Hi, and welcome to the Affiliate Insider Podcast with me, Leanne Johnson. This is a podcast of digital and affiliate marketers. Listen up as I explore the latest digital and affiliate marketing trends and give you the insider's view on what's occurring in affiliate marketing. Join us as we explore affiliate strategies, host expert interviews with leading affiliates and tech entrepreneurs, and discuss the latest affiliate and digital marketing trends. If you want to stay at the cutting edge of affiliate marketing, you're in the right place. Join me for this week's episode and let's get started.
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SPEAKER_02Welcome to Affiliate Insider's Affiliate Marketing Podcast with me, Deanne Johnson. And today I'm really excited to be joined by Stephanie Harris from Partner Centric. Hi Stephanie, how are you doing? Hey Leanne, thanks for having me. Thanks so much for being on this podcast. So before we get started, I want you to just introduce yourself and tell our guests a little bit about your business and your history in affiliate marketing. And then we're going to talk about amplification, which is going to be quite interesting.
SPEAKER_00Okay, well, my name is Stephanie Harris. I am owner and CEO at Partner Centric. We're a full service affiliate marketing agency. There's not that many of us in the space, but brands hire us to manage their affiliate marketing efforts. And we work with close to a hundred brands of different sizes across many different verticals. I want to say close to 100 different verticals for every brand that we have, different unique business. And we just do affiliate. We're really specialized. We do this all day, every day. And that's why brands hire us.
SPEAKER_02And that's exactly why you're on this podcast. So thanks very much for being here today. So I wanted to start off with the technology side of affiliate marketing and the value that the affiliate, and we've had this discussion at our Amplify Summit a couple of weeks ago about whether it's a channel or a metric or a payment solution. You know, how are we doing this affiliate space right now? And most of our audiences agreed at this event. So how do you see the state of play in affiliate marketing right now as we are heading into 2022?
SPEAKER_00Yeah, I mean, I think it's a I think it's a great question. It's often considered that third channel after paid search and other paid media brands go to affiliate next. I think that in our space, I agree with your audience at your conference that it's more of a model that crosses many different channel sections. I think that any partner you can work with that you can back out to your performance basis is affiliate marketing in this day and age. There's a blurred line at this point between influencer, PR, content sites, the traditional coupon and loyalty of what affiliate sort of started its, you know, genesis as. And so I think that when you're running an affiliate marketing effort, you might be viewing it as a channel amongst these other channel pillars, but it can often cross many different departments in an organization. So we'll often work with the PR team, the influencer team, the large celebrity endorsement team, the content team, the digital press team, depending on the size of the business and what their structure is like as part of the performance effort.
SPEAKER_02Yeah, I love the way that you've described that because I think a lot of people still think about affiliate marketing as a discipline. It's just one discipline, but it's not. And you've just explained it very clearly there. And the fact that an affiliate account manager actually has to understand how PR works, how you know social media works, how influencers want to be related to and managed. So it's becoming a very, very complex industry. And I suppose for me, where I want to start this conversation, it's all of these brands that you work with across multiple different verticals. It gives you a bird's eye view of what's happening across the industry, which is why I wanted to do on this podcast. For me, I want to start with the smaller brands because everybody is now talking about affiliate marketing. It's always become like the next cool thing, right? And for people like me and you who've been in this industry for you know decades, what is the advice that we need to be giving to these newer brands that are coming into this performance space and wanting to kind of leverage that growth? Like what are the key things that these smaller brands need to be thinking about? Because I'm pretty sure you could spend this whole podcast talking about like the mistakes that happen with brands, whether they're big or small, have big or small budgets. But let's start at the beginning of this podcast talking about the smaller brands who are looking to get in.
