An Educational Guide to the Affiliate Marketing Industry
The affiliate marketing space is complicated. For someone new to the industry, it can take years to get a complete grasp on the different players and how they operate together. Educating oneself is made even more difficult by the substantial changes that occurred in the space this year – mergers, acquisitions, and new entrants are contributing to a whirlwind of consolidation and growth in the market. We built this educational guide out of necessity, as we worked to help our employees, customers, and partners navigate the current affiliate marketing ecosystem.
Our vision for Grovia is oriented around lowering barriers to entry for brands new to affiliate marketing. We execute on this by 1) acting as an affiliate recruitment educator for marketing professionals new to the space 2) building automated tools and processes that lower the cost of kickstarting affiliate programs through more efficient partner recruitment, and 3) investing time and resources into developing win-win partnerships with the players in the affiliate marketing industry that are working towards this shared vision.
As this tumultuous year winds down, we thought it was fitting to put together an up-to-date resource for learning about the different players in the affiliate marketing ecosystem. We hope you find it useful in educating yourself, your teams, your customers, and your prospects! Here’s to working together to make affiliate marketing even better in 2021!
Ian Brodie and Rob Schab
Navigating the 2021 Affiliate Marketing Landscape:
Affiliate networks provide the technology and infrastructure for brands to connect with and manage affiliate partnerships easily. Conversely, networks give affiliates an interface to discover brands and promotion offers quickly. Today, the lines between an affiliate network and a partner management platform are increasingly blurry. All networks have partner management tools, and most partner management platforms have networks built in.
Much like traditional affiliate networks, sub-affiliate networks have an inventory of their partners. In theory, a brand could (and should) work with numerous sub-affiliate networks. A brand will most commonly manage partnerships with both direct affiliates and sub-affiliate networks alike through one primary network or partner management platform.
Content partners create content to share with their audience that highlights your product or service. These partners most often take the form of bloggers, review sites, YouTube creators, or social media influencers. Most often, content partners will be focused on a specific niche, while others will touch on various broad topics. To promote brands, content partners typically will include an affiliate link in a sponsored post oriented around a brand’s product or service. Content partners are highly-influential and can produce strong engagement from their audience.
Cashback & Loyalty
Cashback and rewards affiliates incentivize users to shop through select vendors in exchange for some form of reward (i.e., cash, points, bitcoin). Because transaction-based partners like Dosh, Drop, or Cardlytics own or partner with credit card providers, they work on a cost-per-transaction model instead of a traditional last-click affiliate model.
Traditional Cashback affiliates like Cartera, Ibotta, and Top Cashback similarly reward users for purchasing through select vendors. Converse to transaction-based rewards companies, these companies work on a more traditional last-click model. These companies are often referred to as Loyalty partners because they have created a community of hundreds of millions of users who will only check out if they get a reward, making them loyal to both their rewards app and their associated merchants.
Incent-based partners provide their users with rewards when they complete certain actions (i.e. sign up for a trial, complete survey, download an app). Sites like Swagbucks, MyPoints, and others, have millions of users and can be great for both brand awareness as well as driving sign ups or downloads art scale. However, with the true intent of the user in-question, plan for a higher than normal turnover rate and much lower LTV when dabbling in the incent channel.
Coupon sites aggregate discounts for users to browse, hence influencing their checkout decision. Coupon advocates claim that a large subset of consumers will not checkout without a coupon and that coupon sites improve conversion rates. Others will argue that coupon sites take commissions away from hardworking content and review partners. Fortunately, with advances in partner management technology, you can get the best of both worlds, giving credit where credit is due through multi-touch attribution and commission splitting. Check out Rakuten’s Multi-touch Commissioning or AvantLink’s AvantMetrics.
A lot has changed since the early days of affiliate marketing. While fraud still lingers, advancements in technology have made it a lot easier to detect and prevent fraudulent affiliate sales. In essence, fraud detection tools monitor for affiliate compliance with program terms and conditions. Typically these means ensuring: 1) a brand’s trademark keywords are not being infringed, 2) affiliates are placing promotional content in a brand-appropriate context, and 3) the traffic that affiliates are driving to the advertiser’s website is high-quality.
