marketers have to get over is upskilling key stakeholders and decision makers on the importance of the channel and its effectiveness in driving volume,” he says. “To start with, you spend a lot of your time teaching internal teams about the opportunities available to them through the channel. In order to get your hands on the budget required to grow the channel, you have to become a salesman for the channel internally and promote its benefits regularly to ensure it is considered when budgets are created.”

Marketers who have had to have these same conversations reveal starting small is a good idea. Then, when results prove the channel delivers higher ROI than more traditional routes to market, and can be made to work throughout the funnel, CMOs are more willing to fight the corner for more budget.

At that stage, brands can start to wean themselves off over reliance on the tech giants and start building and managing their own network of partner sites.

Download the London Research/Partnerize ‘Putting the strategy into affiliate and partnership marketing’ report to learn more.

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