Affiliates was the focus of our latest webinar and alongside our Head of Affiliates, Immy Hussain, we welcomed Amy Hadley from Awin and Iain Davidson from Three to discuss why this channel should be a key focus in your marketing strategy too.
Don’t worry if you missed all of the insight and recommendations, the full webinar is below for you to watch or read. If you have any questions about improving your Affiliate Marketing activity, get in touch with us today at [email protected].
Welcome to Win with Affiliate Marketing: Why should this channel be at the forefront of your marketing strategy?
My name is Martin Corcoran, I am the CEO and owner of Summit and we are delighted to have you on this webinar.
- Introducing Summit
- How the affiliate channel is helping business grow – Amy Hadley, Awin
- Summit X Affiliates: Our experience
- Three Mobile – Iain Davidson, Three
- What is the future of affiliate marketing?
Who are Summit?
We are Changemakers in Performance Marketing and we specialise in retail. We make it more likely that customers by from our clients than anyone else and we do that across 5 very specific marketing channels: Paid Social, Display, Paid Search, Organic Search and Affiliate Marketing, which is what we’re hear to talk about today.
Our people, our technology and our 20 years’ experience in the industry make this possible. In the last 3 years we’ve driven over £3 billion online sales for our clients.
A couple of important badges and recognition at the bottom- we are a Google Premier Partner and an Impact.com certified agency. We partner with Commission Junction and today, most importantly, Awin- and we can’t wait to hear from them about this channel, how it’s growing and strategically why it’s so important.
At Summit we work with 28 of the top 500 retail brands according to the latest Retail X report in 2022. And we’re working with them across a variety of performance marketing channels. Affiliate marketing is becoming absolutely essential within that channel mix- it’s always been essential, it’s always been a low-risk channel, it’s always been a high performance, high sales channel, but it’s becoming even more important in that channel mix. So we wanted to take a deep dive into the channel and share some information, tips and experience to help all of our audience maximise that channel.
A quick poll to start: Is Affiliate Marketing part of your marketing strategy?
- Yes and we do it well – 23%
- Yes but we need some support – 41%
- No- how can you help us? – 36%
How is the affiliate channel helping business grow?
We are very pleased to invite Amy Hadley Senior Account Director to share her thoughts and experiences on behalf of Awin.
Who are Awin?
I want to spend a bit of time speaking about Affiliates and Awin and how the affiliate channel is helping business grow! Here is a bit of insight about Awin:
- We are the biggest global affiliate marketing network
- We connect brands with customers across 1 million+ websites
- We were born in 2000 – similar to Summit
- We are currently active in over 180 markets globally, with over 225000 active publishers driving sales for our brands
- Across the network in terms of ROI we see an average across the globe of 19 euros return for ever 1 euro invested – so I’m sure everyone will agree it is a safe channel, performance based and low risk
In terms of our DNA as a company, we have acquired a few different affiliate marketing technologies and platforms, but most recently last year, Single View. For those who don’t know, as part of Awin they provide a standalone, non-biased, multi-touch attribution technology and this is a really nice way for us to empower our advertisers and agency partners to understand the true value beyond the last click and work smartly to invest across affiliates whilst also seeing how affiliates interplays with other channels and how we should always consider the bigger holistic view.
Our three core client sectors are retail, telco and travel. We provide varying service levels and tech packages to make affiliate marketing accessible to any size online business. We’re very proud to support some of the UK’s largest brands with their affiliate activity and overall channel strategy.
Awin’s Retail Focussed Data
I want to shine a light on Awin’s retail sector data specifically. Any online marketer will be familiar with the scale to which the pandemic accelerated growth online- and this trend was definitely seen across the affiliate channel. We’ll also hopefully showcase the size of the opportunity if you’re not fully maximising the affiliate channel currently.
In terms of Awin data, we saw the pandemic fuelled huge online growth, +70% versus the pre pandemic baseline and to give revenue context, in Q4 2021 (our peak period for the retail sector on the network) we tracked over £20million in revenue for our retailers on the network last year.
The blue line represents 2022 to date and unsurprisingly we’re seeing an average decline of 7% when we compare performance YOY and this is closely connected to covid restrictions being lifted and that 2020 demand tail off- but there are still an incredibly large number of sales coming through the network.
Looking at the YTD decline, we also believe the increase in costs of living are partially to blame for this slowed retail growth. Looking at AOV, the key statistics highlight an 8% increase in retail AOV so far vs 2021, and we do think this is a result of retailers having to increase product prices to counter the increased costs they’re incurring, whether that’s delivery or the increased costs of making things.
