If you simply won't find this information anywhere else, so why not deep dive into the world of affiliate marketing and program management to discover new digital strategies that think of brands and agency use to grow their network and detail exactly to get more traffic and increase sales. Now here's your host, award-winning affiliate programmarketer for leader and the drum digital top 50 UK Agency Owner, Affiliate Manager Motivator.
SPEAKER_06Welcome back to the Affiliate Marketing Podcast. And as promised, I'm sharing this week's Christmas Hits episode, which is taken as a summary from our Elevate Summit, which took place earlier this year. On this particular panel, we explored how performance marketing is being adopted in brand management structures, along with Hetlin Southgate from Acceleration Partners, Stephanie Harris from Partner Centric, Seb Barden from Unilever, and Matt Frari from the Partner Agency. In particular, we were dissecting with you the panel where we discussed how CMOs still don't truly understand performance marketing and how it can really impact their businesses to drive incremental sales on the bottom line. We started off this discussion with our panel of experts talking about the hotly contested stat that has been bandied around the internet for almost the past year. In this segment below, where we're discussing the term affiliate and how it is now being used so broadly that it's difficult for CMOs and other players to have a cohesive definition that can be agreed on. The stat in particular says 79% of CMOs still don't understand performance marketing. And I asked the panelists whether they thought this was true or false. Apparently, 79% of CMOs still don't understand performance marketing. Do you think that's true or false? And if so, why exactly do you think that is? And I'm going to maybe start with Helen.
SPEAKER_07Yeah, so I'm gonna be nice to CMOs. Um I think it's not necessarily that they don't understand it. I actually think it's that the channel is misunderstood by CMOs. And I actually think that's probably our fault as an industry, really. I I don't think we've ever been very good at going out to that level, so the C-suite level, and saying, you know, this channel delivers incremental growth, ROI, it's creative, you can work with a diverse range of partners, uh, it helps you through the good times and the bad times. And I think if you actually said any of those things to a CMO, they would bite your hand off to work in this channel. But I just don't think we've positioned it very well. Um, and and that's why I think it's probably been more misunderstood because we haven't been able to do that. Um, and I think the other challenge is, you know, I think there's some preconceptions around partnership marketing and the affiliate channel that, you know, it is a certain type of partner, it's very reward-led. I, you know, that is such old school thought now, and it just isn't where it is today. But I do think we probably need to do a better job of telling CMOs what it's all about and getting them excited about it, which I don't think we've done a good job of.
SPEAKER_06Yeah, so there's like kind of PR and education component where we all just kind of sit doing what we're doing all day and growing the channel exponentially, but there's no sort of outbound communication that's happening about why the channel's working. Um, Stephanie, what what are your thoughts?
SPEAKER_00Yeah, it's funny. Um, I was speaking with a CMO last week who mentioned to me that she understood affiliate as a tactic, but not as a strategy. And I think that applies to a lot of people in that position where they understand what the model is, but they don't truly understand how to utilize it as part of their larger strategic marketing mix and the both the benefits and the you know challenges of affiliate in that mix and how to best you know navigate those. So I think that um often we speak with um people in that role, in that decision-making role, who uh see the channel as one in which you're you know, if you're a funded startup or you're an SMB, you think it's like an easy way to get performance and you're only paying on performance, you don't understand the upfront investments. And if you're um more mature, uh larger enterprise business, you understand it at a high level and you have the the time, resources, and patience for the channel, but you don't truly understand the challenges of like the attribution strategies and the types of partners that you're working with and how to best incentivize them.
SPEAKER_05So, but do you agree with what's been mentioned here by the ladies today as a big brand?
