Truth | Insights

FiveReasonstoConsiderAffiliateMarketingforyourBusiness

photo of Christina Downes Christina Downes | Affiliate Manager 11 September, 2020

Here’s our view of the top five areas you should take into account when assessing whether or not to launch an affiliate program.

1. You have an e-commerce site and want to drive online sales

If you want to increase your online sales, the chances are that affiliate marketing can help you do just that. By launching an affiliate program, you will have access to a network of publishers willing to promote your products and services and refer customers to your website in return for commission if a sale is made. An added benefit is that you only pay for valid sales, excluding cancelled orders or returns, making the channel relatively risk-free.

2. You want to reach new customers

Advertising with affiliate partners is a great way of getting your brand in front of customers who may not have previously considered making a purchase with you. Many affiliate partners are now super brands in their own right, and have millions of users that they can market your products and services to. Being able to offer a competitive cashback rate on TopCashback or Quidco, for example, can be enough of an incentive for a customer to purchase from you rather than a competitor brand with a similar offering. If you are a small business that doesn’t currently receive much online traffic, investing in the affiliate channel could be a great way to improve this.

3. You are able to offer commission in return for a sale

Arguably the key feature of affiliate marketing is the cost per acquisition (CPA) payment model; you pay for performance. For most e-commerce brands, this means paying a percentage commission to the publisher when they have generated an online sale. How much commission to award publishers will vary depending on things like: average order value, profit margin, and what competitor brands are offering. To give an example, a clothing retailer could offer publishers 6% commission of the total basket value for sales that they have driven. Commission is awarded on a ‘last click wins’ basis, typically within a 30-day cookie window. So, if multiple publishers are involved in the customer journey that ultimately leads to a sale, the commission is awarded to the publisher who drove the customer to site based on the last click. Because of the remuneration model, the affiliate channel is often seen as a cost of sale by businesses, and may sit outside of the marketing budget.

4. You want to be able to measure your return on investment

One of the key benefits of affiliate marketing is how measurable it is. Performance metrics are all tracked via an affiliate network or SaaS platform, and your Affiliate Manager will have access to (often real-time) reporting showing how your affiliate program is performing in terms of clicks, sales, revenue as well as commission awarded to publishers for generating those sales. The pay-for-performance model means that it’s possible to achieve a consistent ROI via affiliates, making it a very appealing channel for clients where budgets are potentially limited.

5. You have some budget that you can invest in on-site placements and emails

While the primary payment model for affiliates is CPA (usually paying % commission of the basket value), increased exposure can be negotiated with publishers to secure more prominent placements on-site or in regular newsletters to their member base. For example, you may be able to book homepage inventory to support the launch of a new product or you may wish to offer an exclusive discount for a publisher’s audience in exchange for an insertion in their weekly newsletter. The price of these placements vary depending on the publisher involved, time of year, commission offered and various other factors, but your Affiliate Manager will be able to advise and negotiate with publishers on your behalf. So, while having additional test budget for affiliate tenancies is not essential, it can really help to boost your prominence on publisher sites when needed.

If having reviewed these five points you’re finding that most of them resonate with the marketing objectives for your brand, launching an affiliate program is definitely something that you should look at adding to your marketing strategy. Don’t hesitate to get in touch with us for a no obligation discussion about the potential of affiliate marketing for your brand, and how we can help you launch and grow a program and unlock incremental revenue as a result.