A big part of my job is educating search marketers on the potential to drive growth with affiliate marketing. I come up against frequent misconceptions you may carry yourself:
- Affiliate cannibalizes attribution.
- Affiliate steals clicks from brand properties and drives up CPC.
- Affiliate coupons cut into margin without adding incremental value.
If any of those sound familiar, I’m delighted for the chance to shed some light on a channel that can help you gain market share and drive incremental (and profitable) growth at a time when those are all at a premium.
Let’s tackle the above myths one at a time.
Misconception 1: Affiliate steals brand clicks and drives up CPC
This is the biggest and most immediate hurdle I tend to identify with search marketers, so it’s a good place to start. Search marketers tend to see affiliate links as enemies that drive up CPCs on competitive keywords.
The truth
There are a couple of ways to break down this misconception:
From a paid perspective, affiliate teams can and should be willing to work with their paid search partners to put measures in place to keep both parties happy.
This often starts with the affiliate team providing the paid search team with a list of terms on which they can take any of three actions:
- Approve the terms for affiliate use.
- Flag the terms where they want the affiliate team to apply bid caps that won’t drive up costs.
- Remove the terms from the affiliate list altogether.
Once the teams align on that strategy, search teams often realize they have more control than they previously thought, and it’s often easier to collaborate on the common goal: growing market share through a strategic approach to the SERP.
What we often find is that there’s a ton of unmined opportunity to work with affiliate partners bidding on terms like {brand name + promo code} that the brands themselves may not be bidding on – or are bidding on but ranking lower than a retailer or competitor (e.g., a makeup brand might be outbid by Sephora).
In this situation, affiliate links can team up with brand listings to claim extra real estate and market share. When brands prefer (which is most often the case), the affiliate team can ensure that their link, whether to an affiliate or coupon page, eventually leads back to the brand property.
This dynamic, especially when the brand has weighed in with permissions and/or bid caps, means that affiliate and search are working as a powerful tandem (and the affiliate link often garners a lower CPA than the brand link to boot).
From an organic perspective, there’s a ton of opportunity to use affiliate to get brands engagement on non-brand terms they might otherwise not be competitive on.
Affiliate teams should ask their brand colleagues for a list of non-brand search terms so they can source relevant partners to help get the brand some eyeballs.
For instance, following on the makeup example, a brand might want to get traction on the term “best lipstick.” In that case, the affiliate team would reach out to publishers ranking highly for that term like Condé Nast and Women’s Health offering them a commission to get the brand included in any relevant articles (e.g., “Best lipstick brands to give this Christmas!”), with links leading back to the brand site.
The fear that affiliate links will cannibalize brand clicks can have merit for D2C brands that haven’t expanded to retailers or marketplaces.
If your brand isn’t strictly D2C, consider the makeup brand example, and remember that consumers familiar with a brand are likely to search for things like “best {brand} deals” or “{brand} {product} discount.”
Using affiliate listings that link back to your site helps box out companies like Sephora in the SERP so you get the sale and the all-important customer information that comes with it.
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Misconception 2: Affiliate cannibalizes search attribution
Obviously, search teams have their own goals, and so do affiliate teams.
Search teams don’t want affiliate to take credit for growth they had a hand in generating, which is reasonable.
The truth
On the agency side, an affiliate team can provide clients with reporting on attribution and decide where the credit goes based on where the transaction falls in the customer journey.
Through industry-leading affiliate networks, there are technologies that allow affiliate teams to implement methodologies to properly credit preferred channels like search. This ensures affiliate is not taking credit if a consumer was influenced by search efforts.
Misconception 3: Affiliate programs cut into margin without adding incremental value
I run into this one all the time, mostly from marketers who aren’t familiar with affiliate’s full spectrum of capabilities.
Some think of affiliate as just coupon sites that slice margin away from conversions that were going to happen anyway.
The truth
Incrementality means different things to different brands – some brands think it’s just new customers – but I prefer to define it as “value you wouldn’t have otherwise realized.”
To assess incrementality, I look at the customer journey in totality:
- Where did customers first discover the brand?
- What channels/publishers did they interact with?
- Are there commonalities and consistencies throughout?
For instance, if Retail Me Not (a popular affiliate coupon partner) is the last touch 95% of the time, they’re likely not providing much incrementality.
In this example, and for any bottom-of-funnel partners that follow the same pattern, affiliate teams simply decide what to pay those partners based on the value they’ve determined in assessing the customer journey.
In other words, if there’s not much incrementality, good affiliate marketers won’t pay much for these results.
There’s also much more to the story than the bottom of the funnel (which is what many marketers think of when they hear “affiliate”).
The truth is that affiliate can be a fantastic top-of-funnel channel that brings new users into your purchase journey and shortens the time from discovery to conversion.
We’ve talked about affiliate publishers like Condé Nast and how they can help increase your influence in paid and organic search terms.
For many customers, the articles featuring your brand will be:
- A great introduction from a trusted source. (Awareness)
- A furthering of your reputation. (Consideration)
- A reminder to try a shortlisted product. (Conversion)
- Or another, validating touchpoint with a previous user. (Retention)
Yes, those articles also feature your competitors, which is another argument for you to participate.
One big caveat
If I’ve worn my affiliate hat effectively, you might be convinced to give the channel a chance.
If so, know that affiliate partners and agencies can vary widely in quality and fit – even more than in other channels, given that much of it is still manual and heavily based on relationships.
Make sure your KPIs, cost structures, attribution systems, and business goals align with your affiliate partners’ capabilities before taking the plunge.
With a little homework and the proper agreements in place, my educated guess is that you’ll find affiliate to be a valuable, low-risk growth option that gives you a leg up over more tentative competitors in a tough economic climate.
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