As the affiliate marketing industry is facing new challenges, affiliate management is becoming a progressively intricate endeavor. However, opportunities to market your business successfully through affiliate programs are now more plentiful than ever.
Today I am thrilled to bring you a Q&A with Kevin Edwards, former Chair for the IAB’s Affiliate Marketing Council, and currently Strategy Director at Britain’s largest affiliate network, Affiliate Window.
What are the major challenges with which you see affiliate managers struggle?
An affiliate manager client, agency or network side will face a multitude of challenges. One of the key ones increasingly being asked by decision makers, concerns the value the affiliate channel adds.
This in itself is client specific but we’ve certainly ramped up the resource we’ve made available, focusing on the key themes of transparency, insight and incrementality. We all know affiliate marketing is a powerful driver of sales but given the necessity to convert sales, working hard to sit at the end of the purchase cycle, inevitability questions are asked about how much that converting traffic cannibalises ‘initiating’ channels.
It’s imperative account managers don’t baulk at this challenge because invariably we’ve found the data stacks up pretty favourably for the channel. Part of the discussion is the challenge of multi-channel and attribution. This in itself cannot be tackled simply by looking at the number of clicks involved (a click is an arbitrary interaction, no matter how many times you count it), rather clients should be looking at the entire journey from initial click through to transaction and longer term value derived from the customer generated.
Beyond this, resource is always a stretch, especially with commercials being squeezed. We all know you get out what you put in from affiliate marketing, it’s a wholly organic proposition, but very often that’s a mindset that decision makers aren’t familiar with. We owe it to the industry to educate ongoing about the intensive nature of a well run affiliate campaign.
What do you view as the main affiliate program growth opportunities?
Performance or acquisition marketing is now firmly mainstream. Whether the activity is run according to CPA metrics or worked back to an effective acquisition cost, it’s a model marketers are completely familiar with. Therefore we’re now starting from a much more informed position than a few years ago. It’s now acceptable to talk about the realm of performance marketing: sales, quotes, leads, call tracking, m-commerce, all of them sit comfortably within the remit of an affiliate program and represent additional opportunities to grow existing business in new and complementary ways.
Mobile commerce is a huge growth area for us. We’re on the verge of hitting double digit sales through mobile devices and traffic has leapt in the last year to nearly one in seven clicks originating from tablets and handsets.
This provides an amazing shot in the arm for those affiliates who have meticulously spent the past few years growing mass, engaged databases of savvy consumers. They are the ones who have been first to market with mobile technologies, turning them into multi-channel marketers who can offer additional routes to market for the advertisers they feature.
It’s also feasible to look beyond performance and start looking at the halo effect that affiliate sites can offer through branding. Certain sectors and affiliates are now selling tenancies and working to hybrid commission models based on deeper and more strategic relationships with their key clients.
Let turn to the EU e-Privacy Directive now. Is affiliate marketing industry in danger here? And does Affiliate Window have relevant solutions? After all, you’re the biggest network in the UK and Europe.
A directive by its nature is transposed into countries’ legislatures in different ways. So what has happened in Holland, for example, is quite different to the UK approach. This lack of harmony across Europe creates our first problem. The benefit for UK marketers is the transposition has been business friendly and ‘light touch’. As the largest digital market in Europe, the UK is looking to take a lead in order to minimise disruption to online business across the continent.
The approach taken by the UK regulator has been consultative and discursive. They have stated they see the May 2012 enforcement deadline as the start of an ongoing process rather than the absolute point of compliance. We’re still waiting for additional insight from them but they’ve said that the notion of ‘implied consent’ carries significant weight if companies are willing to be transparent.
We wanted to ensure our publisher and advertiser base was fully up to speed with the potential impact of the regulations on affiliate marketing so we released ongoing guidance and insight as well as a plug-in for those seeking a technical solution.
We’re also fortunate in that the IAB’s Affiliate Marketing Council is a strong force in the UK and networks have come together to produce an online, consumer facing guide that addresses the issues from an affiliate marketing perspective. I’m pleased to say that Affiliate Window was able to contribute significantly to the content on the site.
In October of this year, you’re speaking at Affiliate Management Days East 2012, participating on “The Role of the Network” panel. What are the top 3 things that affiliate managers (and merchants) should be looking at while choosing an affiliate network?
I suppose the first one would be make sure your network can do the core things well. Tracking, reporting and invoicing are the cornerstone of any network but I’m still surprised by how some well established networks falter on one or all of these. I’m proud of Affiliate Window’s track record in launching robust first and third party tracking and frequency of affiliate payments. If I was an affiliate I would also want to know my financial exposure in these uncertain economic times. Affiliates should be challenging their networks to understand what their rights are with so many advertisers going to the wall.
Innovations are a useful indicator of how much time and resource a network is investing in the industry. We can never stand still so I would also be challenging my network to demonstrate what new technologies or systems they’ve implemented to help the industry to continue to grow and evolve.
Finally to reiterate my earlier point, a network should be a consultative partner. Managing an affiliate programme isn’t about uploading banners or processing sales: anybody can do that. It should be about helping an advertiser to understand the value of those sales. Only then will advertisers have confidence to continue investing in their affiliate program.
I am constantly amazed at the innovations with which affiliates come up year after year. What, in your opinion, are the top 3 areas of opportunity for affiliates these days?
Multi-channel is an area that will continue to grow. Online to offline is the next frontier for many established businesses with an established presence and affiliates are starting to play a significant role in this from price comparison to couponing.
I’ve yet to see video make any impact from a performance point of view: great branding and perhaps affiliates should be selling themselves more as an advertising opportunity beyond direct response.
I’m also incredibly impressed by the way certain larger affiliates are creating their own powerful retail brands. This is game changing as they now have more traffic and engaged users than many of the advertisers they promote. The balance of power is shifting with proper tactical and strategic affinity partnerships emerging – just how it should be.
And, finally, if you were to leave affiliate managers with just one advice today, what would it be?
Know your client’s business and what they’re trying to achieve. Many won’t necessarily have the full picture so work with them consultatively. Don’t sell them propositions that may be ill-fitting or unsuitable, this will only serve to undermine the goodwill you’ve built up.
Be open to the huge raft of online opportunities available to you via affiliate marketing but never lose sight of the bigger picture and how all the pieces fit together.