SPEAKER_02Yeah, I think that there are a lot of uh uh correct points um that we can hear, uh what we've heard so far. So I think uh for for me again, based on the freelance brands that I've done before, uh where I've worked before, and um I can um I can see at least at least two two big points around it. So the first one is um of course education. So from a similar perspective, you know, at what level of edu uh you know of what level of details do I need to understand about uh affiliative marketing because you know, as as um clearly said earlier, it's you know it's more it's seen as a tactic rather as an overall strategy. Um but what I've also seen so far is um the the silos or the silos within an organization. So uh CMO will probably you know in most of the cases that I've seen um will be probably more around you know top of the funnel, while everything that comes to more bottom of the funnel will be sitting with a commercial team. While in other organizations, it's also about the finance. Is the um let's say the budget for affiliate coming from your uh your marketing budget, or is it coming from your retail budget as well? So there's you know it's also a reflection of the way organizations are operating, so whether they're working with silos, split between uh retail, commercial, and uh, and marketing. And for me, I think you know what I've I can compare it to a little bit to to SEO. So you know, marketing doesn't really sometimes take the the you know the responsibility of doing SEO sometimes is sitting with the ITP because you have a technical SEO as well. So this is uh you know, I put affiliate and an SEO in this kind of gray area that goes across several disciplines within an organization.
SPEAKER_06And that can be tricky to navigate as well, um, especially from an account manager's perspective. It's like you know, which part of the budget do I use, whose budget is, and how does it get segmented? Matt, what about you? Because you've built some seriously big brands in your 20-year tenure.
SPEAKER_01Absolutely. So we're talking about this all wrong. Affiliate is not a channel, affiliate is um a way of looking at partnering with other channels. And here's what I mean by that. For the last 20-something years, we've been saying affiliate channel, affiliate channel. What does that even mean? An affiliate, we don't even define that um what an affiliate is. I mean, affiliate could be search, it could be mobile, it could be a huge rebate company, it could be content, it could be influencers, it could be et cetera. So when you're talking to a CMO, what are you actually telling them an affiliate channel is? Why aren't we working across an entire organization? We should be working with the influencer channel to partner with NT. We should be working with the search team internally to partner with search affiliates. We should be working with um the mobile channel to partner with mobile. So, first off, we have a self-identity crisis. We're talking about this completely wrong. So when you approach a CMO, um, you have to approach them from a holistic 360 view, and you have to say, look, we as affiliate marketers have to be um disciplined across all tactics. We have to know it's the hardest job on the planet to be able to be up on every single tactic in every single channel. But when we first realize that we encompass all channels, it's just a way to pay for traffic that shifts the risk from the brand to the partner and makes you both invested into that channel together. But the minute that a um lazy marketer comes into the channel and says, Hey, just turn on my affiliate channel, uh flip on um the tracking, and uh let me know when you start to get us customers. That's when um everything goes south. And it almost always happens right from the front. The CMO isn't invested um with their head in the game on all the different tactics across all the different channels. They won't let you have access to their PPC team, they won't let you have access to their influencer team.
SPEAKER_06Even analytics sometimes in some instances where it's like, well, I mean, how do we know where your customer is going before they get there? How do we mix that back to the segmentation of your program? So I absolutely agree with you.
SPEAKER_01How are you crediting um the affiliate? Oh, we're giving you last credit at the very end if you get past our PPC, if you get past our SEO, if you get past our content. And by the way, we don't want you to have any credit for affecting any of those other channels. So the minute that we can sort of um look ourselves in the mirror and say, hey, we're not a channel, we are a um very tactical way to partner with all channels.
SPEAKER_06In this next snippet, we talk about the need for affiliate managers to really think about how they communicate inwards and the fact that they don't need to always report up, but also to learn how to engage sideways with other members of the digital marketing and acquisition teams. Listening closely as you hear what our experts think. There's a requirement for affiliate managers now to also educate sideways, like to educate their counterpart sideways because there isn't cannibalistic, you're all on the same side and you all need to be driving sales. I don't know how you guys are experiencing that. I mean, Helen, you you know, you work at one of the biggest agencies in the world. What do you ever have to kind of really ingratiate yourself not only with the affiliate team and a brand, but all the other teams as well to make it work?
SPEAKER_07Yeah, 100%. And and we always say the best practice now, and best practice isn't what all brands do, but best practice is the you know, the partnership channel, affiliate channel, whatever you like to call it, is at the table with all the other channels having that conversation. So I think Zeb said, like most companies start with a campaign they want to run and it filters down into all of the channels. And what has happened previously, um, I think with our channel is that we haven't been involved in those conversations, but we really have to, um, and particularly now because there is so much overlap, um, as we were saying, between partners that are working within the partnership channel, but they might also be working with the PR team or the social team, or they might be doing retargeting or search, like to have that holistic view is really important. And actually, the people that are best placed to do that are in the affiliate channel and it's the affiliate managers. So we we always would encourage um our teams and for our clients to make sure that our teams can be in those conversations because I think it makes a huge difference, and it means we're not the you know, the final thought, the last thought that everyone forgets about at the end. It means it's a proper integrated campaign, and that is you know how the best marketing runs.
