affiliate marketing: The Lowdown
In affiliate marketing, publishers promote a brand’s products or services, and receive commission for the sales or leads they generate. It is a mutually beneficial, performance-based partnership model.
How it works: Publishers join an advertiser’s affiliate programme, either directly or through an affiliate network (or a software as a service (SaaS) platform), to gain access to unique tracking links and creative assets.
They then use these assets to promote the brand, usually on their website or other online platforms, though offline promotion is also possible.
Whenever a user clicks a publisher’s link and completes an action, like making a purchase or signing up for a service, the publisher earns commission.
This is either a cost-per-action (CPA), which can either be a percentage of revenue or a fixed sum, or a cost-per-lead (CPL). Fixed fee payments (tenancies) are also common, as well as cost-per-click (CPC) deals with relevant publishers.
The network or SaaS platform handles tracking, reporting, contracts and attribution, as well as managing the whole payment process, and more. SYYCO currently manages programmes on Awin, CJ, impact.com, Webgains, Tradedoubler, Rakuten and Affiliate Future.
Benefits of Affiliate Marketing
- Affiliates can generate over 15% of a brand’s total ecommerce revenue
- There is no upfront media cost, only commissions on results
- ROI and ROAS are strong, since commission payouts are tied to performance
- Brands can expand their reach by leveraging publishers’ audiences and content
- Publishers with relevant audiences can quickly monetise their platforms
- New innovations often launch first in the affiliate space, making it a vital testing ground for brands
Who are affiliate publishers?
Literally anyone can be an affiliate publisher, but driving meaningful revenue is another matter altogether. There are many “get rich quick” schemes which paint affiliate marketing as an easy way to earn passive income, but in reality, it is nothing of the sort.
These are the top-performing affiliate publisher business models over the last decade:
Cashback and Loyalty: Also known as Incentive sites, these publishers pass some (or all) their commission back to the end-user in the form of cashback, points or other rewards.
Voucher Codes: Also known as coupon sites in the USA, these publishers list voucher codes, or other offers, to drive traffic and revenue for advertisers.
Closed User Groups: E.g. employee benefits portals / key worker discount sites. These publishers usually offer incentives and / or exclusive discounts – but only to registered or verified users.
Content Sites & Blogs: Content has long been a focus area for advertisers. These publishers attract engaged, targeted audiences who are receptive to recommendations.
Communities and User Generated Content (UGC): These publishers can be very effective revenue drivers and their users have a high degree of loyalty. But advertisers are not in control of how the offers are presented or shared.
Email Marketing: Email remains a high-converting model, especially in CPL campaigns. Bespoke HTML creative is required and only strong offers to relevant data sets will deliver results.
Price Comparison: Also known as comparison shopping engines (CSEs), these publishers have long played an important role in affiliate marketing. Their market share has been eroded in recent years by the popularity of Google Shopping, but they can still be valuable partners for retailers with product feeds – especially through their high-potential content partners.
Paid Search (PPC): This was once one of the leading publisher models in affiliate marketing. Over the years, it’s become rarer for brands to include branded paid search in their affiliate programmes, but in certain instances it can still be very successful. E.g. when a brand is unable to manage their own Google Ads account or when selected publishers are permitted to bid on a limited range of branded keywords.
Affiliate or Partnership Marketing?
As affiliate marketing has matured, its pool of active publishers has continued to grow and diversify. With these new types of publisher entering the space, it’s widely felt by many that affiliate marketing is now part of a wider eco-system: “Partnership Marketing”.
Here are some of the emerging partner models that are boosting the bottom line for our clients here at SYYCO:
Brand-to Brand-Partnerships: Partnerships between high-affinity brands are a fantastic way to build trust, reach new audiences and drive incremental revenue. Over 1,000 brands are already active in the space in the UK alone. Advertisers can either promote their own products or services through their brand partners, or market another brand’s offering as a value-add for their own customers. Reciprocal partnerships are also possible, as is the hassle-free creation of a rewards platform through our technology partners.
Influencers:Influencer Marketing exploded in popularity thanks to the rise of Instagram and YouTube and shows no sign of slowing down. Many micro and nano influencers now look to monetise their content by joining affiliate programmes – seeing a lot of success along the way. SYYCO has made great strides in this area, with our Performance Influencer Partnerships moving focus away from vanity metrics, and squarely onto incremental revenue.
Commerce Content/Media Houses: Most newspapers and popular magazines now see partnership marketing as a vital revenue stream. While this isn’t new, it has quickly accelerated since 2020, contributing hugely to the brands they partner with. SYYCO has excellent connections with all the main commerce content publishers and can help your brand unlock exciting opportunities by partnering with them.
Google Shopping Partners (CSS): Partnership marketing has massively benefitted from Google Shopping being opened up to third-party comparison services. Now, any retailer in Europe with an affiliate programme and a product feed can earn additional incremental revenue through Google Shopping. Better still, when you work with a CSS partner, they receive a 20% discount from Google on every click, allowing them to put more resources into your campaign. You, of course, only pay them on a CPA – meaning they take all the risk.
Technology Partners: Retargeting and on-site conversion publishers have been around for over a decade. But there are so many more options now open to brands. E.g. P2P recommendation platforms, AI chatbots, AI product bundling, user verification, smart offers platforms, shoppable creator content, and more. These cutting-edge technologies are often available fee-free and contract free, without having to make any site changes (thanks to platform master-tags).
Apps: Mobile apps now play an important role in many affiliate programmes, with buy-now-pay-later (BNPL) platforms being amongst the most effective revenue drivers. Let’s also not forget browser extension publishers, which can be useful partners in certain scenarios.
Card-Linked-Offers: These publishers offer cashback and rewards that are linked to users’ bank cards/accounts, rather than relying on traditional affiliate tracking. With massive audiences and excellent targeting abilities, they are not to be overlooked.