The Affiliate Channel Is Developing At Speed, And Program Optimisation Is Critical In Order To Reap The Sector's Rewards

Sam Crocker, impact.com RVP Sales, tells us about affiliate channel optimisation, and how maximise your chances of success in the sector.

Hi Sam, thanks for talking to us today. What is the state of play with the affiliate channel as we move deeper into 2023?

In many ways, the affiliate channel has always been something of a poster child for performance marketing, and it continues to go from strength to strength in terms of growth and popularity among advertisers. In fact, today the sector is worth an astonishing $12 billion dollars, with as many as 80% of brands running affiliate programs. So we’re seeing the channel mature and expand. That’s no real surprise, given brands with mature affiliate programs gain as much as 28% of their revenue from the sector, and advanced operators have the potential to boost their revenue by as much as 30%. Affiliate really is on the up.

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Clearly there’s a real incentive to run an efficient affiliate program. How can brands optimise their campaigns for success?

Well, the world of digital advertising is fast paced, and the affiliate channel is developing at speed, so program optimisation is critical in order to reap the sector's rewards. And the more we understand the affiliate space, the more we can recognise - and capitalise on - its nuances.

For example, most affiliate programs reward their partners based on the last click they make. The conversion click. Yet, we now know that a customer’s decision to buy is often based on multiple encounters with a brand at various stages of pre-purchase research. One affiliate partner might introduce a consumer to your brand, whereas another might be responsible for that final push over the line that seals a conversion. What we’re beginning to realise is that each partner in this process is important, and each should be rewarded in order to optimise, and maximise, the performance of a campaign. Each partner plays their part, and brands should reward them accordingly.

How about opportunities for campaign enhancement from a technical perspective?

In 2024 the cookieless future will (probably) become a reality, and this will make it harder for brands to reach their target audience. The affiliate space offers a great workaround if you can optimise your partnerships towards engaging creators that naturally align with your brand… ultimately rendering cookies redundant. That’s because creators benefit from an engaged, opted-in audience and their authentic ecosystems will help a brand become trusted in the eyes of that audience. All in a cookie-free fashion.

You mention the cookieless future, it feels like those with affiliate programs are sleepwalking into the associated issues?

That’s exactly right, and there is an urgent need for brands to optimise their campaigns in order to protect their affiliate programs. Why? Because the majority of affiliate providers use cookies within their tracking setup. Without those cookies many affiliates will struggle to prove their value to a campaign. To truly future-proof your tracking, application programming interface (API) calls, or server-to-server tracking, are the best cookie-free option.

The economic downturn is providing quite a challenge for the digital marketing world, but does it offer any opportunities for the affiliate sector?

Absolutely it does. This is a challenging time, but also a good moment to take stock of your affiliate programs, see what’s working, optimise for the future and do more with the channel. A good start is to strengthen your partner relationships, be transparent and ensure they have the necessary resources for success.

Conversely, discard partners that aren’t working, and attract new ones. Invest in recruitment during a downturn and keep commissions flat to offer what partners want at the moment: consistent payouts. Calibrate your campaign message away from fear based messaging (there’s enough of that around), and build customer loyalty because, as the old maxim goes, it costs five times more to acquire new customers than retain existing ones. Finally, reduce wastage and improve efficiencies by leaning on data to ensure your campaigns are fit for purpose, and can prove their worth.

Finally, away from broader strategic decisions, are there any quick-wins brands can use to do more with their campaigns?

There are numerous ways to help affiliate campaigns work harder. For example, it’s no secret that affiliate publishers that produce regular blog content earn more revenue. Ensuring partners have all the necessary resources to produce such content, and encouraging them to produce a regular content calendar, will maximise campaign success. On a slightly different note, affiliate fraud is on the up (in sync with the sector's expansion), and combatting this will be increasingly important. We never advocate brands to auto-approve affiliates, and it’s critical to be very clear on your T&Cs (and enforcing them).