SPEAKER_01Yeah, absolutely. You know, Tony, I'm sure if I was looking out at the audience, I would say, Hey, raise your hand if this sounds like you, if you identify with this, but you can virtually raise your hand if this sounds like you. You are um you you've just won an account or you're just starting to work with a CMO. And um, the first thing they tell you is, hey, we're gonna put you out on this desert island. Um, we're gonna basically not give you uh any brand resources. Oh, we don't have any designers, they're very busy doing the rest of our marketing. So no new material. Oh, by the way, um, you can't even mention the word coupon promo. Don't look at what we're doing in Facebook. We're using uh coupons over there. Don't look in search, we're using coupons over there, don't look in email, we're using coupons over there. But you in the affiliate channel, um, you can't use coupons. Don't even say the word coupons. And then they're um offering coupons on their website, but telling you that you can't even um go into a promo channel. So you're sitting over here on this island, you're cut off from finance, you're cut off from design, you're cut off from um being able to use any promotions, and you're the last afterthought. So, what we have to do is flip everything on its head, and when you start the conversation to everybody else's point, you have to sit down and see if finance understands that by the way, why would you uh budget for this if it's incrementality and it's every sale contributes to the gross margin, why would I ever cap that? The whole point of performance marketing is that if I'm getting a positive ROI and a positive LTV, um, it's it's a bit hard to forecast, but that doesn't mean we shouldn't try. But you definitely shouldn't budget. Forecasting and budgeting are two totally different things. So my point is when you come into the organization or if you're in the organization, the first thing is to look around at a table and see who even joined you at the table. Is finance at the table? Is design at the table? Is all the other departments at the table? If they are, see how they all support. If they all support um the partner model across all channels, then we may have a win here to be able to proceed forward. But it has been 20-something years of um trying to convince from top down that um you need to come in with a sort of a kumbaya model, and we all are um kind of link arms. And I'm not going to point fingers at myself and say, hey, I drove all that traffic. I'm search, I'm search, I'm the best. I drove all that traffic, and I want to take credit, credit, credit, credit, credit. We're all going to sit down and say, How can we all take credit? How can we all um contribute? Yeah, contribute, and so on. So I know that's sort of like I said, a very um kumbaya thing to say, but everybody literally has to be bought bought in in an organization and understand this, and you have to do the heavy lifting up front to see if everybody's bought into this, yeah. You can't be successful.
SPEAKER_07Just on that point of um budgeting, because I saw a question coming in about finance teams, and I think you were speaking about it on another panel, Leanne, as well. And I I always find this conversation fascinating because I have never worked at a company where you cannot have a budget, like everybody has a budget, it is just the way companies work because at the beginning of the year, you need to set aside a certain amount of money and split it. But where I think people get sort of confused from that, and I think that's what Matt's saying, is it shouldn't be a restrictive budget. You could start the year and say, right, we've got five million to spend in affiliate marketing. But what you need to do is explain to your CFO that you know what, we might be able to spend six million on affiliate marketing and we will get X more sales, and it's better to put that extra million in affiliate because we know exactly what the return on investment will be. We can forecast it, we can plan it. And I think that's where people get confused. It's like, yes, set a budget, but work with the finance team to help them understand that that budget should be flexible and you know, build a case to pull budget from somewhere else.
SPEAKER_06Next up, we talked about what companies and brands should be doing before they jump right into opening an affiliate program for their business. As with anything, preparation is key to success. So getting prepared to sell the affiliate proposition up into the C-level stakeholders of your business is an important part of the prep and planning that you need to do. Our experts came on board to give you some detailed advice on how to attack this. What advice can you give to someone who needs to convince their organization that affiliate marketing can be a key revenue driver over time? So somebody who hasn't even got a program yet, um, but somebody who's wanting to actually get into that channel, is there a right time, a right place? How do you explain that to the CMO and say we really should be investing in this channel? What are some of the common conversations that you have around that?
