October 23, 2019

Stop Paying for Traffic, Start Paying for Sales Instead

During periods of economic uncertainty, a weakening pound, and consumer confidence at record lows, digital spend has to work harder and more efficiently. To meet revenue targets, digital managers have to reach more consumers to achieve the same revenue, which in turn pushes costs up and drives profit down.

Typically, if you are using paid media channels, it’s expected that you pay for traffic. Paid search and social target visitors on either a click or impression basis but, while conversion rates appear to struggle, more and more paid traffic is going to waste.

Partner marketing – also known as affiliate marketing – has made a name for itself as a performance-driven channel, where partners typically only get paid when they deliver sales, and not traffic. Often partner marketing is set up in such a way that it’s a separate marketing channel from others including PPC, social, display, and influencers. The reality is that affiliate isn’t a different channel of marketing – it’s simply the way in which you pay for media.

As the channel has matured, so has the capability of affiliates. Now from performance-based paid search and social, to influencer marketing alongside incentive partnerships through cashback and voucher, the partner marketing channel is all-encompassing to shift budget away from paid traffic, to paid sales.

On the whole, the effective cost-per-click of running affiliate marketing equates to just 13p per click. Compared with 79p as an average AdWords click spend, and 58p per click for display traffic.

A Risk-Free Approach to New Markets

For brands with international ambitions, the biggest hesitation is investing in a new market. While much research into demand and forecasting can be done, it remains uncertain as to the effective performance when opening in a new territory.

Launching a localised affiliate program gives you the opportunity to feature advertising on local publications, as well as reaching out to the potential audience following the same performance-based commercial setup, allowing advertisers to ‘dip a toe’ into the market before building an investment plan.

As well as initial traffic and sales, brands can also use the channel to build up data, in the form of email addresses, social following, and brand awareness ahead of a full launch. It also allows you to plot other key data, including visitor trends across their journey, purchasing habits, and conversion rates to provide forecasts which are much more accurate than speculative.

Affiliate Marketing & Influencers

Alongside traditional content and incentive-based affiliates, influencers – and influencer marketing – have grown in popularity as a way of targeting a demographic of customers, using a personality which has a following of the desired segment.

The strategy with influencers has long been product gifting plus fee for content as a standard commercial practice but, as with other traditional methods of CPM, CPC, and tenancy, affiliate marketing has involved to include micro-influencers, working on a gift plus performance basis, testing the strength of their following and influence of their persona.

For large and smaller brands alike, the affiliate influencer strategy allows for a much deeper and broader partnership base, working with many more influencers than a typical fee budget would allow. In turn, this allows advertisers to reach more of their desired audience in a shorter space of time, accelerating growth plans or making a launch of a new product or collection more impactful.

As a roundup, affiliate marketing is much more than an incentive channel. When managed correctly, it can add significant incremental value to revenue and brand itself, as well as reduce cost versus traditional media.

Steve spoke at our Digital Marketing Summit on the 24th October. Watch his presentation here.


Written by

Steve Bryant,
Managing Director at ThoughtMix