The electrical sector appears to have increased on average 11% YoY, which is very substantial when you consider the price of things going up. This graph gives you a view of the sub sectors within the wider retail space that we operate across at Awin. We all read wider macro and economic trends, but it’s nice for us to use the data we have on the network to see how it stacks up against that.
“57% of retailer claimed that they had ‘unusual freedom’ to be more innovative in their marketing strategies and approaches to new customer acquisition in 2020” Adobe Retail Trends Report 2021.
So going back to the phenomenal period we’ve seen in the online retail sector off the back of the pandemic and the need to shop online. We’ve certainly seen this notion reflected across our client set and the affiliate industry, as brands focus on innovation and customer acquisition in new ways and with larger amounts of spend than ever before. This is a nice time to reflect on what it is that is making the strategic decisions and what a recipe for success looks like when this spend is going into the channel.
What is a best-in-class affiliate channel strategy made of?
We find that the most successful affiliate progams place focus on these key areas:
This is a really important part of all online channels, but particularly affiliates if you consider that we track every online transaction made with an affiliate link in real time. Our recommendation is that our advertisers pass back as much information with that transaction as possible. So whilst we love to receive details around product type (what someone is buying and at what price point) etc. we also would love to have insight around the delivery and payment methods that those consumers are using so that we can get a typical customer profile shopping via the channel for our brands and drilling down on a partner level so that we can actually work out where we’re most profitable and drive value and reward commission accordingly where we see the highest price points and value.
This is a phrase that anyone within the affiliate channel will be familiar with and will start to hear more about. Brand Partnerships is a huge focus for us at Awin. The affiliate channel is a brilliant place for you to lean on and work with other brands. We like to introduce brands to each other and we find affinities with non-competing brands to boost audience engagement. The key point to highlight here is that the affiliate channel lends itself well to the bigger brand partnerships, because we’re tracking those sales in real time and making these brand partnerships measurable and you can see real time return.
This is something we’ve seen a bit of uptake in over the last 12 months, particularly in retail. When we refer to supplier funding, we talk about the strategic injection of additional spend into the channel. As a case study/example, Curries have different suppliers that they work with, one being Oulus who wanted to promote a VR headset with extra PR. They gave Curries specific budget for the affiliate channel to promote their product. We refer to that as supplier funding. It is a nice way of adding a revenue stream and for our affiliates team brand side to get that affiliate spend and work on some cool branded campaigns.
This is something we’ve been speaking about for 2 years but over the last 12 months we’ve seen a huge influx of tech partners. How we would describe these partners is that they provide innovative technology to our clients. Whether that supports product bundling or site abandonment, there is a tech partner for every website need or customer journey enhancement. It is great to see the emergence of many tech partners in the channel working on our typical affiliate model in terms of commercials.
The level of technology innovation
Our tech partners are all easily integrated within the Awin MasterTag, which means that when one of our clients wants to utilise a tech partner and make the most of their innovation, it is a quick plug and play set up because of the Awin MasterTag and the way we’re integrated with these partners.
57% of retailers claimed that they had ‘unusual freedom’ to be more innovative in their marketing strategies and approaches to new customer acquisition in 2020Adobe Retail Trends Report
For huge corporations where dev timelines are huge and the affiliate channel doesn’t take priority, this is a good example of how the affiliate channel has begun spanning other parts of businesses and how we can support with wider business needs too.
The Awin Report 2022: Power 100, is an industry first, profiling 100 of the most exciting partnerships on our global platform across every market and sector. The #Power100 will inspire, inform and challenge your perceptions of affiliate and partner marketing, providing the perfect guide to amplify your activity. Download the Power 100 report here!
Summit’s recommendations for Affiliate success
It’s great hearing what Awin can offer, and we always strive to be able to be grow an account to achieve a best-in-class status. However, before we get there, they are a few things that need to be done first.
What have we seen in affiliates?
Over the last few years, we have noticed that affiliate marketing generates between 5-50% of all online revenue for a brand. Yet with this in mind the affiliate strategy and budgeting client side is often thought about after PPC, SEO and Paid social. Leaving affiliates as an afterthought.
Our last 3 client wins have been achieved through audits of an affiliate account where the team identified some very quick wins through mistakes being made. Mistakes like incorrect messaging and pricing, links not working or leading to dead pages which are obvious indications that the program has been neglected over time. There were also obvious growth opportunities that have not been identified and this should form part of your day to day running of an affiliate program.
Summit’s affiliate business has also been growing. As Martin mentioned earlier, we focus on 5 marketing channels and Affiliates was only previously a small part of that. However, through referrals and supporting networks like Awin and Impact etc. we have gained even more programs to manage.