SPEAKER_02I think oh something uh what I've seen also, it's also the the lingu well linguistic the language that we're using at the moment. And again, is even in the language we are making the separation between oh, this is affiliate, this is influencers, uh, this is you know partnership with uh media, for instance. So I think it's more you know, how can we uh as part of the communication with senior stakeholders, you know, like CMOs, um you know, how can we break those barriers and have you know link it to the overall objectives at the end of the day? So I think there were also a question about influences uh on the chat as well. So again, at the end of the day, you know, um, you know, it's about the integration between uh all of these different channels and then make sure that okay, this is uh the you know the role and responsibility of uh affiliate marketing manager and the team.
SPEAKER_00I also think oh go ahead.
SPEAKER_01No, I'm sorry, you go ahead.
SPEAKER_00Oh, I was just gonna say that I think that question um is really also about that sort of um what I call like the speed to value. I think um companies can commit to the channel if they have uh a realistic expectation of um what value will go to their revenue by what time, you know, how long will it take? And we build out these models. And I think even if you're an in-house manager like I was a hundred years ago, um you can sort of say, okay, you know, affiliate's not a one-trick pony. So there's, you know, content, there's loyalty, there's coupon, there's review sites, there's you know, various kinds of content sites. You know, you kind of break out the categories and you weight them, you know, based on how you think those different categories will contribute to the revenue you're gonna drive. And over a period of 12 months, 24 months, 36 months, whatever that looks like, so that you can plot out, you know, what will the return look like over the first year, two years, three years, and even broken out by month so that if you've done that thoughtful planning and you've made some assumptions about what your strategy will be, not just the tactic, but like how you're going about going about growing each of those categories and look at your conversion rate, your average order size, build that into your calculations, you know, you can start to plot out for those decision makers if this is our you know, lifetime value of our customer, this is what I think it'll cost us to get each of those customers in over these different months. And, you know, this is the strategy I'm gonna go about to do it. And this is the return we're gonna see after each of these periods. And if that's an acceptable return, then I think everyone feels good about moving forward as long as there's like the right expectation. We when we do these models, we turn away a lot of business when we don't think we're gonna see a return that would make either party happy after 12 months. Uh and there's there's some businesses that based on their traffic or their conversion numbers or you know what have you, that they just have more work to do on their current business before the channel deliver the kind of return they're gonna need for the investment in the first year.
SPEAKER_06So we've covered how much to plan, communicate, and manage your internal stakeholders, but how will this industry change in the decade up ahead? This excerpt is probably the most important part to listen to from the summit as we're facing some of these challenges right now. Most of what was delivered here still rings true and will need to be addressed in the year ahead. So tune in and listen to what our experts have said. Do we, as experts in the industry, see the affiliate channel? Or okay, it's not a channel because Max have already made that very clear. So let me change my community, my terminology.
SPEAKER_01I was gonna start correcting, but every time we're channeling like we have to put a dollar in the job or something.
SPEAKER_06My my one pound. Do you see the affiliate industry continuing to grow as it has over the past decade? My hands are. Up and I say yes. Like, I don't think it's got any signs of slowing, and it never has in the last 20 years. And all of you seem to be shaking your head too. So, is that the general consensus? We all believe that this is going to continue to grow.
SPEAKER_01I think that's hard to measure. But if it's not a channel, how do we measure that? Right. So the question is: are more dollars going to be spent in performance partnerships? Meaning, are we going to use the model of pay for performance? Paying on a download, paying on an install, paying on a um, you know, a CPA, paying on a sale, whatever. Whatever that word performance actually means, are there going to be more dollars investing in that model of paying for traffic? I say absolutely. Why wouldn't there? Like that's the best model. There's no better model. You're getting performance. So why wouldn't there be more dollars moving to it? The threat is that if we keep calling it a channel and we don't self-regulate um each one of the areas, it's not one particular channel email, mobile, content, influencers, um, that is that are poisoning, it's all of them and how we as managers manage the brand within all those various channels using the pay for performance model, um, that's what's going to be the threat, is if we don't follow brand guidelines across influencers, if we don't follow brand guidelines in email, if we don't um adhere to uh certain guidelines in incentive or coupon or any of that kind of stuff. So as long as we can start to um manage everything smart and tied to metrics, there will be more dollars spent across this performance um model.
