Affiliate marketing admittedly has a clouded past. Until recently, it has not been well understood by many marketers and some have sought to distance themselves from the low-value tactics associated with the affiliate industry in the past.
The reality is that a properly managed affiliate program can drive 10-20% of online revenue and have one of the highest ROI’s of any online channel. Today, CMOs increasingly realize that affiliate marketing is an integral part of their arsenal and increasingly investing in pay-for-performance marketing where there’s a clear connection between results and performance.
The Promise of Performance Partnerships
Marketing leaders are calling for a better connection between the amount of money they are paying and the results they are getting. Procter & Gamble’s chief marketer, Marc Pritchard hopes to decrease the amount the company spends on “wasted media” by 50% and has already reduced marketing costs by 20% as part of its epic drive for efficiency.
Performance Partnerships® is the next generation of affiliate marketing. It has a cost-per-action element and focuses building quality relationships with partners through transparent activities and communications. By leveraging a software platform that can track every partnership in real-time, manage global payouts and contracts, brands are better able to manage partnerships at scale.
Performance Partnerships® makes it possible for CMOs to make optimal use of their marketing budgets by paying partners after they have delivered results. By paying partners based on performance, brands benefit from increased customer engagement, and sales and partners are paid a commission based on the contribution they’ve made in driving those customer actions.
This is where the real opportunity for marketers lie. Instead of continuing to pump endless money into Facebook and Google, Performance Partnerships® provides a third “fat pipe” to deploy large budgets and bring programmatic elements to marketing and digital partnerships for the first time that is based on a diverse source of traffic. For example, if you have a new product launch, you can collaborate with thousands of partners at once to start promoting and adjust their commissions in real-time to reward those that are driving value.
Finding high-value customers that drive revenue is key to achieving long-term growth and marketing scale. Here are three steps you can take to make the most of Performance Partnerships:
1. Break down marketing silos
Many marketing departments operate in silos with little insight into what’s happening in the various channels. Rather than managing partner marketing, business development, influencer marketing, and referral programs separately, set up a unified framework for making decisions and measuring success. This allows you to manage your partnerships more strategically and cost-effectively by leveraging the same structure to recruit, onboard and activate partners.
A single partner program creates real opportunities for scale. Take business development deals which are known for being time-consuming and difficult to scale especially when it comes to midsize and smaller partners. Companies that are managing their business development relationships manually are limiting growth.
The Performance Partnerships framework allows teams to take on more business development and partnership opportunities. By leveraging a partner platform that allows them to automate contracting, data capture, tracking and streamlining communications, they have more time to develop brand-aligned relationships.
2. Track everything via a real-time tracking and payment platform
A Software as a Service (SaaS) Platform or Affiliate Network is critical for managing an effective partner program. It keeps track of operating agreements, real-time reporting, payments, tax reporting and other aspects of your partnerships. By managing your partner relationships on an integrated tracking platform, you’ll have access to better data and analytics and see fewer instances of fraud. Often brands will hire an agency to manage their program as an extension of their marketing team. They have the skills to leverage the software and the relationships to make the most of your partner program.
3. Develop trusted relationships with partners
If you aren’t invested in your partner relationships, your performance will stagnate. You’ll limit your results by failing to regularly engage with your partners, review data and performance, and consider ways they can help grow your business.
Marketing leaders have a big upside when it comes to Performance Partnerships®. It is important to have ongoing communications with your partners, understand the value of the leads and sales they are generating, and adequately reward them for delivering results. Building strong partner relationships that are well managed and based on transparency, will pay off in the long run.
As the digital marketing landscape continues to evolve with new frameworks, technologies, and channels, affiliate marketing is one of the strongest avenues for driving profitable customer acquisition. When done right, marketing leaders have more transparent relationships with partners and have direct insights into partner activities and pay them only after they achieve a specific outcome. Partners who deliver value are rewarded accordingly.
Affiliate marketing is redefining the digital future with partners, and continually coming up with new ways to drive traffic and new customers to grow your brand to the next level.