SPEAKER_00Great question. And I love that you said it's like the cool thing to do now because that's so exciting for someone who's been in this space for, I don't know, almost 20 years at this point, which is crazy. That's about how long the space has been in existence. And it was often like the forgotten stepchild sort of channel, and to see it getting the kind of budgets that traditionally were reserved for the search and other sorts of, you know, campaigns in the brands has been really exciting. I think that in some way that has to do with a post-COVID world and the shakeup that has happened from COVID from the privacy concerns that have turned Facebook into a less reliable advertising vehicle for a lot of D2C brands who are often smaller but get so much of their exposure from a Facebook type of advertising platforms. We've seen a lot of that come in. So I'd say for the smaller brands, and it has been really exciting seeing more new entrants into the space than ever before, wanting to test the channel, wanting to see if it's a channel that works for them. There are a few key things that any small brand needs in order to get started in this space, which might seem pretty basic, but bears repeating because often we'll have people reach out to us and we'll say, you're not there yet. You don't have a proper checkout card on your site yet, or you really have no brand recognition, and this is a hard channel to get that kind of exposure in. You know, you need to do some other marketing avenues first to build some recognition. You need to have inventory. Often we'll have brands come to us, they're pre-inventory, they're looking to do a go-to-market, but it's very difficult to manage a program on a wait list, wish list venture over a TBD period of time. That's something that's very difficult. So there's some basics that a business needs fundamentally in order to come into it. And then some expectation setting in terms of the kind of budget to set aside. I think a lot of people, a lot of brands think when they hear performance channel, that means they pay nothing. So many of the content placements or the integrations that a brand knows exists and affiliate they want to be part of require some sort of upfront placement fee or a high percentage of commission. Professional management costs its own money. So, in order for a brand to start in this space, the barriers to entry are low to start. But to actually run a program in the space, there needs to be a budget set aside for realistically what you're paying in tracking fees, what you're paying publishers. If you need to set aside any like paid placements or integration fees, a lot of the websites, the publishers who have high visitor volume that will get you sort of the quick traffic for your affiliate program are going to require upfront integration fees, which are not nominal. They're not, you know, $500. They could be $5,000, $10,000. Small brands, especially need to understand this. So there is an investment, and it's not a set it and forget it type channel. We also get a lot of small brands who say, just set me up and then let me lose. Because they think if they're live in a network, publishers will come to them. There's a whole graveyard of undermanaged programs that exist across the different networks because of brands who think, let me just pay something up front and then I'll let it sit and do its thing. And that's a real shame because there's a tremendous loss of opportunity that exists in that graveyard of what could be isn't, because it's not being managed.
SPEAKER_02And the other thing is that I think a lot of people, a lot of smaller brands, they're under the misconception that an affiliate manager or an account manager is just like a customer support person. And that's really not the case. I mean, it's, you know, to be a really good affiliate manager, you need to understand all the different media buying formats. You need to actually have possibly even done media buying before, but then you also need a skill set of relationship management and also sales, commercial sales and commercial acumen. What can I afford to pay for this traffic? So I loved what you said for smaller brands. It's about thinking about where are you coming to in this channel? How are you going to compete? What is your strategy behind your program that's running and setting aside a proper budget to make sure that you can invest and partner up with some of the bigger publishers that are going to be able to drive that traffic and build that brand reach whilst you're also building out the performance side of the program? We talked about startup brands and we talked about strategy and everything else. But why do you think investing in an affiliate program right now is a great opportunity for brands, especially for those that want to find niche audiences and are possibly looking at using ambassadors, which is something that's kind of growing, influencer marketing, which is growing alongside this channel, if I could call it a channel. But how do we actually get these brands to speak out inside a noisy gimmicky marketplace? Because it is quite competitive now. It doesn't matter what industry you're in. Everybody and anybody wants to have an affiliate program, but how do you make sure yours actually works?
SPEAKER_00Great question. And I think that what's great about affiliate is it really targets buyers in the consideration phase. You think about the different types of models and search behavior that tap into affiliate websites. So, you know, influencers, content creators, for example. If you think about searches like best sofas to deliver to my house and you put that in Google search, a lot of the results that come up, they're monetizing your content via affiliate links. And if you're a sofa company, that's your highest conversion opportunity. You want your sofa links to be the ones that are having those affiliate commissions generated through those links. And I think that while sofa is not the most niche thing, we talk to so many different brands who someone has to really be searching for like the best of that type of thing, whatever that thing is. It's really taking what is a channel that's at scale and saying, where do I find the most narrow version of this? It's really looking to buy my thing and spend as much of my commission dollars there. And so what's happened with influencers, what's happened with the content creators, what's happened with the content sites, the digital press, you know, goodhousekeeping.com is an affiliate now, is that they are really helping narrow that audience in on very specific searches that really helps the niche brands who years ago, it was very difficult to get them, even if they were in their right category on a coupon page or a loyalty site, there's so much general traffic happening there. How are they gonna stand out against Macy's or Target or brands like that? So I think that the trend and the change in shopping behavior where people are not sure and they don't have loyalty to a specific store anymore. That's also like a post-COVID thing that's happened. They weren't able to rely on the same shopping anymore. We've seen that in the last few years. They don't really care who they buy from, as long as they find the best of the type of thing they're looking for. That has created a much bigger space for these more niche brands who are looking to get high conversion, high lifetime value customers for exactly what they sell.
