Affiliate Marketing Needs a 'Big Tent' to Keep Growing

• Updated on: 2022-12-06
• Read original article here

For an industry with partnerships and relationships at its core, the affiliate marketing world is shockingly siloed.

Media sellers and programmatic ad-tech companies have a long history of collaboration in areas like standards and measurement. Organizations like the Interactive Advertising Bureau have dedicated working groups where partners and competitors come together to brainstorm and enact innovation, address industry pain points and find solutions that best serve all parties involved—and we should be taking a page out of their book if we want to reach our full potential.

The affiliate marketing industry, by contrast, has never had a membership quorum or a dedicated space within established industry groups. We have the Performance Marketing Association, but several working groups are either too small to push the envelope or aren’t as active as they need to be. There’s room for so much more.

As marketers prepare for a cookieless future, it’s never been more important for all the industry’s players to come together for conversations across the aisle about what we need to do to set up for success. There’s an opportunity for affiliate marketing to thrive in a post-cookie world, but if we don’t lay the groundwork now, our growth will be stunted.

Perhaps one of the biggest benefits of trade organizations and collaborative working groups is standardization. Affiliate marketing has many different players and stakeholders, each with their own individual objectives and measurements of success. This makes it difficult for the industry to prove its value at a larger scale.

Even the name “affiliate” could use some standardization. Our industry is referred to as everything from affiliate to partner marketing, performance marketing and more. Trade organizations provide a space for all stakeholders to agree on standardizations that make the industry easier to understand from the perspective of the outsider, but also more valuable and easier to navigate for those within.

Standardization can help improve all affiliate touch points and processes. For publishers, only recently has first-party data sharing become a cornerstone of affiliate, and many publishers are still just starting to develop these capabilities. Standardization around data sharing, data usage, best practices and definitions around concepts like incrementality would help us make significant progress in proving our value and garnering more spend and market share.

Another example is media. Media in affiliate differs greatly from display because it is not simply a standalone asset. Instead, it supports a promotion or offering that a brand has in market. The value of media in affiliate isn’t around clicks or views, but rather the uplift in sales it provides to that specific promotion. Today, there is no industry standard that effectively measures the success of an affiliate media buy against these unique KPIs.

Of the many digital advertising formats, affiliate is uniquely challenged by the perception that it’s simply an outdated lever to pull when you want to drive traffic. Working groups can help change that perception.

For example, collaboration at the industry level can produce primers and white papers that educate executives on the modern capabilities of affiliate marketing—proving that it’s no longer a blunt instrument for top-line sales but rather a data-powered channel that can drive new-to-file customers, reengagements, second and third purchases, high-intent (affinity) shoppers and so on.

These groups can also go a long way in educating executives on how affiliate isn’t as simple as a media buy. There are many different flavors and variations—such as content, coupons, cash back, influencers, etc.—that can meet different types of consumers or objectives.

On top of educating CMOs on the tactical benefits of affiliate, trade organizations are great at proving value by tracking real-time and anticipated industry growth. They can quantify affiliate market share and predict growth over the next five or so years with a reasonable degree of accuracy. This information can inform and motivate marketers to continue to invest their dollars in affiliate and will help convince decision-makers to pull budget from other areas of diminishing efficiency, like social or display, and reallocate to affiliate.

Working groups can also help safeguard the industry from future volatility. Take public policy, for example: As data regulations continue to evolve, and policymakers are increasingly strict on whether data usage is benefiting the consumer, a lack of organization within the affiliate industry could force regulators to lump us in with other third-party tracking solutions. We need to educate senators on the differentiation of affiliate tracking and browser extensions so that we can avoid unnecessary challenges down the road.

The “big tent” concept of organizations like the IAB is a relatively new and brilliant one. Historically, they were dedicated to serving just one piece of the puzzle. The IAB used to serve the publisher side. The Association of National Advertisers served the advertiser side. The American Association of Advertising Agencies served the agency side.

The evolution away from the tunnel vision model of organizations has been critical. If advertisers, publishers and networks don’t agree on the same goals and priorities, then we can’t deliver on the promises that we’re making as an industry.

There are new complexities of data onboarding and data usage in affiliate, and the industry is moving in the direction of rule-based, programmatic campaigns that focus on specific marketer outcomes. For instance, marketers can develop campaigns with the specific goal of driving a second purchase within a certain number of days after an initial one.

To do this successfully, there needs to be a clear understanding of advertisers’ goals, proper technical tracking and reporting capabilities, and seamless ingestion and fulfillment by the publisher—all working in lockstep. Some partners are making that effort, but certainly not all.

We need to see one another as partners, even if there are competitive differences. If we don’t come together and unify as an industry, we’re going to continue to get in our own way. If we are able to collaborate on research and develop the necessary standardizations, the potential for affiliate growth is seemingly limitless.