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As the affiliate channel continues to become more sophisticated, it is becoming increasingly difficult to categorise affiliates based on their promotional type.
With boundaries becoming blurred, affiliates should be assessed on their individual merits rather than grouped by their traditional category.
Historically, affiliates have been classified by their promotional type on the assumption that their methods of driving traffic will be the same. For example, all voucher code sites will all be classified as such, as will cashback sites and price comparison sites.
By using categorisation, advertisers have been able to stipulate how much commission will be paid to each affiliate type. If they want to pay lower rates to voucher code affiliates to offset the cost of offering the discount, this can be applied to all voucher code sites promoting the campaign.
There is a significant amount of crossover between affiliates’ promotional methods and how they are generating traffic to their sites will vary. This will have ramifications on their target audience and the type of customers they are able to deliver to an advertiser.
Voucher code sites are a good starting point to understand why affiliate categorisation is problematic. It is widely assumed that voucher code sites will get the majority of their traffic through consumers searching for a brand plus discount related terms.
While it is highly likely that a significant amount of traffic will be generated this way, it neglects a number of other promotional methods utilised.
The top voucher code sites have extensive email databases with engaged members. They are also able to rely on social media to distribute timely deals to their loyal followers. Typically users of these sites can be seen as being loyal to the voucher code site rather than the brands themselves.
It also ignores the fundamental fact that these are now mature shopping destinations in their own right with traffic far outstripping the vast majority of advertisers they promote and loyal customers.
Similarly, the top cashback sites are continually evolving to offer members the best offers available. With voucher codes also being offered by the likes of Quidco, can they be classified as simply just a cashback site?
All this points to a fundamental issue with affiliate categorisation, it is far too simplified. It is no longer suitable to say that an affiliate is using a single method of promotion to drive traffic to advertisers. Or indeed that, because they have a similar method of promotion, they attract the same customers.
Aside from the case of voucher code sites and cashback sites, a considerable amount of publishers are being classified as content affiliates.
What is to say that affiliate sites that offer content are not using additional promotional methods such as PPC or listing voucher codes on their sites? In fact, voucher code and cashback sites could argue their case for being content sites as they are now offering more and more content that is relevant to their user base.
How should affiliates be classified?
Rather than classifying affiliates by their promotional type and offering commissions based on this, advertisers would be better advised to understand the value of an individual affiliate’s traffic and reward them accordingly.
The value can be assessed on metrics that are important to individual advertisers but this could include elements such as; the split of new vs. existing customers, average order values or the lifetime value of customers driven by each affiliate partner.
Further information on assessing value through the affiliate channel can be found in a case study here.
In summary, affiliate categorisation is outdated. There is so much cross-over in promotional types with affiliates relying on more than one particular method to gain traffic. They are now using a number of various methods is order to attract visitors and to keep them returning to their sites.
Advertisers need to demonstrate the ability to be flexible and understand affiliates on their own individual merits and reward them accordingly, only then will the commissions offered start to reflect the value gained.