In full candor, my enthusiasm for partnership and affiliate marketing didn’t start out very high by any standard of measurement. It is not something I hide. I agreed to run a turnaround of a relatively high-profile distressed business in the category. It wasn’t an easy “yes” to the private equity sponsors. It involved a lot of diligence.
It was not lost on me that this is a category that for years had been constrained by its own now-well-chronicled bad behaviors, including PPC and SEO manipulation, opaque arbitrage, click stuffing, grade-your-own homework measurement and a self-enriching game of last-click hijacks. It wasn’t particularly shocking to find that CEOs and CMOs were still putting their most important partnerships in the hands of their business development teams instead of their affiliate teams. It also wasn’t particularly shocking to consistently find that more than 60 percent of a program’s revenue was allocated to less than five partners. Not exactly a recipe for growth.
Don’t misunderstand, collectively we’ve made real progress over the past few years. New narratives have been written, and technology innovation has enabled diversification of partners, equitable attribution and, with it, new opportunity. New capital has flowed into category businesses, and, with it, the skepticism has given way to optimism and clear progress on the path to authentic enthusiasm from those whom we seek legitimacy (otherwise known as significant increases in category spend).
My colleague Michael Jaconi, the CEO of Button, recently referenced the ongoing effort to expand the addressable market for affiliate and partner marketing with a powerful call-out identifying a potential path for “affiliate companies to escape the enterprise value smurfdom they’ve faced.” Our channel (yes, it is a channel) has finally started to take ownership of taking down the self-imposed barriers to mainstream legitimacy and thereby opening a much larger addressable market. This is due to the fact that the strategies (partner diversification), methodologies (multi-touch attribution and dynamic commissioning) and underlying technologies (automation and open APIs) found in platforms like ours have grown up and are delivering verifiable evidence of the integral role we play in driving performance business outcomes and profitable growth for marketers, partners and creators.
Taking the Next Step and Changing the Conversation
That’s a good start, but it is only a start. To fight this fight, we have to get our hands into it and refuse to settle, in order to move the industry further away from the status quo in favor of a better way for all involved. No CEO or CMO should ever have to question their ability to trust the affiliate channel with their most important partnerships, and there is still a significant road to travel before we get there.
To say that the key to overcoming shortcomings is getting the CEO and CMO on board sounds a little rah-rah simplistic. But if we as a dedicated, evolving ecosystem lean into innovation in all the areas even slightly lacking, the aggregate effect of our active enthusiasm and quest for change is great. The key will be to ensure we’re all speaking from the same script.
Yes, we all wish we had a crystal ball to look to the future five years out. But it’s safe to say that over that time, there’ll be some core themes that we’ll see resolved, as those of us who have been in it are committed to progress. I think, first and foremost, that the legacy network model will continue to fade into the background as it has in all of the other paid channels. If you think about programmatic display, it went from a network model to a programmatic model. It took a period of years for that to happen. And the larger network models, ultimately, gave way to the programmatic providers, both on the demand side and the supply side. According to eMarketer, fully nine in 10 digital display ad dollars will transact programmatically in 2022.
In order to move the category forward, the onus has been on innovation to really move the channel beyond its last-click history from an attribution perspective. This has been happening, as we collectively raise the bar on both measurement and attribution. In essence, we have to be willing to enable measurement of our channel’s contribution with the standardized tool sets and methodologies deployed against primary channels. So that’s what we’ll see: more innovation, more disruption, more movement away from legacy models and the continued fuel that will come based on the needs of both brands and partners for this category to increase its contribution over time.
The next necessary area of innovation is as much about imagination as anything—making sure we and our clients are reimagining partner types to drive business results. Historically in a last-click channel, an affiliate was generally thought of as a cashback site or a coupon provider. Then there came mass media publishers, accessed through an aggregator or subnetwork model (the result of the primary inventory owner devaluing the channel and handing it to someone else to monetize on their behalf). And now, we’re seeing a pretty significant expansion of the affiliate definition to include influencers and even what we might call a performance PR model.
Nontraditional partners that may not have been considered relevant to the affiliate and partner channel before are now in a position to come in. Brand-to-brand partnerships have become much more prominent in our talk track, driven largely by the recognition that the next generation of consumer is buying based on trust and that matching the first-party data sets of complementary brands is a powerful remedy to the loss of targeting resulting from ITP and the deprecation of the third-party cookie. Look no further than the recent growth in retail media ad network spending as consumer goods manufacturers use search and display ads to reach target customers during their purchase journey.
The automation underpinning the growth of the channel and enabling nontraditional partnerships by simplifying administration is a big part of this. The historic manual nature of the channel— often romanticized by references to “this is a relationship channel,” without acknowledgement that the ramification of a purely human-based dynamic is a complete lack of access to diversified scale—is a dynamic that is increasingly falling away. This bodes well for continued growth, but we are still in the early innings.
Together, we must continue to press forward and endeavor to change the narrative around affiliate and partner marketing.