SPEAKER_02So, do you think that, you know, we're talking about buyer behavior changing now, which it significantly has, and there's a couple of reports floating around, you know, A-Win does a report every year on trends, CJ does a report every year on trends. Do you think that we're still living in that kind of price-led environment where, you know, brands used to leverage affiliates in order to push their pricing models to actually convert customers? Or do you think customers are becoming more sophisticated in the way that they shop online? They want that best of product, it doesn't matter where it's from, doesn't actually matter what the price is, they just want to get it as quickly as possible. Has that impacted the way that affiliates have performed, especially in the e-commerce channel?
SPEAKER_00As you were asking that question, I was thinking about the macro effect of inflation on the affiliate industry, because in a space that really had in the past valued discount, cashback, couponing, which in our recessionary environment, like if you're back in 2008, 2009, I can remember those sites and categories of affiliate doing very well. I remember being asked by people, how's business? How's affiliate life? And it's like, listen, the economy is not great, so affiliate's doing very well. You know, that was a big part of shopping behavior, consumer behavior was I see a coupon code at checkout. I must get a coupon code. I need to save money. And in an inflationary environment, which is the first we really had in many years, so certainly in the affiliate space, I would say it's one of our first inflationary cycles, we're seeing much less price sensitivity and much more. I'm gonna spend whatever I need to spend because I really trust the review or opinion of this influencer, of this article on good housekeeping. The convenience factor is higher as a lever of satisfaction for consumers right now than the discount.
SPEAKER_02And that's actually changed the way that we strategize programs. Because, you know, first on, you know, when you launch an Avenue program, there's a typical life cycle that you go through, especially with a new brand coming into the market. It's that mix of, okay, we want targeted traffic, but we also want brand reach. And slowly you kind of measure that or peter that out as the program lifecycle matures. But I think you can bypass all of that now because you've got influencers, because you've got people that are content curators that get videos out and build audiences around that stuff. So it's kind of made our jobs a lot harder, I think.
SPEAKER_00Yes. I think when I started as an affiliate manager, you asked earlier, I didn't get a chance to answer it fully in terms of my history in the space. I'd started as an affiliate manager in the early 2000s, managing retail programs. And the job that I had then, in the beginning of affiliate, looks very different than the job my account managers have today.
SPEAKER_02Well, let's talk about that because you and I got into the space at the same time. And I'm sure that we can have a very interesting conversation. That's actually part of the learning journey that I want to pass on in this podcast for new digital marketers coming into this industry and want to specialize in affiliate. Talk about that because that's gold to me, you know, and only you and I have that history and we can share it right now. So back in the day when you got into affiliate marketing, which really was at the beginning of this life cycle, you know, I think it only started in 1999 according to Jeff Bezos. But what did an affiliate manager do back then?
SPEAKER_00So I think back then you could manage a program fully inside of a network. So if I was an account manager for Scholastic, which I was, and I worked in-house at Scholastic and our program was on LinkShare, which is now Rackutan, I could do all of my work for the day inside of that platform. I could reach the right people through the email addresses in that platform. I could send recruitment out from that platform. I could look at my links and my newsletter, send out my newsletters to that platform. Everything was in that hub, which is what it was built to do. Today, I can tell you, Leanne, that the networks, CJ, Racutan, and so on, even though they're value props, is this relationship network. You can't use those email addresses that publishers self-report to actually get in touch with the right people. So if I'm an account manager, I need a secret database that is built on years of experience of knowing who the most responsive person is, who's the right person at this place or that place.
SPEAKER_02That's what you're paying for when you hire an agency is fast connections to all the right traffic sources.
SPEAKER_00Yes, you can no longer recruit from inside that network. You have to use external tools, homegrown tools, partner-centric. My business has tools we've built. We've spent so much money building our own solutions because the things that are out there, which scrape algorithmically, are still coming up with too generic of a contact base or you know, ranking or the context for what to pay for paid placement. Used to just be able to say, like, hey, here's your VIP rate. You know, when we started, it's like, here's your VIP rate, here's your public rate, here's the VIP rate. Now I need to give our clients a full historical paid placement tracker to show them what they might get on their return. I mean, everything needs an incredible amount more of context. The dollar amounts are much bigger that we're talking about, and the deals are more complex, are disparate. They happen through all kinds of different places, in addition to a very unique role of that for any kind of program that you're running versus what we had then, which was like it was the same 20 partners that were big for most programs, and people were happy for that traffic.
