As economic concerns pose new barriers to e-tailers’ growth in the region, brands are being tasked to do more with less.
Marketers in Asia Pacific, especially those representing e-commerce retail brands, have embraced affiliate and partner marketing channels as core components of a performance-minded marketing strategy.
But now, as economic concerns pose new barriers to e-tail growth in the region, brands are being tasked to do more with less—including in the affiliate and partner arenas.
The good news is that affiliate and partner marketing channels are already starting off on strong footing. As search and social channels have matured and their ad opportunities have become saturated, prices have increased while ROI has declined. Marketers have consequently turned their focus to affiliate and partner opportunities that offer room for continued cost-effective growth.
According to IAB Australia, 68% of publishers and advertisers involved in affiliate marketing think the channel will be more important in helping them achieve their business goals in 2023. Reflective of that, 57% of advertisers and agencies have increased their overall spend on affiliate and partnership marketing over the past year, and 55 percent intend to increase their spend in the coming year.
That said, economic headwinds persist. So, what can e-tailers do to make the most of their investments in their affiliate and partner programs? Let’s dig deeper.
Shift your mindset to broaden the opportunity.
For e-tail brands looking to increase the effectiveness of affiliate and partner programs in a tight economy, the first step is to reconsider how you’re thinking about and treating these programs within your broader marketing mix.
Oftentimes, affiliate marketing and partnerships don’t receive credit for the impressions or brand value they drive since these channels have been historically judged based on conversion performance. However, these programs do serve much greater roles within the marketing mix, and there are multiple ways of ensuring high-value partners are rewarded for their brand impressions and that their value within the customer journey is recognized. For example, the metric of earned media value (EMV) can be employed by marketers to measure the value of unpaid brand impressions on third-party content, including blogs, social media posts, and product reviews.
With a better appreciation of the full value of affiliate and partner efforts, brands can examine where it makes sense to redeploy media dollars that aren’t performing in other channels to partner efforts that are delivering a high return on ad spend (ROAS). In doing so, marketers should acknowledge that not all affiliate and partnership arrangements—which range from cashback sites to premium publishers to social media influencers—work the same way. These relationships should be approached in a flexible fashion, with different compensation models and commission rates designed to reward partners for the value and performance they truly deliver.
Reduce waste with the right tools and models
Despite the already-high ROAS of affiliate and partner efforts, e-tailers should evaluate their programs to see where additional efficiencies can be achieved. For example, partnership automation tool sets can create greater efficiencies by eliminating manual workflows and saving time and resources. In addition, more-sophisticated commissioning tool sets can enable greater control and eliminate wasted spend on underperforming partnerships.
Speaking of eliminating wasted ad spend, e-tailers that aren’t already might want to consider putting a brand monitoring process in place. This can prove to be a worthwhile investment because it helps marketers screen for cannibalization of their own paid search efforts by resellers, competitors, third parties, or affiliates. In other words, brand monitoring further reduces waste by helping ensure CPCs aren’t being driven up by other parties.
Hold spend accountable with the right metrics
Finally, proper investment in and optimization of affiliate and partner marketing efforts is contingent on proper measurement and attribution. According to IAB Australia, advertisers rate ROI and new customer acquisition as being the most important success metrics when it comes to evaluating affiliate marketing results. This makes sense—but it’s not the end of the story.
Of course, all the traditional metrics are important in affiliate marketing: traffic, revenue, conversion rates, average order values, and return on ad spend. These metrics help gauge short-term efficiency and ROI of affiliate and partnership channels. However, there are also KPIs that are worthy of regular review to gauge and assess long-term performance and impact. Specifically reviewing KPIs like customer lifetime value and profit margins can offer immense insight into the performance of your partners and overall program.
In a tight economy, affiliate and partner marketing are well-positioned to work even harder for e-tailers. Are your programs living up to their potential?
