Editorial Articles

It’s a social world after all
Facebook currently has more than 400 million active users around the globe , followed by 75 million Twitter accounts and 50 million LinkedIn members worldwide. Not only is this an absolutely huge pool of latent online customers, these networks also have the potential to influence our everyday lives in hitherto unforeseen ways. In the UK, 65% of companies use Facebook as part of their marketing strategy, while Twitter marketing has jumped from just 3% of companies in 2008 to 49% in 2009 . 

This trend has also had a dramatic impact on the affiliate marketing industry. A clear example is Domino’s pizza, who announced in March that it will be testing a new “social affiliate” widget to allow anyone with a personal web space, such as a social network page or blog, to host advertising from brands and to earn commissions from any sales driven from their ads. It will be interesting to observe the results of this trial and to see whether we have reached the ‘tipping point’ when other brands will follow suit by integrating their social media and affiliate marketing programmes more closely.

Integration challenges
In practice, it can be quite complex to successfully integrate social media and affiliate marketing programmes. In general, many brands are reluctant to tap into this ‘long tail’ of affiliate marketing, as the administrative and cost burden of working with a large number of micro-affiliates can outweigh the potential revenue benefits. However, as in the case of Domino’s, new technologies are smoothing this process and challenging the theory that it’s impossible to leverage this booming population of budding micro-affiliates within social networks.

Two major challenges associated with tapping into the long tail of affiliate marketing are communication and commission payments. According to the 2010 AffStat report , just under 60% of affiliates believe that the frequency of commission payments affects their decision to promote an affiliate offer. Speed of payment therefore, especially when targeting micro-affiliates, is a crucial part of increasing brand loyalty and sales. In order to effectively mobilise the global ‘long tail’ of affiliates, brands need to adopt an efficient system that allows all affiliates to be paid instantly, regardless of the size of each payment.

Communication is another important part of building the relationship between the brand and the affiliate. A recent report revealed that the vast majority of affiliates (64% in the U.S., and 70% in the U.K.) stated to have limited communication, indirect communication or no communication with merchants. The use of advanced technology and performance marketing software helps to improve affiliate loyalty and experience through clear and open communication. In addition, operational and transactional email marketing messages can be sent to affiliates informing them of a recent payment with links to check their account.

There are still challenges to address posed by the influx of micro-affiliates but as more brands like Domino’s start to address these challenges, it will be fascinating to see whether other brands start to follow suit. If a few brands can successfully find solutions for these challenges, then we may see a tidal wave of merchants implementing social media and affiliate marketing programmes, almost as rapid as the rate at which consumers are flocking to social networks.

Alex Mifsud
CEO, EntroPay
Twitter: entropay