It is exciting for us when we’re approached by businesses that have no affiliate program at all as we get to demonstrate the full potential of the channel.
Summit Affiliate Case Studies
In terms of client wins I have a couple of case studies here that I wanted to highlight as we’ve seen phenomenal performance over the past 6 months and this is nothing to do with industry trends but good old fashioned hard work and implementation of our full service.
The first is a very well-known UK retailer that also has stores across the country. They are on the Awin network and approached us to help grow their existing affiliate program. We started with fixing the account and activating some quick wins and then moved into the growth phase. YTD we have now exceeded a 1000% increase in revenue while maintaining our COS targets. A massive achievement and all this without a single voucher code.
The next case study is for a B2B business where we have again experienced growth through recruiting the right partners to compliment the brand. We are also working very closely with Awin to identify additional growth opportunities. In the last 6 months we have seen traffic increase by 35% and revenue increase by 93%. All while saving the clients £10K by implementing a fair and accurate validation process.
These are just 2 stories from our current affiliate clients and seeing this growth has been really great for the team and Summit.
What have we seen change over the years?
Well, we have still seen the growth of the traditional affiliates such as Cashback, Voucher code, Loyalty, charity and comparison sites and I do not think they will be going away any time soon. These companies alone are very well-known household brands and a true testament to the growth of the channel.
We have also seen some massive growth from partners that are providing technology within the affiliate channel. Browser extensions like Honey and Pouch have made a real impact, alongside businesses like Go certify with its technology to verify closed user groups allowing the right people to get the right discounts or promotions.
Finally, we have also seen the growth of Intent.ly, formally Smarterclick, which started with intelligent overlays to help increase conversion and moved to machine learning tech for up sell opportunities.
We have seen CCS affiliates in the marketing mix and finally content. Some people think the affiliate channel is only vouchers and discounts, but it has opportunities at every stage of the marketing funnel, and we have seen content making a huge impact for our clients, with noticeable increases coming from Tech Radar, MSE and an increase from sub networks like Skimlinks.
What are our top 6 recommendations?
Implementation of best practice
First you need to get the basics right. The affiliate channel has some automation but it is limited, so a lot of the daily and weekly tasks needed are quite labour intensive. You need to ensure:
- Network checks – many times I have logged in and it’s not working
- Links all working as expected
- Correct pricing and messaging
- Up to date with your validations, approvals
- PPC checks – I know there are tools out there that can help with this, but a manual check can not hurt
- Is the coverage you secured live?
These are just a few of the things you should check and this BAU should be conducted like clockwork.
Multi-channel planning and measurement
We have the pleasure of working with some of our clients across all the online marketing channels an this really help us plan our strategy with the other teams to ensure the affiliate contribution compliments the overall plan and reporting takes into account the full picture.
Protecting the brand should be one of the most important aspects of all your work. The affiliates are an extension of your brand and if the messaging is wrong, codes are out of date or the customer journey is flawed this can have a serious effect on your client as a whole.
Ways to do this include the implementation of best practices and recruitment of the right partners.
Recruit the right affiliate and partner mix
You should always recruit the right partners for your affiliate program. There are 1000s of businesses you can recruit but at Summit we try to limit the number of affiliates we recruit and prefer quality over quantity. This helps with brand protection and allows you to effectively communicate with them on a regular basis. Also, keep an eye out for what’s new- talk to the networks as they have some great insights to provide and can help you identify gaps in your affiliate program.
Test & Learn approach
It’s important to plan your budgets as early as you can and if possible, set aside a budget to test new promotional opportunities. We recommend a test and learn approach as this is the best way to see the impact of each activity. We try not to keep an always on policy and regularly switch up the CPA rates, test newsletters, competitions, and implementation of flash rates to see its impact. We then compile a performance library so we have a better understanding of what to do at key times for our clients. Finally, the most important thing for me is work with the partners and networks closely.
Access and collaboration with Affiliate experts
Building a strong relationship with the partners and networks will be one of the best things you can do to grow your affiliate program. The affiliates and networks can provide you with insights on performance vs your competitors and also identify gaps in your affiliate program and highlight tenancy opportunities that have worked best.
Now we have another poll! What’s your biggest challenge with affiliate marketing?
