Impact.com's Playbook for Affiliate Marketing Dominance in 202
In the fast-paced world of digital marketing, the winds of change are blowing stronger
than ever, and one trend that's been catching everyone's attention is the unstoppable rise of affiliate marketing. To shed light on this phenomenon, we had the pleasure of chatting with the brilliant Max Ciccotosto, the Chief Product Officer of impact.com, the go-to platform for affiliate marketing.
With his finger on the pulse of the industry, Max shared some enlightening
insights on how brands can stay ahead of the game in 2023. He emphasized the importance of optimizing affiliate marketing channels and skillfully navigating the convergence of affiliate and influencer marketing. It's a dynamic dance of strategy and innovation that requires brands to tap into the power of both these worlds, leveraging the trust and reach of influential individuals while harnessing the performance-driven nature of affiliate marketing. So, in this exciting era of possibilities, let us embrace the synergistic marriage of affiliate and influencer marketing and prepare to witness a new era of marketing brilliance. The future is here, and the opportunities are limitless for those who dare to adapt and conquer the ever-evolving landscape of affiliate marketing.
How do you optimize the affiliate channel and do more with it?
It’s important that brands start with the basics. Before they start optimizing their affiliate channel, they
need to understand what their goals are. Only then can they start aligning those goals with a solid optimization strategy. Let’s say you’re optimizing for growth. If you want to grow your user base, you’ll probably want to increase the number of partners that drive new users (we refer to them as introducers) or incentivize lower-funnel partners to give you more exposure to new
consumers. On the other hand, if you are looking at improving your ROAS, you will need to take a different approach, for instance considering different payment rates. This may lead to a drop in top-line revenue growth while these partnerships are established and new customers are acquired. If the goals are different, the metrics for optimizing the affiliate channel will be different as well. For instance, for one brand, optimization could mean achieving higher ROI. But for another brand, it might refer to optimizing against cost, or even the incrementality of the channel, so you’re only paying for incremental lift. Once you have those metrics in place,
you need to look at your data. Data is the key to understanding what’s going on in your business, and you need to have multiple lenses to answer questions such as: how much traffic are these affiliates and other partnership types bringing in? Are they introducing new customers? Are they closing or do they get stuck in the conversion funnel? Are they consistently in one place or another? An
additional step I see many brands forgetting is to actually speak to their partners, cover their goals, be open with the metrics and analytics they are seeing from their data, and ask whether changes can be made to re-align with their priorities. All-too often, I see one-sided decisions that might help in the short term, but damage relationships in the mid-long term. We call them partnerships for a reason. You mention brands needing ‘multiple lenses’ into their business - what do you mean by that? Brands often use one attribution model. There are pros and cons to any model, but by looking at any one in isolation, you are getting a single-lens view. The issue with this approach is that you are not getting a complete picture of your potential customers. I have always liked to compare and contrast different models to get a better understanding of how different partners contribute to the totality of the program. Some models will highlight partners that are disproportionately represented by first-touch attribution, other models will focus on the value of closer partners, or those that assist a sale. In reality, all
partners contribute differently; so some might drive higher AOV, while some might drive a higher conversion rate. It’s important to be able to attribute their value accurately and align these values with the compensation they should receive. So in other words, delving into the analytics of your flow of traffic - but also layering in attribution - will help you understand your affiliate
channel’s performance, as well as the kind of compensation they should be receiving in return - or whether you need to invest elsewhere. The better the visibility, the more adjustments you can make. So this layering helps you build a bigger picture of your affiliate campaigns? Yes. Armed with that data, you can make smarter investment decisions and decide whether to opt for more placements or sponsorships, or whether you need to invest less in a specific partner. Using the right tools, you can make these adjustments weekly, monthly, or quarterly - although the longer you measure the campaign, the better the overall picture of performance. I
have always stressed that the priority should be the health of the entire program as a whole and not necessarily over-optimizing specific partners because of a specific dogmatic point of view. It’s a bit like a team sport - you want the team to win, and so you focus on maximizing each player’s strength. There’s been a lot of talk around affiliate and influencer marketing merging to form a
powerhouse in 2023. Do you see this at impact.com? Definitely. It’s so important for brands to prove that their partnership channels do, in fact, generate revenue; otherwise how else are they going to optimize their strategies properly or know where to invest? The rise of influencers and
creators in the affiliate channel has accelerated the growth in affiliate programs, with total industry spend in the USA reaching $9.1 billion in 2021, and interest in the channel rising by more than 264% in 2022. Platforms such as TikTok, Instagram and YouTube are helping to facilitate the expansion of influencer marketing efforts, especially since 2020, when the pandemic drove a 12.3% increase in active social media users. Fast forward to 2023 and the global affiliate marketing industry is set
to grow to approximately $14.3 billion in 2023 (and $15.7 billion by 2024). By merging their existing partnership channels with affiliate, brands will be able to get a clearer picture of performance - what’s working, what’s not, and what can be improved. Through this intertwining of the
channels in 2023, affiliate teams will start to take on a larger role within the ecosystem of a brand as they grow into extended partnership teams. By leveraging their teams in this way - and expanding their partnership programs - brands will find it easier to reach new customers across the funnel - from interest and awareness right through to sales, sign-ups and subscriptions. |
All the news you need today, in a format that isn't TL:DR, summarized for the busy executive.