SPEAKER_02Yeah, absolutely. We're not working in that simplified environment anymore. It's a very, very complex ecosystem. And I think any brands that are listening to this podcast really, what Stephanie's just shared here now is golden. This is why you work with an expert agency that can fast track your results and actually get you to the right place at the right time and for the right price. I want to talk a little bit more about influences and content curators because I know you've got a lot of experience working with publishers. And I want to make the best use of your time because I know you've already divulged so many nuggets. But we're seeing a lot more programs expand from traditional publisher types to gain traction in the space. But what I want to know is, you know, can content really drive your brand, your story, and sell your products more? And is there value in that? Because everybody's talking about it. But from your like broad strokes of view of the marketplace and all the different types of channels that you work in, are you seeing influencer marketing and content, you know, ambassadors? Do they actually drive real nuts and bolts ROI? Like same as an SEO or BBC affiliate would? Or are there certain types of industries that actually work best in those types of channels?
SPEAKER_00The short answer is that it really depends on who you are as a brand, how much brand recognition you have, and how exciting as an attribute your brand is. Because I would say that most brands consider themselves unique, consider themselves to have unique attributes that anyone would want to talk about. But when you're actually speaking with influencers and content creators, in order for them to want to authentically promote you and speak about you, which is the only way really that their audience believes it and wants to convert, they have to feel excited about it. And they don't think that every brand is exciting or has exciting attributes. And that's the disconnect. So sometimes you'll get an emerging brand with a lack of recognition who thinks they're doing something really cool, that only want to work with influencers and content creators and on a performance basis. And for that effort to give them the kind of return they would need to continue affiliate effort is a big lift because the amount of traction that you'd have to be able to get from the content and influencer audience to make that lift worthwhile is outsized to what they're going to want to pay for that effort. And that's where the friction and tension lie in the space. If you're a new streaming service, if you have this great innovative product that people can try out and review and it has all the bells and whistles, you have a much easier time because people want to pick it up and they have something to say about it and they're excited to be an ambassador for that product. And you can push performance through an influencer when you're that type of brand. When you're not, it has to be one part of a larger mix because you have to balance the commercials of the channel with wanting to be associated with a certain type of effort.
SPEAKER_02Yeah. So it's very much a strategic approach. It's not like everybody jump on the bandwagon now because influencers and content curators are the next top thing. It's more about understanding where you are in your affiliate lifecycle. What is it that you need in order to get to the next level? And how do you balance and segment those partnerships? That and your overall strategy. So let's talk about commercials, because that's always a hot topic and it changes all the time. And I think that's something else that brands need to understand is that supply and demand is changing constantly, and we're having to navigate that in order to spend clients' budgets efficiently and effectively. So talk a little bit about, you know, is this still ad fraud? We, you know, I've kind of spoken about at every conference that we ever ever go to. Compliance that's playing a huge factor in terms of how we're managing brand integrity as well. And we know that our data isn't always 100% accurate. As much as we would love to say that it is, it isn't. You know, there's multiple layers of tracking of things that happen between us and our publishers. How do you suggest that marketers handle these three kinds of impacts, disturbance integrity with their partners and continue to grow?
SPEAKER_00I would say that today's affiliate space, it is table stakes to provide fraud monitoring, content compliance services, and some form of reconciliation. We at Partner Centric, like I mentioned earlier, have created several different proprietary tools to handle different issues, among them ad fraud, compliance, and reconciliation. Brands who are very large and have had an existing program for a long time and are enterprise level are very concerned about reconciliation and ad fraud, especially if you're in a regulated industry. But there are also many of these like smaller brands for new entrants to the space who are a values-based business. They think of themselves as being a pillar of something. And they don't want to be associated with any kind of fraud, or they want to be very careful about how their brand is being mentioned across different websites. And so the content compliance comes into play with them as well. So I would say that one of the benefits of affiliate is the evolution of our tracking technology has made for a more transparent environment. But even amongst this transparency, while you're still working with publishers, with still a relationship, the publishers where it's hard to tell where the traffic is coming from, if they won't tell you, if the technology won't make it apparent, when you reach out to a publisher and they can't tell you or won't tell you, that is a bad sign. Like those are people that you don't want to work with. That still happens today, just like it did in the pioneer days of 2000.
