How to know if affiliate marketing is right for me

Affiliate marketing is an integral channel to add to your digital acquisition mix from a cost efficiency, brand awareness and ROI standpoint.

In a nutshell, the channel operates on a performance-based model in which a publisher is awarded a commission for their part in driving a sale for an advertiser. Publishers promote brands, products and services using their unique tracking link, which then sends traffic to the brand’s website. The publisher is then rewarded a commission when a customer clicks through an affiliate link, goes to the advertiser’s website and performs the commissionable action, e.g makes a purchase.

Affiliate marketing is a dynamic and adaptable channel, suited to many different brands, varying in sector and size. Offering full funnel opportunities, the affiliate channel allows brands to run activity in a dynamic way, driving focus where best suited depending on seasonality, business goals and their wider marketing strategy across other channels.

That being said, it is still important for brands to understand whether affiliate marketing is the right channel for them, and if yes, when the right time is to launch activity.

Key considerations:

The size of the brand

Brands of all shapes and sizes can utilise affiliate marketing and see success, but your strategy needs to be adapted accordingly and expectations set realistically. Each brand’s road to success can look different and it’s important to understand your brand’s existing position in the market, and then decide your strategy.

Brands with an existing strong presence in their sector are likely to have a more linear road to success when launching an affiliate programme, being able to tap into existing customers to grow loyalty, reach new audiences through targeted partnerships and gain market share through competitor targeting activity. Smaller brands will need to be open-minded and ready from a budget perspective to invest in upper-funnel activity in order to grow brand awareness and engage new audiences. Once emerging brands have hit the sweet spot of driving regular new traffic to their website & increasing their visibility at the top of the funnel, they are then likely to see more success from middle and bottom funnel partners as a result.

Budgets

One of the affiliate channel’s many attractions is that it is performance-led. Brands can enter the space with low risk and see strong return on investment. Whilst a lot of partnerships are CPA based, meaning you pay a % of the sale driven as a commission to the publisher responsible, it is also worth considering what additional budget you have available outside of acquisition costs.

Ask yourself, do I have the budget available to invest in upper funnel content? Do I have a gifting budget available to drive influencer activity? Am I open-minded to run paid exposure with key partners around peak periods? If your answer is yes, your affiliate programme will go from strength to strength and the more you regularly optimise partnerships, test and trial paid campaigns and launch new activity, the more data you will accumulate to inform future decisions.

If your answer is no, that’s also okay. Not every brand has the additional budget readily available to invest into the channel, but your success will need to be driven from consistent relationship building with publishers, being dynamic with commissioning and having a strong incentive proposition.

Clear value proposition

In order for publishers to fully understand your brand and therefore promote you in the best way possible that aligns with your messaging, ethos and goals, you need to have a clear value proposition that sets you apart from competitors. This then needs to be communicated well with your partners, through pushing USPs in messaging and creative and offering competitive incentives.

Giving publishers everything they need to have a deep understanding of your brand, then enables them to position your brand in the best way and to the right audiences, leading to a higher chance of conversion.

Having an open minded approach

The best affiliate programmes are built from having an open minded approach and having the willingness to test and trial new campaigns. The opportunities within the space are endless, and can unlock new heights of success for your brand, but being open to target new audiences, launching new partnerships and trialling different commission and incentive structures is key for this success.

Wider marketing mix

An important consideration to make when deciding whether to dive into the affiliate world, is what does your current marketing mix look like? Do you have a reliance on a particular channel? Are you lacking in a certain area of the buying funnel? Do your marketing channels work in silo or do you have a strong omni-channel strategy? Answering these questions is key to understanding where affiliate marketing can fit into your marketing mix, and what activity would be most effective.

You’ll have gathered by now that the affiliate channel is very dynamic, and depending on your area of focus, you can easily adapt your activity accordingly. For example, if you are finding yourself overspending on paid shopping ads, you can test scaling back in certain areas and fill the gaps with an affiliate CSS partner working on a CPA model, or if you are missing a loyalty element to your value proposition, you can easily offer rewards and enhance customer advocacy through affiliate partnerships.

Competitor landscape

If your competitors are active within the affiliate space, it’s a strong indicator that your brand should have presence in the space too. Being visible and findable in the same places (same publisher sites) as your competitors enhances your brand’s chance of winning customers, especially if you position your incentives ahead of your competition.

Being the first in your sector to branch into affiliate marketing is also beneficial, giving your brand the edge over others in your sector and having the opportunity to tap into new audiences that your competitors may not have reached yet.

Understand your customer

A large part of affiliate marketing is match-making. This starts with truly understanding your customers, understanding their buying habits and interests, and then creating typical customer personas off the back of this. With these customer personas, you can then ‘match-make’ affiliate partners accordingly. Sometimes, of course activity won’t be as targeted, and focus may be at a broader level, but having a large pool of publishers readily available in many different niches should you want to really tap into segmented areas is a really exciting area of opportunity for brands in the affiliate space.

Resource

Building and managing a successful affiliate programme requires regular communication and collaboration with publishers as well as consistent optimisations and data analysis to keep momentum moving, hence why it’s important to have resources available either internally or externally to cover this for you. In cases where affiliate programmes are launched and then go un-managed, this can lead to a misalignment between the publishers promoting your brand and your branding, messaging goals and preferences. Without regular optimisations and publisher activity, your competitors that are more active within the channel will potentially be prioritised over yours, meaning you may lose out on market share in the space.

So, to recap, once you’ve made key considerations around your brand’s current positioning in your market, measured budgets, aligned goals and KPIs with your wider marketing mix and established a clear value proposition, you should come to a good understanding of whether affiliate marketing is the right channel for you at this time.

At Embryo, through our full programme management, we cover everything from the day to day admin & up-keep of an affiliate programme, through to the long-tail strategies and optimisations. If you are interested in hearing more about our affiliate marketing services, please get in touch.

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