BuzzFeed is launching a new online retail site for its lifestyle brand Goodful in collaboration with the luxury e-commerce site Verishop. This move marks BuzzFeed's first combination of licensed and curated goods under one brand while offering a universal checkout experience. The standalone site is set to
attract direct user traffic and provide access to valuable transaction-related user data.
Amidst circulating ideas about the need for AI regulation, this article posits the contrary view. Despite calls for regulation from industry leaders such as physicist Max Tegmark and AI scientist Geoffrey Hinton. The author, Conan McMurtrie, maintains that the current regulation arguments need more thought and understanding. The case is made that, for
now, there's no compelling reason to regulate AI.
Netflix's implementation of paid sharing, which prevents users from sharing streaming accounts without paying a fee, is being closely watched by the industry. According to data from Samba TV, younger viewers, specifically Gen Z and Millennials, are more likely to cancel their Netflix subscriptions if they can no longer share passwords with people outside their household. The survey
revealed that around 52% of Gen Z and 51% of Millennials would cancel their accounts in such a scenario. Overall, Samba's data indicates that 37% of current Netflix subscribers would consider canceling due to a password sharing crackdown. However, the data also suggests that if users were unable to share passwords, a significant number (64%) of password sharers would subscribe to Netflix independently, with 76% of Millennials expressing the same intention. Samba TV CEO Ashwin Navin highlighted
that the crackdown on password sharing could accelerate the growth of Netflix's ad-supported tier, as sharers transition to their own accounts. The move to paid sharing is part of Netflix's strategy to monetize unpaid viewers and drive growth. Samba's data also revealed an increase in password sharing in general, with 51% of respondents sharing their streaming subscriptions with someone else. Netflix is taking steps to address password sharing, as it estimates that around 100 million users
globally are watching the service without paying.
WBD's new Max app, the result of the merger between HBO Max and Discovery+, has been launched with some complications. Users experienced technical issues with logins, and Roku required manual updates for the HBO Max app. Additionally, there was a temporary glitch with writer and director credits being lumped together. The app's navigation does not appear to be significantly improved
compared to its predecessors or competitors. The top-level menu offers the choice between series, movies, and HBO, which some may find an unnecessary distinction. The app missed an opportunity by not including Discovery+'s linear channels. However, the decision to exclude HBO from the new name, opting for "Max," was seen as a smart move. It allows viewers who may not appreciate HBO's content to still be interested in the app. The name change also helps to eliminate confusion with other apps
containing "HBO" in their titles.
The rise of connected TV (CTV) has transformed how viewers access TV content, with over 83% of US households being CTV enabled and an average of 7.3 apps accessed per household. Viewers are increasingly watching both streaming and linear TV, with FAST apps and ad-supported subscription tiers experiencing rapid growth. However, the
industry still struggles with transparency and program measurement in CTV, hindering the effective valuation of CTV inventory compared to linear TV. TVision aims to address these challenges by providing program-level engagement insights and introducing the TVision Power Score to help marketers gauge CTV program performance. Attention metrics can serve as a common benchmark for comparing performance across linear, CTV, and digital channels, offering improved transparency and enabling effective
positioning of CTV inventory against linear TV counterparts.
The rise of ChatGPT and other AI tools as sources of influence in direct-to-consumer (DTC) e-commerce is providing new opportunities and challenges for brands. Consumers are attributing their purchase decisions to ChatGPT, highlighting the value it delivers and providing additional context. To capitalize on
this emerging channel, brands without a track record in AI can stay engaged with customers, align their content strategy with ChatGPT's purpose, leverage prompt-friendly search trends and user-generated content, and identify gaps to fill. While the speed of ChatGPT's development and adoption remains uncertain, betting on media disruption and embracing progress can offer young brands a chance to compete in the marketing landscape.
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