SPEAKER_02Amazing. Okay. I want to wrap up our podcast with a very important question. I want to ask you what you think the shift will be as we look ahead to amplify our performance and performance marketing over the next five years. Because everybody looks to the year ahead. But having come from where you've come from and seen the industry evolve, I think it's no like history repeats itself. So looking back over where we've come from, how do you see the future of affiliate marketing developing in the next five years with everything that's going on around us, Web 3.0, fractured marketplaces, data centers, all of this stuff. What's your crystal ball moment? What do you think is going to happen in the next five years for performance marketing?
SPEAKER_00Five years in this space is like 50 years. So that's quite a question, right?
SPEAKER_02I know.
SPEAKER_00Yeah. Five years ago, I was on a panel uh at a conference back when we still did in-person conferences all the time about trends and five years from now. And I spoke a lot about how I thought referral marketing was going to become the new cool thing because I think the friends and family influence is stronger. There's a lot of studies on this, is stronger in consideration stage than what we see on social media with influencers and people that we don't know. So friends and family coupons sent to your phone, like, hey, I bought this, you should look at this. That was for several years in a row during shopping holiday season, the number one consideration for people buying holiday gifts was what their friends and family had told them they just bought. And so I always felt that that was the next type of affiliate that we were going to be able to add to the affiliate mix at scale. I would say the influencer is still, even then it was five years ago the thing that we were talking about. It's still the thing that we're talking about now. But I think that everyone is truly an influencer when you think about it in that way, of the friends and family sort of consideration set. And that's a huge opportunity for our channel if we can get the referral technology connected in with the things that we do in affiliate, which is right now still segmented. And the other thing that I would say, in addition to all the consolidation that we've seen amongst publishers, network platforms, even agencies like mine, I'm still an independent, the largest, probably independent left of agencies like mine. I think that in addition to that consolidation, we're going to see an even greater push toward what I would consider like performance PR. I think a lot of PR agencies have been hit hard with the fact that they've not been able to track back to results. And a lot of brands want to take that sort of like free approach and push it through affiliate and say, I want you to get me more placements on digital press, because I think years ago, the good housekeepings of the world, the other magazine and newspaper publications realized they needed to commercialize their pages, they needed to get more ad revenue. And so now if you're a PR person and you're going to say, like, I want my client to be on this, here's my pitch, they're going to say, Well, does your client have an affiliate program? I don't want to put them on my page unless I can make money off of it. So we're seeing so much now. Even sometimes I have PR agencies reach out to me and say, like, hey, can we manage this client? Because they don't do affiliate. So I think that's going to continue in a big way.
SPEAKER_02That's quite interesting because I like what you said about the kind of referral stuff, because my vision for the future of affinite marketing is that everybody in the world is an affiliate of some sort, whether you're a bigger finite or a small affinite, and everybody's got a side hustle. Because even those social media channels are enabling this stuff. Like TikTok's enabling, you know, Instagram's enabled it now. You can sell things with referral links in your actual social media platform. So you don't even need to know how to create a website. You just need to have a following, an audience. And who doesn't have an audience on Facebook, Insta, whatever channel it is that you're on, you know, I mean Clubhouse, whatever your choice of fancy is, we're all building audiences around what we do and what we talk about. And my vision is that we we're going to see kind of like micro referrers almost, you know, like these thousands and thousands of small referrers that can earn commission through Bitcoin, like a quarter of a penny or something just for sharing content. And we did touch on that a little bit in our summit in January. So I think with the experience that you've got, uh, I don't think you're far off in terms of what you think the vision of the future is. And it's interesting to speak to people that have this much experience and who have come through the industry as we know it today, because there isn't any way to go learn this stuff. It's all in our heads as we've acquired it. So it's been an absolute pleasure to have you on this podcast and to have you share your journey and to talk about the market, the way that you're seeing it, across all the different vehicles that you're working in. So it's really been a pleasure to host you today, Stephanie. And thanks very much for being on the podcast with me.
SPEAKER_00Thanks so much for having me. It was a great conversation.
SPEAKER_03And that's a wrap for this week's Affiliate Insider Affiliate Marketing Podcast. If you're loving what we're putting down in this series, head on over to Apple iTunes and give us a five-star rating and subscribe to our podcast channel so you never miss another insightful episode. Tune in next week for more digital marketing insights and traffic driving tips, tricks and strategies to keep your digital marketing fresh and your affiliate program driving consistent sales.
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