Does affiliate marketing have a PR problem?

If all you’re seeing is a conversion tactic at the top of the marketing funnel, your business could be missing a lot of affiliate’s potential value.

Reframing affiliate as a strategy can open up a whole raft of new possibilities, says Nick Fletcher, SVP Northern Europe at Rakuten Advertising

Some readers may not actually agree that affiliate marketing has a PR problem. If that’s the case, I’d bet that you’re too close (the same could be said of me, by the way). 

You might be involved in the strategic implementation of affiliate in a forward-thinking advertiser. Or perhaps you’re a publisher building a broader offering to help advertisers find, engage and move customers along the sales funnel. You’re seeing first-hand how affiliate has been transformed, but you’re at the coalface.

We can all benefit from taking a step back at times. Before the summer, when we hosted the first meetings of the Rakuten Advertising International Collective (RAIC) – made up of leading advertisers and publishers from around the globe – it certainly felt like we’d given ourselves a bit of room to breathe and reflect. It also gave us the opportunity to gather the insights and examples that formed the basis for our recently-published A 5-stage blueprint for high-performance affiliate marketing programs.

Despite the fact that RAIC is made up of advertisers and publishers that I’d consider at the cutting-edge of strategic affiliate marketing, as a group they’re self-aware enough to know they don’t represent every marketer. And with that comes the view that affiliate marketing is still inhibited by a worryingly outdated perception.

A key misperception: affiliate marketing is a tactic for conversion

There are two misperceptions there, in fact: that affiliate is a tactic, and that it’s only about conversion.

Accepting that affiliate marketing has transformed from a tactic to a strategy is fundamental in appreciating the value it can bring to your business. A strategy defines the overall approach to how you’re going to achieve your goals; tactics are the discrete things that you do to execute on this strategy. 

Take traditional advertising. While a tactic might be to create and run a print advertisement, the strategy will define how the different advertising channels combine to influence the audience.

Affiliate marketing is the same. A high-performance affiliate marketing strategy will combine multiple affiliate publisher models – from content to comparison to cashback to coupons and more – to support commercial goals throughout the funnel. Attracting and acquiring new customers from previously untapped demographics or regions, introducing and promoting new products, positioning brands appropriately… all can be supported through modern affiliate.

I’d be crazy to argue that conversion isn’t one of the most important goals of affiliate marketing, and a critical one at that. The ability of affiliate to generate sales and revenue is foundational, and it’s often the place where many advertisers start. Unfortunately, it’s also one where many of them remain. That misses a huge opportunity.

Taking the full-funnel view

Consider the elements of typical customer journeys. A broad online search which leads to content and reviews and then maybe onto price comparison. An influencer post which sparks specific product interest, before a search for a coupon or voucher. A post on Pinterest might lead to the advertiser’s mobile e-commerce site, before the customer selects the payment method offering the most advantageous benefits.

Modern affiliate marketing can play a role in every one of the steps in the customer journey, yet too many still see it as a method of converting a customer at the point of purchase. 

Effective attribution has played a role, of course. Affiliate marketing aligned to last-click conversion makes attribution and commission payments simple. But much of the increasing sophistication of affiliate marketing – and the investments made by publishers in broadening their own offerings – has been based on the ability to apply attribution and Multi-Touch Commissioning further up the sales funnel, along with effective in-app tracking. 

Using data to define, justify, convince and grow

In defining any marketing strategy, the use of data is paramount. One of the striking aspects of the discussions in our RAIC meetings – and which is one aspect highlighted in our blueprint for high-performance affiliate marketing – is how much data is used in modern affiliate programs. 

Data comes from both the advertisers and publishers – after all, finding the sweet spot between an advertiser’s target customers and a publisher’s audience is central to success. In forward-thinking engagements both parties see the benefit in transparently sharing this data to better inform program development.

And while data is essential in planning, it’s also critical in measuring performance and this, in turn, helps support the argument to make affiliate marketing a central part of an advertiser’s marketing strategy. As RAIC member and affiliate marketing specialist Josh Collins put it: “The more information and visibility we can give the business about what we’re doing and how it’s contributing, the more buy-in we get to grow our affiliate marketing strategy.” 

A universal perspective among participation in our RAIC meetings was that aligning the affiliate marketing strategy and KPIs to the overall business objectives, and regularly communicating its progress and success, is the route to further internal commitment. In turn, this changes the internal perception about the value of affiliate marketing.

Being the champions of affiliate 

There can be a tendency, in all aspects of life, for those who ‘know’ to be dismissive of those who don’t. This doesn’t help anyone. 

For those of us who are close to affiliate marketing, who have seen its transformation as a strategic marketing activity, there’s a vested interest in helping educate our broader marketing stakeholders, and to bring the perceptions of affiliate right up to date. 

Few marketing approaches can measurably move a consumer from being an unknown individual to a loyal customer, but this is the strength of affiliate marketing. A broader understanding of this will not only expand the use of affiliate within organisations, it will support the career aspirations of affiliate marketers themselves.

By Nick Fletcher

SVP Northern Europe

Rakuten Advertising