4 Keys To Success In Affiliate Marketing

4 Keys To Success In Affiliate Marketing

Article Source:

www.forbes.com

Greg serves as Chief Marketing Officer at Slickdeals, the leading crowd-sourced shopping platform and a Top 100 site/app in the US.

Savvy marketers and business development professionals are always on the lookout for digital partnerships that will garner additional attention, sales and growth for their brands.

Affiliate marketing—where brands pay partners to promote content on a performance basis, as a cost per action (a lead, registration or purchase) or the percentage of a sale (such as a commission rate on any sale driven by partner)—is one of the most productive tactics within this digital partnership economy. But it’s also one of the most overlooked and misunderstood.

Let’s look at the main advantages of affiliate marketing and explore how, when executed expertly, it can provide your company with opportunities for growth, ROI, incrementality and elasticity.

What Makes A Successful Affiliate Marketing Partnership?

Affiliate partnerships deliver a return of up to 12 times the advertising investment, according to a 2019 study from PwC and the Performance Marketing Association. Business spending on affiliate marketing has been projected to grow to $6.8 billion in 2020 and $8.2 billion by 2022.

Over the course of my career, I have seen the benefits of affiliate partnerships from both sides of the table. At three tech startups I worked at, affiliate partnerships fueled significant growth and built strong relationships with brands that resulted in eventual acquisitions. Now at Slickdeals, I’m on the affiliate side, helping brands get the most out of their performance marketing dollars.Four Keys To Success In Affiliate Marketing

Of course not all affiliate partnerships are created equal. If you’re vetting different affiliates to find the right fit for your company, see how they score on the following four characteristics:

• Scale

Ability to scale is the single most important attribute in an affiliate. If you want to move the needle on your growth goals, you need to partner with an affiliate that can get your brand and products in front of a large and engaged audience. A campaign that only results in a handful of new customers won’t contribute to your long-term goals and ultimately won’t be worth your time.

Does the site specialize in certain industries or markets? How many daily, monthly and yearly visits do they get? What kind of affiliate opportunities do they offer—is it only direct response and CPA, or do they also have native media and standard display ads on their platform?

• Return On Investment

Since affiliate marketing is a performance-based model, you only pay when you get the result you want. For example, if you are promoting a $200 product and agree to a 10% commission on a sale ($20), you get a 10x return on ad spend (ROAS)—with zero risk.

Paid search marketing and social media marketing have become more popular, and therefore competitive, so a good affiliate offers a cost-efficient alternative in a less saturated market. What would your projected ROI be for every dollar spent on Facebook or Google ads? How would your ROAS compare to that of an affiliate campaign?

• Incrementality

Incrementality is a method of measuring a desired outcome—such as a new customer acquisition or conversion—that wouldn’t have occurred without a specific interaction. Not all affiliates can drive incremental value at scale.

Pay attention to who owns the customer relationship; is it the affiliate, or do they act as a middle man, simply passing traffic from search engines to their partners? Where are your competitors getting their referral traffic from? Use free tools like SimilarWeb to analyze their website data, including web traffic volume, referral sources and organic and paid search keywords. What percentage of their traffic is direct? What’s the average time on site? You ideally want to see a direct traffic percentage above 50% and time on site longer than three minutes. This data suggests that the site has a high-quality, engaged audience.

• Elasticity

In simple terms, elasticity in an affiliate marketing campaign means that when you pay more, you get more. If you know you want to spend more in marketing during certain times of the year, such as for back-to-school or holiday sales, a good affiliate will be able to drive more volume to your company as a result. This elasticity gives your brand room to scale your spend up and down, depending on your needs and goals. You are only limited by how much you decide to invest.

Affiliate marketing is not new, but many marketers and business development pros still aren’t using it to its full potential. Look for an affiliate partnership that checks all four items on this list, and discover new opportunities to grow your customer base and profits.

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The EXACT process used by 6 & 7 figure affiliates