SPEAKER_07Program yeah, or whatever we end up calling it. Yeah, I agree. I think I think the industry in terms of outcomes-based marketing, which is the best way I can sort of describe it, it is going to grow significantly. And as sort of affiliate marketing people or partnership marketing, whatever you want to call it, we are in such a good place because outcomes-based marketing is in our DNA. Like it is all we know how to do. Everything we do is around performance, whether we're agencies, networks, partners, brands, whatever. And it puts us as an industry, I think, in a very strong position to take advantage of the growth that we are going to see in outcomes. And I think we will see more partners working on outcomes. I think we will see partners getting bigger and bigger, as we're already seeing, particularly around content and influences and social. I think we will see more interesting ways of using outcomes-based marketing. Uh, a very good example of that was the Super Bowl with Coinbase's great QR code. Like we are just gonna see more and more of that. And that is the stuff that we know inside out, and it I think it puts us in a really great position. And I think I can only see it growing and developing in a in a really good way.
SPEAKER_00Yeah, and I think the um like the leading indicators are there too. Like if you think about, you know, five, seven, 10 years ago, reputation for affiliate being about, you know, truly like promotion discount code, the early big affiliates were the coupon sites of the world, because in order for brands to get customers comfortable with buying online, they were off like in the early days of buying online, you were offering coupon codes to make it cheaper for customers to shop online than to be in store. That's how you were trying to get over that hurdle. So those original affiliates, and that's how the industry sort of grew up was you know, the flamingo worlds of the world and like all the other like mom and pop coupon sites. And if you look at now, even post-COVID, you know, you have all of these PR agencies trying to understand and get into affiliate because they're trying to pitch this D2C, you know, couch company and they see that all the natural search results are best, you know, modular furniture shipped to your house or whatever it looks like. And, you know, those digital press businesses now will only uh accept, you know, uh companies they mention in their articles if there's an affiliate link. And for a while the PR companies are like, what is that? Now they've started looking at our industry in terms of like broadening the industry and it growing. You know, that's not a conversation that was happening three years ago, four years ago. It's happening now, and it's exciting because you know, that's that's how we expand categories and opportunities for the brands that we work with, where suddenly, you know, those are opportunities that happen in the affiliate silo of like we can get you placement on good housekeeping and Forbes and all these other things because they embrace the model.
SPEAKER_06They do now, yeah. But it's taken, you know, five, six years for them to get there. But I mean, Steph, from your perspective as a huge, you know, international organization, do you do you see your company spending more in a performance and outcomes-based channel from a digital perspective?
SPEAKER_02I think uh again, is a company in a similar situation uh can see also the growth of you know the see the opportunities with e-commerce. So again, is you've been rearing quite a lot with the brick and mortars, and then now with all these, let's say uh easier barrier to entry uh in let's say on the DTC world. So, yes, there is definitely uh you know uh much more opportunities to drive your retail destiny, even you know, we are not looking at a big percentage of the sales at the end of the day. Um, but what I was also thinking about one of the other opportunities, especially right now, is you know, with the current economic situation, we you know we've been talking about couponing and deals and vouchers. So this is something also to bear in mind that there will be more and more people that will be looking for, okay, where is you know the best place, uh the best deal on you know on my laundry detergent, for instance. So definitely uh the you know the old couponing uh style is still you know, it's still have you know big lifespan ahead, uh, you know, based on whatever happens in the economic situation. But I guess you know, for me, one of the big threats is more you know about the cookie-less world in terms of tracking uh those um you know our returns. So you know what will be the level of visibility that we'll be getting, especially on site where you don't have opportunity to get, let's say, more uh PII type of data to measure the end-to-end uh journey as opposed to to cookies. So that's a little bit you know my concern at the moment around around it.
