Affiliate marketing is now a full-funnel channel staking a greater claim to marketing budgets across industries. Brands drawn to affiliate’s range of options for placements, position in the buying journey, and cost structures are finding more competition as the channel gains steam.

On the digital marketing scene, affiliate marketing is one of the elder statesmen; the practice of selling on third-party properties and cutting them a small slice of the benefits goes back decades. But for an older practice, affiliate is experiencing tons of growth. More and more brands are getting curious about this marketing channel and/or deciding to take the plunge and add it to their marketing portfolios. With this in mind, we’ve put together a primer that includes:

• Brands that should consider affiliate marketing
• The main players in the ecosystem
• The affiliate partner landscape
• How to approach affiliate partnerships
• Misconceptions about affiliate marketing
• Steps to get started

That’s a lot of ground to cover, so let’s get moving.

What kinds of brands should consider using affiliate marketing?

Affiliate marketing is a good fit for brands in most any vertical/industry. That said, having a base of brand awareness is important in getting partners to work with you. A pre-existing ecommerce presence and investment in other marketing channels are also crucial to success in affiliate marketing. From there, an affiliate program can be tailored to fit the brand’s needs, using KPIs (which we’ll touch on in a bit) identified by the brand to guide the structure of the program.

Affiliate marketing’s flexibility makes it a fit for most brands. It can drive growth in the form of revenue, new-to-file customers, leads, and more. This marketing channel offers brands the opportunity to market their offerings while only paying for the desired outcome, which is what makes it unique in the marketing world.

Affiliate marketing programs should not be managed with a one-size-fits all approach, but rather carefully planned and tested with the brand’s unique goals in mind to achieve optimal outcomes for both the brand and partners.

Who are the main players in affiliate marketing, and what are their roles?

The affiliate marketing landscape is a relatively fragmented one compared with other online channels. This creates high demand for parties like agencies and affiliate technology partners with experience navigating the landscape and with pre-built connections to help brands gain immediate traction.

The main players include:

• Brands
  • This is where it all starts: the entities selling products or services.
• Affiliates/Partners/Publishers
  • Essentially, these are external people or online properties who promote your brand and products – there’s a huge range we’ll explain in the next section.
• Technology partners
  • These break into two main segments: SaaS partners, like Impact, which help brands organize and automate tracking, reporting, and payments across a network of affiliates, and technology networks, like Impact and ShareASale, which help connect brands with affiliates and offer either full-service or self-service affiliate program management.
• Affiliate agencies
  • Along with helping plug brands into their existing network of partners, agencies can help brands secure exclusive placements and beta tests, secure lower placement and technology costs thanks to economy of scale, and build valuable brand-to-brand partnerships within their portfolio. Multi-channel agencies like DMi Partners can also provide objective analysis on incremental value in a holistic marketing strategy.
• Customers
  • These are the end users who make purchases.

What types of affiliate marketing partners are there, and how does each drive growth?

The sheer variety of affiliate partners makes it tough for brands to build a strategy from scratch. The landscape of partners includes:

• Content: Affiliate content partners work to feature brands in sponsored posts, round ups, gift guides, blog posts, reviews, and more. Content provides the opportunity to tell a brand or product’s story in a way that most other affiliate partners cannot. They can be good for not only driving revenue but also building brand awareness and helping you get visibility on SERPs for high-intent keywords that your potential customers are searching. For many brands, the pinnacle of content options is mass media, or highly recognizable publications/media companies (think: The New York Times, Cnet, etc.) that have a highly engaged audience built on trust due to their name/reputation.
• Email/Newsletter: This partner type sends targeted emails/newsletters to high-intent consumers promoting the brand and/or product. Often, emails and newsletters are connected to larger content sites/blogs, but there are standalone partners who own email lists and can target specific audience types.
• Loyalty/Rewards: These are often cashback sites like Rakuten and Honey but can also take the form of airline miles, points, charity contributions, and more. These sites often have a highly engaged consumer base, and many have recently added browser extensions.
• Coupon: These sites feature the brand’s current promos/discounts and drive high-intent traffic to the brand’s site, increasing conversions.
• Deal: Similar to Coupon, deal sites promote the brand’s sitewide and/or product offers, but often do so via content, imagery, and more.
• Influencers/influencer networks: Brands can work with influencer networks to save time and effort while reaching a vast array of influencers to promote their products. For a more targeted approach, they can also work one-on-one with influencers who are a good match for their target audience and have a strong following. Influencers provide a unique version of word-of-mouth marketing founded on trust and authenticity.
• Card-Linked Offers (CLO): These partners have the unique ability to provide targeted offers to consumers based on data collected from previous spending on credit cards. This is a newer but fast-growing partner type that provides brands with a wealth of data and insights on their highest-value users.
• Buy Now Pay Later: This type of partner provides alternative payment options and allows brands to engage new and repeat customers through content, newsletters, loyalty programs, and more.
• Lead Gen: This type of partner focuses on generating leads rather than sales, often via application, form, email sign-up, etc. B2B brands have the potential for tremendous growth using lead gen affiliate partners.
• Search/TM+: Publishers who bid on TM+ (trademark plus) terms or non-branded keywords to drive traffic to the brand’s website and/or get the brand listed at a high rank in the Google SERPs.
• Affinity/Closed User Groups: These partners target audiences like seniors, students, military, and more through closed groups that provide discounts available only to members of the group. They often require an exclusive discount to differentiate their offerings from others more broadly available online.
• Mobile publisher partners: This group of publishers includes more traditional affiliate partners with mobile apps, mobile networks, and mobile measurement and attribution providers.

