January 7, 2020
Can Traditional Ad Agencies Handle Managing a Robust Affiliate Program?
Look, I’ve seen Mad Men. I know traditional advertising agencies have a lot to offer. Sure, the days of mid-day happy hours and extensive cigarette breaks may be gone, but they still employ brilliant creative talent and they have expertise in some of the more established and well-known advertising methods.
What they don’t do well and never have, however, is adapt to a world that’s currently going through the fourth industrial revolution – in the digital age – and a lot of these companies that have existed for decades haven’t caught up. Specifically, they haven’t developed the ability to track, monitor and optimize affiliate programs.
It’s important to acknowledge, of course, that certain larger advertising agencies have put in the effort to learn about affiliate marketing and in some cases utilize its capabilities with clients.
That being said, I am convinced no advertising agency not 100% focused on affiliate can garner the kind of results we achieve for our clients.
15% of the total digital media advertising revenue from the past year can be attributed to affiliate marketing (Business Insider). This number is growing too, and quickly. Annual affiliate marketing spending is projected to hit the $6.8 billion mark by this year. (Digital Global)
Once dismissed as trendy, insignificant, and as a simply much less compelling marketing method, affiliate is now starting to get attention from the big boys. And for a very good reason.
81% of marketers and 84% of publishers leverage the power of affiliate marketing (Web Market Support). With new emphasis on personalization and top of funnel advertising, it’s proven to be one of if not the most efficient method for capturing customer attention and engaging with existing customers, thus driving sales and generating revenue.
It seems ever since PayPal decided to acquire Honey, more mainstream attention has shifted towards our realm of marketing. What many of us who have been in the affiliate game have understood for a while is now becoming common knowledge.
PayPal’s $4billion acquisition of Honey was significant for a plethora of reasons.
“We’re thrilled to complete this transformative transaction and to welcome the Honey team to the PayPal family,” said Dan Schulman, president and CEO of PayPal. “The addition of Honey to our platform enables a significant step forward in our commitment to provide powerful services and tools for merchants and consumers, move beyond our core checkout proposition and significantly enhance the shopping experience for our 300 million consumers and merchants.”
The expertise people at Honey and other companies like it have and their knowledge about how customers “really” shop is really able to move the needle. PayPal, one of the most innovative platforms in the world, felt they could enhance their product by creating and implementing new touch points with end-consumers that can, in the end, create more revenue.
These large scale acquisitions are nothing new, either. Rakuten’s 2014 purchase of Ebates went for $1 billion, which marked a substantial amount paid for an affiliate at the time. There’s no doubt that this is a rapidly expanding space.
So back to the agencies… where we may lack in size and experience, we make up for in droves with our specialized approach to affiliate marketing. Our clients have come to realize we are easily accessible, super knowledgeable, and completely data oriented.
That dedication to data means that our KPI reports are usually filled with good news at the end of each month. What a larger agency might claim they know about affiliate is not the same as an agency that works with hundreds of clients on similar problems and finds solutions based on data that a big ad firm would never think of.
Without the relationships we’ve built over years with affiliate networks and the affiliates themselves, it’s difficult to dive into our space and be successful. 3.5% of affiliates create 90% of the revenue in the space. We have relationships with all of those affiliates as well as others that create revenue as well.
It’s one thing to offer an affiliate option, but it’s an entirely different thing to be able to push the pedal to the metal with a client’s affiliate program, squeezing out profits and creating brand awareness in the process. All with minimized risk and low upfront cost.
So, if you’re looking to enhance your brand and sell more products without spending absurd amounts of money, you’ve come to the right place. We’re looking forward to hearing from you.
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