SPEAKER_06And finally, we round up this panel by asking each of our experts to give us just one piece of advice that they can take forward to help elevate performance and build momentum behind affiliate programs. And they didn't disappoint. Still some of the best advice that I've heard all here, and hopefully now you'll have heard it too. As we move forward towards 2023, take some of the best bits from 2022 and our Elevate Summit along with you and use these key pieces of advice to grow your affiliate programs too. What's the one key nugget that you want to give away to a head of affiliates, a CMO, an account manager, a digital marketer in companies to actually get behind the performance marketing program, let's call it a program for now, um, and and really elevate their performance in it. If if each of you can just go through and give your one key piece of advice before we shut down.
SPEAKER_00But there is thoughtful analysis that can be done to ensure that you and the decision makers in your company feel comfortable and confident that the investment is going to generate the return that you need, or that you understand what you as a business need to uh work on first before you can see that return when you enter the affiliate space.
SPEAKER_04Okay, thank you. Helen from you, what's the one big key nuggets?
SPEAKER_07Uh I would say I'll keep quite simple. I think with the partnership channel, you get out what you put in. The more sort of time, investment, expertise, uh, effort, everything you put in, you you will get out. That's how how it works. I think you know, if you leave an affiliate program to run, it doesn't run very well, it stagnates. Um, so you have to keep working at it. And then just very quickly, because I think it's a plug considering there's a few agencies on this, like getting outside advice, expert advice, massively beneficial to everyone, I think. Yeah, like asking other clients in your space how they're doing, asking partners, talking to agencies, yeah, doing doing that, I think is really important.
SPEAKER_04Absolutely agreed. Matt, from you.
SPEAKER_01I think we need to realize that although we want this to be zeros and ones and very data-based and very binary, we need to realize really what we're in here is the relationship and people business. And we need to um, you know, that's part of reaching out, that's part of partnering, that's part of um using the resources around us, being willing to try things with other people, um, not folding our arms and saying that will never work. Um, every time someone said, This is the way we've always done it, or that will never work, that has um never gone very well in any relationship, any channel, any marketing or anything like that. So we have to get out of our own ways. We have to um remember this is a human relationship-based business, and we need to um lift our head up and see what's working for other people. And we need to be creative and willing to work with other people until we find um what actually works. So I think it's a lot of testing, a lot of being creative, and a lot of working um with people, and that's really what this business is a people business.
SPEAKER_06That's internal and external as well, because you know, people have brought up what about concerns about cannibalization. Seb, your last piece of nugget of advice for us from your perspective.
SPEAKER_02I think uh from my side, it's mainly let's uh let's plan uh an end-to-end uh you know, whatever campaign and end-to-end activity together, uh, you know, from a brand, from a performance uh perspective. Yes, of course, we want to understand you know uh our brand metrics, but also when it comes more to performance, you know, where is uh the outcome coming from as part of this of this journey? And then the last bit, again, as part of this, you know, sometimes we're also working in a traditional way. So it's up to the performance lead, to the affiliate lead, to you know, to push the traditional agency to to to also uh to challenge the statue quo in terms of performance and moving outside the just the like of Facebook and and search, for instance.
SPEAKER_06And that's a wrap for this Christmas hits episode of the affiliate marketing podcast. It's been an amazing year, and I'm thrilled to have had you all here to share these insights, tips, and program strategies with us. Thanks for tuning in and tuning me up to listen to what I'm learning and sharing each week as I delve a little bit deeper into affiliate and partnership marketing. Thank you too to all our amazing podcast guests, the speakers that have joined us, the sponsors that have helped us, and the advertisers and community members who are listening in every single week as we go along this affiliate marketing highway and continue to learn what is new and changing in the performance marketing industry. It's our pleasure to host you here each week as you're joining us from around the world. And if you haven't yet, please do register and join me at our Amplify Summit, which is taking place on the 17th and 18th of January next year. It's going to be an amazing event covered with an enormous amount of insight and direction to help you kickstart this next year and plan ahead for driving incremental growth in your affiliate and partnership programs. We've got a whole host of experts collaborating from around the world to help you get the insider scoop on how you can grow your performance and amplify your partnerships for the year ahead. Thanks too to our sponsors and event partners, impact.com, cj.com, thepma.org, cellexperts, switcher studio, tvscientificpartners.io, and all the other event collaborators who have come together to join us to make this annual event possible again. Without you and without your support, we couldn't make these events possible. We wish you all a very merry festive season and I am looking forward to seeing you all again in 2023.
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