“Intelligence is the ability to adapt to change.” – Steven Hawking
The last several years have posed extremely challenging circumstances for everyone. Consumers and businesses have faced a series of unforeseen curveballs ranging from a global pandemic, lockdown regulations, supply chain issues, a regional war and accompanying sanctions, not to mention a cost-of-living crisis at a time of extreme inflation.
With so many uncontrollable macro factors at play, the success of a business right now is largely down to its ability to adapt to these turbulent times. Change doesn’t have to be scary though. For the most agile companies, from giant corporations to rising entrepreneurs, these shifting sands have been an opportunity to grow at the expense of their slower moving competitors.
And with the affiliate channel witnessing an explosion in partner types over the course of the last couple of years, covering every conceivable online media touchpoint, advertisers can use the channel in a highly adaptive manner. Today’s affiliate industry represents a galaxy of marketing options that can hit any range of KPIs, from brand awareness to new customer acquisition.
Combined with its heritage as a low-risk ad model where spend is tied to tangible outcomes like sales and revenue, and where the ROI returns are consistently high, it’s easy to see why advertisers have turned to affiliate partnerships in these difficult circumstances.
But to make the most of this new choice of options, a proactive and experimental approach is required. Advertisers that actively diversify their publisher base in the current climate are the most likely to see incremental growth. Those that are complacent, and who rely on just a small, unvaried programme of partners for growth are unlikely to see it in the long term, and risk becoming over-reliant on them.
Don’t just take our word for it though. We grouped a selection of current Awin advertisers into two distinct categories that aligned with these two approaches to illustrate the distinct difference in outcomes.
Awin works with thousands of brands, of many sizes, across every sector. Taking a sample group of large brands with defined strategies, we analysed two approaches to managing an affiliate programme.
Group 1 – Armchair Advertisers: The first group of brands has a very passive marketing approach, focused on a couple of core partner types, and running a traditional programme strategy without room or budget for testing or trying more varied partnerships.
Group 2 – Ambitious Advertisers: The second group of brands strive for a diverse programme mix, with set budgets available for adapting to market changes, and regularly welcome new partner types on board to support this strategy.
When comparing both groups year-on-year Armchair Advertisers saw a 6% decrease in traffic mostly impacted by traffic drops from core publisher types, including discount (-8%), loyalty (-9%) and cashback (-29%).
Ambitious Advertisers however, benefited from audience diversity through their varied partner mix and saw traffic increase 29% for the same period. This growth was driven by a variety of the less conventional partners welcomed to the affiliate channel in more recent years, including SEM affiliates seeing 162% traffic growth on the previous year and CSS partners up 76%.
Traffic increases don’t necessarily equate to valuable business growth though. However, looking at sales performance year-on-year presents a similar picture. Armchair Advertiser programmes saw a credible 16% increase in sales, but Ambitious Advertisers still exceeded this seeing an impressive 33% sales increase. Again, a mix of newer affiliate types were responsible for this significant sales growth. SEM partners were up +217%, influencers +73% and CSS partners +58% YoY.
Increase in average order spend is another common KPI for an effective affiliate programme. Armchair Advertisers witnessed a 2% growth in AOV over the last 12 months, whereas Ambitious Advertisers saw a 9% increase in AOV through the different partner types that they could leverage.
Delving deeper into this disparity, we tracked a significant 12% drop in AOV from just one partner type which impacted growth for Armchair Advertisers who were reliant on this type of affiliate for driving almost half of their sales performance. Despite working with the same partner type themselves, Ambitious Advertisers were insulated from this sudden decline thanks to the range of other partner types they worked with.
Sharp-eyed readers will note the one metric Armchair Advertisers won out by in comparison to Ambitious Advertisers was on conversion rates. This is not totally unexpected though. Traffic volumes, as we’ve already established, were significantly higher for the latter group. The diverse nature of their programmes means their programmes influence customer journeys across a much wider segment of the marketing funnel, further from the traditional conversion spaces which last-click attribution metrics focus on.
While this means their average conversion rates were lower (though a close-to-5% conversion rate is still strong), it also means that their partners are likely reaching customers at much earlier phases in their shopping journey. These are by no means wasted interactions. Instead, they can help drive vital brand awareness goals for Ambitious Advertisers, keeping their brand in mind when that shopper does eventually decide to buy.
So, we’ve outlined the benefits of building a more diverse affiliate programme across a variety of important business goals. But who are these emerging partnership types helping our Ambitious Advertisers?