- Knowing where to start – 26%
- Keeping up to date with admin – 13%
- Growing a mature account – 26%
- Controlling your budget – 17%
- Recruiting the right partners – 17%
An introduction to Iain Davidson at Three
I am Affiliates Manager at Three have been there for 3 years. It’s my role to use my previous experience at comparison sites and previous agencies to grow Three’s affiliate program. What we’ve seen in the last couple of years is increased competition in that price comparison space and people looking forward to getting value for money and it’s been my responsibility to lead with that. In recent years we’ve been launching home broadband which is an exciting project using our 5G network which according to the spectrums we have, allows us to have the fastest 5G in the UK. We are a little bit behind with the rollout versus some competitors but if you are in a Three 5G area, then give it a go!
Why have affiliates become so important to Three and the telco industry?
Over the last couple of years telco has become a utility like gas and electric. You need to have internet in your home, and it has to be good (especially during and post pandemic!). Mobile phones are mini computers in your pocket. They take your photos now too instead of you needing a digital camera. You don’t need maps anymore because they’re on your phone.
As mobiles become more essential, you use more data and then you get into this competitive space- do I need more data and at what price? So comparison sites and cashback sites make sure you get good value for your money and have been highly important. It also unlocks a whole new area of customer for you. If someone goes directly to your website, this is someone who has good brand loyalty. If someone is using a comparison site, it’s someone who is looking for the most value for money, so it’s a way for you to show your value.
After many years working in affiliates, what is your biggest learning?
The important thing is don’t underestimate how important your relationships are with your partners. You find in affiliates that people grow quite quickly, but then move on to other businesses so it’s important to expand your network as you don’t know when you might need them! You might speak to someone at a conference or connect on LinkedIn and it isn’t the right time, but one or both of you might change roles and you both need each other and having that relationship is important. Similarly if you want to get something done quickly and efficiently, it’s a lot easier if you know the more senior people at the businesses you work with. It opens up doors to new partnerships- it’s really important.
Martin adds that there is a need for a deeper relationship between brands, agencies and advertising partners in terms of being able to do things quickly and add even more value to the medium.
If other industries, the partnership between businesses is likely one on one, but it’s so much more than that in affiliate marketing. Even just between the 2 brands, if that’s the brand and the affiliate, there is the relationship managers, but also finance teams, marketing teams, legal teams. Then there are the intermediaries, so the affiliate networks and agencies. Now there are 3 or more different companies involved in one promotion. People skills are really important in this industry.
What is the best development of technology in the channel that you’ve been able to win with?
Multi touch views. Being able to understand how multiple partners or multiple marketing channels have been involved in the sale. Amy mentioned Single View earlier are one of these companies. We get a view of this in Adobe tracking. What it means is we can see if customers have spent time looking at a content site, but then they’ve closed via a cashback site- but this can help you see the value of the content site. So you might invest tenancy or bonuses based on the impressions you get from their site as a pose to the traditional last click CPA.
In terms of Three Mobile, what is coming up in the future?
Three is a mature network, by no means the largest the mobile network, but effectively we’re getting to the capacity of how many people have phones and sims, and not everyone needs two phones. So, there is a limit to this, and we need to make sure we’re getting our fair share of that space.
Where we have a massive opportunity for growth is 5G broadband. I am using it now and it’s faster than anything I could have got in the area. As our 5G rolls out, we think it will be a great opportunity for people. There are certain areas of the country who have been neglected by Openreach or Virgin Media etc ., but if you’re in an area where there is a 5G mast, it could be a good alternative for you.
Looking at market share data from our partner Awin, we’ve made big strides already and we don’t even have a lot of the key partners on boarded so I think 5G will be our key are for growth moving forwards!
Now let’s everyone back for the Q&A!
Amy, can you elaborate on brand partnerships, and can you share a few examples?
I think brand partnerships are traditionally something that sit with a different team brand side and is sometimes based offline, focused on engagement rather than revenue driving KPIs. When we think about affiliate brand partnerships, they’re an additional revenue stream within our easily trackable and measurable affiliate model. That’s why it’s an exciting part of the industry and something we are seeing more of. It links to the idea that brands have had to be more creative and have had the budgets to think outside of the box to see if these things work.
In terms of how brand partnerships can work, there are a few ways. Reciprocally where they promote to each other’s audiences, perhaps to get in front of a customer demographic that you know will identify with your brand message, or perhaps it’s an ethical fit etc..
We have also seen some advertisers take on the role of affiliate; they’ve made an account on Awin and cherry picked the brands on the network that they want to promote to their own audience. As an example, Taste Guard were impacted by the pandemic as nobody was going out for dinner and using their money off deals. They quickly pivoted to the affiliate model and started to promote our other advertisers to their audience as more of an affiliate. Most recently we’ve seen an uptake from brands such as Look Fantastic who have created their own reward portal that’s purely by affiliate deals and tracking from the Awin network.