Conversion optimization solutions are focused on keeping consumers engaged on a brand’s website longer to increase the likelihood of a purchase. For example, a common strategy for improving site conversions is through reducing site and cart abandonment. Brands execute this strategy by providing contextual, relevant onsite messaging and promotion offers upon expected abandonment.
Content aggregators (a.k.a. content monetization platforms) provide the technology for publishers to easily monetize their content with affiliate links. Companies like Skimlinks, Sovrn, and Yieldkit are the platform of choice for many high-performing publications due to their ability to automate affiliate linking and maximize commissions.
Partner Management Software
Partner management platforms aim to provide brands everything they need to run an in-house affiliate program successfully. Tracking, reporting, payments, and fraud prevention are just a few of the many tools these platforms have to offer. Each platform has its own unique merits. For example, Refersion has a plug-and-play integration with most shopping carts. Impact has an end-to-end solution spanning from discovery and recruitment to contracts and payments. And TUNE enables your affiliate program to span web, mobile web, and apps through its comprehensive Mobile Measurement Platform (MMP) integrations. Wondering which platform is right for you? Check out MarTech Record’s Buyers Guide.
Partner programs drive net new acquisition and revenue for SaaS companies, without the scaling costs of typical marketing and sales channels. Partners allow you to access niche audiences and position your products much more effectively because of the trust these audiences have in their expertise and relationship.
PartnerStack caters to the key differences that exist in SaaS programs when compared to that of B2C ecommerce. PartnerStack provides a solution that pays out recurring commissions on subscription renewals that most SaaS businesses operate on, going so far as handling all partner payouts on the same platform. PartnerStack allows you to scale multiple types of partner programs and optimize partner enablement. You even gain access to their network of partners — accelerating your program’s partner acquisition.
While platforms like Everflow, Cake, and Affise are commonly used by advertisers, they also enable affiliate networks, mobile networks, and media buyers to manage the many-to-many relationships between advertisers and publishers. These platforms excel in providing technology around tracking, fraud prevention, advanced reporting, and more.
While brands need tools to manage partnerships with many partners, publishers need tools to manage numerous brands’ partnerships. Platforms like Affluent and Voluum integrate with hundreds of networks and traffic sources to allow publishers to quickly discover offers while providing the tools to launch and optimize ad campaigns effectively.
Publisher Discovery Tools
Publisher discovery tools help advertisers find brand-appropriate partners. These tools curate and maintain a searchable database of publishers and affiliates that brands can use to build partner recruitment lists. These tools typically maintain their data through web and social media scraping, content categorization, and machine learning. Some of these tools also offer CRM-like functionality to help keep track of partner interactions, facilitate partner outreach, and maintain organized partner relationship data.
Partner Recruitment Agencies (PRAs) work on behalf of brands to discover, recruit, and activate partners. They specialize in recruiting both affiliates and influencers from a wide range of verticals, and deploy automation to streamline the ongoing process of developing relationships between brands and partners. PRAs enable brands to outsource the heavy-lifting of onboarding new partners, while maintaining control of their in-house affiliate program.
Outsourced Program Managers (or OPMs), such as All-Inclusive Marketing (AIM), are agencies that brands hire to develop, manage, and optimize their entire affiliate channel. OPMs are an alternative to running a program in-house or turning over management to an affiliate network. In addition to recruiting partners (like Partner Recruitment Agencies), OPMs manage active affiliates, develop offers, monitor transactions and fraud, create promotions, create reports, establish PPC campaigns, run newsletters, program materials, or anything else.
Performance Marketing agencies focus on pay-per-action marketing channels and support a broader range of services than Affiliate Program Management agencies. In addition to Affiliate Marketing services, they often offer: Paid Search and Social, Display Advertising, Conversion Optimization, Content Marketing, and more.