Influencer marketing is becoming an integral part of brand affiliate marketing strategy. We are increasingly seeing separate budget pots, KPIs, and success measures for them. In fact, over the past two years we have seen content creators and influencers go from driving 5% to 8% of all network traffic. The number of influencers actively driving sales has also increased 8% over this time period, with 112,095 sales-driving influencers live on the Awin platform in 2022.
Feel Unique partnered with Sellers Alley via Awin to diversify its existing influencer activity outside of established social platforms to hit a new audience on TikTok. Using a test budget and focusing on UGC-inspired ads, this activation saw search volumes grow 27%, new user engagement up 84%, and delivered 15k sessions on TikTok. Feel Unique impressions reached far beyond the TikTok community with brand followers growing across multiple social platforms too, and increased searches on site for products featured in the TikTok campaign.
In 2017, Google Shopping welcomed third-party CSS providers into their shopping ad auction. Whilst CSS isn’t necessarily brand new to the overall marketing mix, we are increasingly seeing brands wanting to partner with one or more CSS partner via their affiliate programme, allowing for quick campaign testing, running on risk-free CPA-based commercials, and aligned tracking and measurement alongside other partner types.
Awin has highlighted CSS growth over the last few years, and these partner types have proved no exception in 2022. In 2020, Awin tracked performance through 20 different CSS partners, however in 2022 we now have 304 different partners active in this space driving sales for brands. Investment in CSS partners from brands has increased 57% and CSS partners are now responsible for driving 4% of total network sales.
Technology partners are an exciting way to diversify your programme, but it’s also worth noting the amount of diversity within the umbrella term ‘technology partners’. There are 109 technology partners live on Awin, and a different partner available to meet every objective. If, like many retailers at the moment, the current cost-of-living crisis is impacting the number of items consumers are purchasing per shop, an on-site bundling partner such as Increasingly or Particular Audience might be the partner of choice to support you in boosting this goal. Or, if your business changes tack on what stock to shift and when, a partner such as RevLifter focused on personalised offers, or intent.ly’s on-site overlay technology might be the best choice to interact with consumers during their shopping journey and incentivise specific purchase decisions. Technology partners allow you to accelerate your own in-house innovation, removing traditional martech barriers around allocating development resource and costs. Year-to-date, our technology partners have driven over £160m in sales revenue for our brands globally.
Another impressive recent partner success story at Awin has been that of brand-to-brand partnerships. Advertisers are increasingly partnering with complementary, non-competing brands to reach a potential new audience with similar values. Brands can co-promote each other and enter a reciprocal partnership, or follow a more traditional affiliate partnership model with one promoting the other.
So far this year, Awin UK has tracked over 450 active brand partnerships driving £1.7 million in revenue.
Awin have also launched partnerships with two providers who specialise in creating bespoke reward portals that brands can feature on their own sites. These offer a seamless, quick and effective white-label solution to fast-track your own customer reward space on your e-commerce site, further enhancing your offering.
One of the pioneers in the brand partnerships space was the dining card membership brand Tastecard. They saw their whole business model come to a halt at the height of the pandemic lockdown, but swiftly pivoted their business model and worked with Awin to create brand partnerships that would continue to offer their members incredible benefits while restaurants were closed. By promoting other brand offers to the Tastecard audience they were able to maintain customer loyalty and drive a completely new revenue stream for the business which has since become an established part of their offering.
Insights like those we’ve outlined above have helped to inform our own strategic direction at Awin. Understanding that diversification and a proactive approach to establishing new partnerships is vital to continued growth is why we’ve developed a new North Star metric that guides our own priorities and goals as a business.
Awin’s North Star metric is simple; to increase the number of active partnerships tracked through the platform each month. This benefits brands and partners alike, offering continued opportunities for growth and empowering brands and affiliates the choice to enter different partnerships, ensuring their performance goals are achieved and limiting the risks involved from relying on fewer partnerships.
If you are interested in diversifying your partner mix, testing new partnerships, or want to hear more of our case studies, please do attend our session on the mainstage at PI Live at 2.50pm on Tuesday with Awin’s Chief Customer Officer David Lloyd, or reach out directly to Jo***********@aw**.com.
And to explore the diverse array of partners you can work with via Awin, check out our Power 100 in this year’s Awin Report 2022 – our selection of the 100 most innovative and influential affiliate partners on our global platform.
Joelle joined Awin in 2010, 11 years (and a baby!) later she has experience across Publisher Services and Client Services culminating as Head of Key Account Management. As Client Partner Joelle is focused on developing senior strategic relationships across the retail and travel landscape and leading Awin’s sector strategies.
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