Out of the box collaboration in the channel is definitely something to look out for!
Immy, if brands aren’t in affiliate marketing and don’t have the same resource and budget as a bigger business, how do they get into affiliate marketing and which partners do you recommend?
People come to us to see if there is an opportunity in the affiliate space for them. Usually, we start by looking at their competitors to see what they’re doing in the space as that’s usually a good indication as to whether there is an opportunity.
In terms of recommending partners, it depends on what service or products they offer as this narrows down which affiliates you can recruit and work with.
We would also use their own audience data so that we understand their customers, and then match that with the demographics on partner sites and start recruiting that way.
One thing we highly recommend when we take on partners, is that they use the full marketing funnel from awareness via content affiliates to purchase using cashback etc..
Immy, what does a content affiliate do and how does that differ from the usual discounts code affiliates we see?
They can still advertise promotions, but they can help generate awareness of a brand or product and talk in greater detail about what you’re offering. Some content sites compare you to your rival brands and give fair, honest opinion about a product or service. It also has SEO value so it’s a gret thing to do.
Awin have the assist function so that we can see the part that content sites play. Previously content sites would drive a lot of tragic to your program, but cashback or voucher code site would take the credit. Whereas systems like Awin’s allow you to reward based on merit.
Amy, How do Awin position themselves versus Google and Facebook, and if you’re a marketer how should you be positioning Awin within that broader, mega advertising platform?
If we are going big here, whilst Google is the face of Paid Search and Facebook is the brand behind social media, we’d love to be the face of Affiliate Marketing. As the largest global network, we would claim that we are! In terms of being that brand, we position ourselves as market leaders and it’s more education about the channel, making sure that we’re making it easy and accessible to as many online retailers, telco providers and travel brands as possible.
Essentially the scope and scale of the opportunity is huge so we’d love to be in that arena with those big names. When we looked back at ad spend numbers released last year (reflective of 2020- the year of explosive growth), it showed that affiliate marketing grew at the same rate as the big 5 tech giants: Facebook, Google, Amazon, Microsoft, and Apple.
It is a huge opportunity, it’s continuing to grow and it’s a really exciting time for the industry. If we keep this pace, who’s to say we can’t be as big as them one day!
How can you be sure that affiliate marketing truly unlocks incrementality?
Immy – This is a huge question. If I’m going to look at one area of incrementality, then the affiliate channel opens you up to a whole new audience. For example, Quidco- their newsletter goes to over 3 million members (possibly higher), but it is a huge market to tap into and there are thousands of partners to work with. In terms of incrementality, I’d say that is where it is- the customers you wouldn’t find in other advertising channels. I am a savvy shopper and I shop around- I have money to spend but want to get the best price so I always go through the affiliate channel.
Amy – Completely agree with Immy- you need to think about the type of customer and if you’re not playing the full affiliate game and not doing those discounting activities then you’ll never know if you’d get that customer or not as they’ll go with a competitor who is. In terms of backing that up and providing insights to prove it, this is why we heavily suggest that our brands pass back as much data to us as possible within custom parameters and we refer to these insights as conversion analytics which is essentially what that is. Understanding who the customer is and a lot of detail about them so that we can be sure the value is there and then we can weight the commissions in the way we reward and invest towards the most profitable affiliates who drive the most profitable customers. Technology such as Single View and Iain’s internal reporting means we’re always on track with reporting and we’re never going to be 6 months down the line and wonder if this activity is incremental. That is how we control it and ensure we’re always thinking about incrementality on our side.
Iain – Incrementality is asked about a lot. Alluding to Amy’s reporting, a key thing is looking at customer credit profiles. We’re able to look at mosaic profiling, look at demographics and different types of demographics of customers who have a propensity to purchase though the affiliate channel. What we can see is that it is quite a different type of customer that foes trough affiliate channel versus direct. Through the affiliate channel they’re typically more educated and higher earners so there is a big benefit for Three here- so whilst you’re getting someone who is initially paying less, they’re less likely to not pay their bills and more likely to stick around as long as the offer continues to be good. So that’s something we can see in that aspect. In terms of the industry, a lot of the regulation is pushing people to comparison sites EG encouraging people to regularly go to comparisons sites for gas and electricity to make sure you’re on the best deal, that mentality is coming to telco too. So, by entering in that space you’re opening yourself to a new market that you might not have been in before.
If you have any questions about affiliate marketing, please get in touch with us today at [email protected] and we will be happy to help you grow your affiliate channel. For more reasons why we love affiliate marketing, check out our 5 Things You Need To Know About Affiliates article.