How should brands approach different kinds of affiliate partnerships?

Most successful affiliate marketing programs include a healthy blend of all partner types (excluding any that don’t align with their identified KPI goals – for example, if you’re not focused on driving leads, you can cross lead gen partners off the list). It’s important to partner with traditional, longstanding affiliate partners because they have a trusting, well-established audience and proven success at driving conversions. (It also allows brands to build share of voice, as many/most of their competitors are also working with those partners.)

In our experience, successful programs will also layer in niche partners who focus on their area of expertise and new-to-market publishers that are up-and-coming and often innovative and different from any other partners in the space. This is a big advantage of working with agencies, who keep a close eye on the landscape and make a point of testing new publishers as they emerge.

In general, we recommend investing spend in the partners that most closely align with the brand’s goals. For example, if that’s brand awareness, content should be a focus. If it’s high-quality leads, lead gen should get a heavier investment. If it’s clearing out last season’s inventory, deal sites are a great way to go.

What are some misconceptions about Affiliate marketing?

The biggest, most persistent misconception about affiliate marketing is that it’s not incremental; it’s just a bunch of coupon and deal partners that eat into margin without adding much value. The truth is that we regularly see affiliate drive discovery and new-to-file user acquisition thanks to the range of partner types outlined above, and it regularly ranks among our clients’ top traffic drivers. We like to call affiliate marketing “the channel of channels” because, managed effectively, it can augment the performance of every active marketing channel.

The second big misconception I see with affiliate is that you can set it and forget it. This couldn’t be further from the truth; unmanaged programs don’t grow by themselves, and in fact, a neglected affiliate program can lead to financial losses and undo the months of hard work that went into getting it established. Not only is it critical to closely monitor your affiliate program for fraud and ensure timely payments to partners, but it’s also important to consistently re-assess and update your strategy, recruit new partners into the program, activate/re-activate dormant partners, and update marketing collateral (banners, text links, etc).

A successful affiliate marketing program requires dedicated and consistent management, whether it comes from in-house or an agency. For instance, over the past year or so, we’ve seen a huge uptick in interest around Amazon affiliate (where affiliate’s levers are used to bring users to a brand’s Amazon listings), so we’ve launched an affiliate service to help clients grow revenue on Amazon. This kind of initiative depends on knowledge of the industry landscape and willingness to test new options as they emerge.

If you’re a brand interested in testing affiliate marketing, what are the steps to get started?

Affiliate’s range means it can accommodate the goals of just about any brand, whether those are market share, brand awareness, conversions within tight ROAS goals, or increasing LTV of existing customers.

Given that, the first step to building a good affiliate program is developing a clear understanding of what defines success for a brand. Based on this, you can now partner with affiliates that are best equipped to support your goals. It is also important to vet potential partners based on how you feel they will represent your brand. (Remember: once you establish a partnership, they become an extension of your brand.) Ensure your partners align with your brand values and how you prefer to be represented.

Keep in mind that it can take approximately three months to establish and ramp up an affiliate marketing program (which can include getting set up on a network, identifying and recruiting partners, getting offers live, etc.). One big tip: we don’t recommend kicking off this initiative in Q4, when partner rates typically increase, recruitment slows down considerably, and codes freezes often go into effect.

I know that’s a lot to digest, so I’ll leave you with the most important lesson in affiliate: whether it’s publishers, agencies, or networks, make sure you’re choosing partners who will work in the absolute best interests of your brand. In a complex landscape, true partnerships are a necessity for reliable growth and performance over the long term – especially because they’ll work to protect your brand integrity along the way. And remember, if you have any questions we can help answer on your affiliate journey, we’re always happy to talk shop!