A Year for Huge Optimism in Affiliate
"That's a wrap" as they say on PI Live Global for 2021. Again it was a virtual conference which brought together some excellent speakers with amazing insights. Most importantly it fired the imagination for where the performance marketing sector is headed.
PI Live was virtual again this year like so many other industry events. The format running 3-4 hours across three days was clever in that it enabled most attendees to fit the sessions into their usual working day.
Headline speakers included leading names in our industry, Adam Ross of Awin, Florian Granshammer of Impact and Sean Sewell of Partnerize. These were supported by a very strong cast of key industry figures across the world of performance marketing and ecommerce.
Florian spoke about how big tech and ad tech is cannibalising the world of digital advertising. He covered his background in mainstream affiliate marketing and then his time in programmatic. He argued that his experience, prior to his move to the partnerships at Impact, gives him a unique view to share his views on the claim that “affiliate marketing is dead”, as the Impact publication put it a few years ago.
Partnerships is a key growth area of the performance marketing industry and one of the most important drivers for creating successful partnerships is through technology. In his view Impact’s own trajectory of acquiring tech such as Trackanomics and Affluent as part of their technology cloud ensures that agencies can manage their partnership relationships even more effectively.
Sean Sewell of Partnerize spoke on justifying the business case for partnerships to gain buy-in from the C-Suite. This area of business is something that during the last year has grown enormously, as many brands shifted focus away from other ad spend into performance based models.
Sean covered how effective partnerships help in reducing acquisition costs and that maintaining margin should drive your partnership strategy. He argued that the increased use of technology and automation in partnerships helps reduce costs and align with overall business goals.
There has been an inertia among the C-suite largely because of a lack of understanding of partnerships. That may be a result of course of the difficulties from this industry being variously known as 'partner', 'performance' and 'affiliate' marketing; all of which are relevant to the differing styles of publisher activities. Education is key in ensuring that it is understood throughout the business.
The gold standard in any activity is the ability to drive revenue. Partnerships are doing just that, and as a sector it is now being cited by 20% of respondents to the recent Pepperjam survey as one of their top 3 revenue drivers. The recent Forester survey that Sean quoted also reported similar numbers. Partnership marketing really has come of age and really should be embraced by senior marketers.
He gave 5 key takeaways to enable the successful implementation of a partner marketing strategy:
- cultivate channel expertise
- define success - establish KPIs and goals
- integrate partnerships into your reporting 'source of truth'
- let data be the guide to your spend strategies
- educate key stakeholders in the channel fundamentals
Hard data proves the value of partnership marketing in whatever form, so this must be embraced throughout the organisation.
Listen to the full session for the whole argument - and access all the others in the replays below.
The Affiliate Mix
Recent focus in many of the affiliate focused blogs and podcasts has been on content publishers and Influencers. Certainly the past year has seen a big shift for many of them towards affiliate model. Partnerize and Awin reported a huge influx of content affiliates to their programmes, especially for fashion brands.
There were several sessions over the three days looking at this and other aspects of the affiliate mix.
Rachel Lamberts of Office Depot/Viking and Kristian Libetta tackled that old question - whether coupon publishers were a curse or a blessing!
The huge shift from office based users to home office has meant a reassessment of their digital channels. At Office Depot/Viking, coupon affiliates are seen as adding value to the programme if managed in the right way.
They can attract new customers via coupons - as well as using coupons to drive increased basket value. These do need to be managed very effectively; there are instances of affiliate fraud through ad-hijacking and brand bidding. But that is very small and most affiliates do follow the rules. Office Depot use technology to manage this and have made significant savings by effective monitoring.
Rachel stressed that it is important to maintain open communication with affiliates, particularly at key traffic times. Make sure you are watching the activity and that the numbers make sense.
In another session, Jake Newbould and Rachel Said shared their experiences during the first ever launch of the Piglet in Bed affiliate programme. After a year of strong growth, Jake added affiliate into their marketing mix in order to gain better coverage in the USA.
He wanted to use affiliates to communicate all aspects of the brand to US audiences, using different types of partner to cover different areas. It was important to assess the value from each and measure results beyond ROI and the last click that you see in Google Analytics.
It was important to look at the content, incentive and shopping partners to assess their differences. He looked at metrics such as cost per visit to gauge traffic efficiencies against their existing social selling.
It's an ongoing process to manage the traffic and understand how all these affiliates impact the program. It's important to cover all the bases with the variety of affiliates - the data has been telling the stories and letting Piglet access all of their target demographics.
Overall affiliate added huge value because of the unique and diverse reach the channel has to offer. It really helped 'deliver the ideal customer' for Piglet as the session title stated.
The excellent panel session led by Jim Nichol on 'Enhancing ROI with Intelligent Promotions and Deals' looked at how deals and incentives are important drivers of revenue and growth. He stressed that ensuring profitability represents a constant challenge.
Eilidh Whyte of AO explained how they work closely with their commercial team to cost out all the offers, promocodes and activity to ensure a positive ROI. Once it's all agreed internally, the AM team can then focus on maximising the promotion.
