The Affiliate Maturity Curve: Graduating from Banners to Lifetime Value

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Let’s face it: Affiliate marketing gets a bad rap. Once considered a channel fraught with black-hat players, fraud, weak strategy, and an overall lack of transparency, affiliate marketing suffered from a reputation for opacity that did not imbue confidence and trust in partners. Most importantly, there wasn’t a sufficient level of confidence that the channel could deliver desired results and outcomes. 

The reality is that the last-click-only perception of affiliate marketing is a thing of yesteryear. Looking back, coupon and loyalty dominated the category because of this reliance on the last-click model embraced by brands. That model stymied the channel’s advancement and progression. However, affiliate is no longer relegated to rudimentary tactics like banner advertising on coupon sites. 

There are affiliate marketing providers today who stand as category innovators who did not settle for the status quo and have developed new technology and tools to address the inherent problems of legacy affiliate head-on. The real challenge for affiliate marketers now is one of perception, not value. While the tech that supports affiliate marketing has accelerated, marketers live in the past.

Advanced discovery tools have helped diversify partner composition, within programs and in the market. The expansion of affiliate to content and influencers, coupled with attribution features, has shifted spend and rewards to the partners that drive outcomes that brands value in the upper-funnel discovery stages that often help drive higher LTV. 

Workflow automations in affiliate are nascent, signaling further category development and progression on the horizon. As this evolution continues to unfold, it is critical that brands maintain the pace of innovation and are poised to reap the benefits early. But to do that requires a perceptive shift. Below are a few changes marketers can make to take advantage of the progression in affiliate marketing.

  1. Adjust your mindset. Breaking old habits can be very difficult. It requires a level of trust to let go, re-assess based on a new, more mature landscape of options, and try something new. If a marketer wants to take advantage of the technology that is redefining the affiliate marketing space, they need to reset their standard operating procedures and have an open mind as they evaluate and test the tools around them.
  2. Data is the foundation to deliver desired outcomes. In order to optimize, you must use data-driven methodologies. Going beyond the traditional tactics of affiliate marketing, one must analyze the data that is being funneled through the affiliate program. Marketers now can see on a granular level the type of consumers they are acquiring through the channel and the type of consumer each publisher type is driving. They will gain insights into individual publisher metrics such as average order value, conversion rate, repeat visits, where they fall within the clickstream, and where each publisher ranks within each publisher category. Affiliate marketing partners will provide high-level campaign performance statistics; however, it is important to marry first-party data with the performance data of each publisher to understand their true, long-term value.
  3. Diversification. No publisher is created equal, and therefore each one can appeal to a different audience – men, women, younger demos, older demos, any number of composite targets. The best affiliate tools provide a diversified supply of partners, but they also enable a marketer to bring their own partner base into the mix, opening up the possibilities of potential publishers. By understanding the unique value each partner provides, marketers must/should embrace ALL publisher partner types as part of their affiliate mix in order to maximize reach across varying audiences and demographics.
  4. Break out of your norm, and execute. Leverage the technology at your disposal and implement test-and-learn strategies. Test-and-learn informs the performance of your overarching strategy and helps you get comfortable and expand with present-day affiliate tactics that drive growth. 
  5. Adjust your balance sheet. With all of the newfound technology in your toolkit, marketers should start to leverage the data available (now available in marketers MTA solutions) to champion the notion to finance or those that ultimately control investment decisions and demonstrate how affiliate is a profit-driving entity.

Over the years, affiliate marketing has evolved from a dominant coupon and discount channel, a state that was further exacerbated by fraud vulnerability, and the last-click attribution model into a widely used, scalable sophisticated means for marketers to confidently operate and cultivate high lifetime-value customers and derive operating leverage.  

While the opportunities in the new age of affiliate marketing are vast, and your own evolution will be a gradual journey of testing, learning and building anew, the strategies listed above will help bring an affiliate marketing program into the new age and allow marketers to take advantage of new ways to invigorate programs. And invigoration by definition leads to healthy growth — which in the marketplace at hand means profitable, clean growth, that is the ultimate success story.

Mandy O’Brien is Senior Director of Affiliate Services at Pepperjam.