Amy Hadley said that they are seeing this data-led approach across more of the brands that Awin work with, by looking at the value of each transaction. The addition of technology partners like Revlifter are adding a lot more richness to the channel - and to the sales conversion funnel with effective attribution modelling across all partners.
By zooming out from last click, Acceleration can assess that Coupon partners are very much influencing consumers in their decisions. Over the last holiday season. In fact 69% of US consumers used a coupon to make a decision to purchase.
Later on, her colleague Stephanie Lester led a session on how to run a global affiliate programme. Many brands (like Piglet in Bed and Master of Malt) are building their presence into other territories.
How this is managed is not always as straightforward as it may seem. There are always nuances across different regions and markets which need to be allowed for.
Nuances across markets can be as varied as the obvious different key retail highpoints to the rollout of credit card usage. In S America that can be very low; in Mexico and Brazil, online purchases happen by boleto or bank transfer.
As well as hardcore affiliate management advice, there were some great sessions with powerful advice from some of the leading names in ecommerce.
PI Live’s quote of the day from Michelle Corp of Lily’s Kitchen was, “It’s really about recognising and understanding the way customers want to shop, and as a brand it’s about setting your affiliate programme up to align with those methods in a way that meets your business goals”.
We heard a very different discussion from James Coggles of Dealmoon and Carolina Paradas of Harvey Nichols. They shared how they had been working together to understand the buying habits of the Chinese millenial consumer.
Data and insights from the analytics were key in building a fuller picture of purchasing decisions. That helped them to gain a better understanding of one of the most valuable shopping groups in the world!
Huge Optimism in Performance Marketing
Adam Ross led day three and gave a ranging view of how affiliate marketing has had a year of change and enormous growth in performance marketing industries. He shared his optimism for the future of affiliate marketing and that the future is very bright for the industry. After 16 years in affiliates, he’s never seen such optimism and opportunity.
He outlined how the ‘Big Five’ walled gardens had grown 10% over the last year while advertising generally contracted by 9%. Affiliate marketing bucked this trend - and matched the big 5 with a 10% growth, as smaller ecommerce businesses embraced the affiliate channel to grow at unprecedented levels.
The amazing stat from Adam was that 40 new SME programs were launching every day on Awin during 2020.
Coupled with that there was a rush of publisher signups to Awin as Amazon slashed their publisher commissions. That’s something reported by other networks and SaaS platforms and that growth has continued through 2021.
Major publishers were hugely affected by the effect of covid globally. Where brands pulled or scaled back programmatic advertising, most publishers and especially those more digitally developed had strengthened their revenues from performance models. Future publishing over 4 years has cut Amazon commission from 51% of revenue to just 30%. Conversely revenues via Awin merchants increased 80% in 2020.
The global micro SME market is vast and untapped - there are 23 million SMEs in Europe (representing 93% of all businesses). The IAB says they constitute 45% of all spend on digital advertising - and only 14% work with affiliates. For many of these, flexible contracts are crucial for smaller businesses to allow for flexibility.
That picture has been echoed elsewhere, with new SME offerings from Tradedoubler and others to tap into this growing market.
The Human Touch
Day three closed off with a great panel led by Sarah Bundy on the value of the human touch in ‘value-led’ partnerships. Sarah looked back over 10+ years, and asked what it was about the human connection coupled with tech that made affiliate ‘work’ still - and how it has changed since then.
It was agreed that we were all missing the live shows and actually meeting up to talk over business. In spite of the global reach of affiliate, this is still a relatively small industry and anyway, people buy from people.
Rich Lane shared that even now - after 15 years in affiliate marketing, there’s still the need to go for a coffee (now that we can) and have a chat to talk about affiliate. It’s not the same in programmatic where you ring and book a few million impressions - affiliate marketing is based on trust - and the interpersonal relationships are key to successful partnerships.
Luke Judge wrapped up the conference on the Thursday afternoon, with a quick summary of the sessions - and letting everyone know about the real LIVE (and online) PI Live coming later this year in October.
Where from here?
Based on the power and development of affiliate marketing, as Adam covered in his session, we are in a good place for the future. Kunal Patel made a good point that as agencies have scaled and grown through M&As, coupled with the development of tech and automation, personal relationships are still key.
Retail as a sector is going through a period of huge change and as Adam Ross shared from a recent McKinsey survey “Only 12% of consumers said they would buy from the same retailers as they did in 2019. Never has the optimisation of the consumer journey been more important in creating a positive consumer experience."
With larger organisations, it is important not just to have one to one relationships, it’s about building closer working relationships across wider teams, so the business relationships are broader based. It is still an industry built on trust - and those relationships are what makes it all work.
Watch the Sessions Over Again
There was such a lot of powerful content being shared that I for one found it hard to keep up with some of the detail. The Video Vault is a really valuable resource, so make sure you login.
If you didn't have a conference ticket, you can still access the recorded sessions for just £12.95 per session.
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