Female consumer shopping on a tablet Affiliate marketing is one of the oldest forms of advertising, yet brands are only just beginning to recognise the channels true value. The uncertainty of the past 12-months has led more brands to utilise affiliate to reach consumers, support retention and create brand loyalty. Though for some, there are still many questions around the channel and the value it drives for businesses.

Before we delve into the benefits, let’s first take a minute to explain the basics. Affiliate marketing is a performance-based channel where brands (advertisers) partner with publishers, who promote the brand to their audience. When a consumer clicks on a link shown by a publisher, they’re directed through to the brands site, make a purchase, and the publisher partner responsible for driving the sale will receive a commission for their referral.

One of the best things about affiliate is that it’s low-risk and low-cost. Brands only pay publishers when a sale occurs, making the channel largely cost-effective and risk-free. The channel is also flexible and continues to evolve in ways that traditional marketing channels are unable to.

Here we explore how affiliate marketing has evolved and the benefits it brings to brands and publishers.

Benefits for Brands:

In addition to being low-cost, affiliate is the only marketing channel that allows brands to adjust their advertising spend based on real results that directly tie to business objectives. Dynamic Commissioning technology gives brands the ability to offer different commission rates based on customer types, products or categories (alongside many other data points). The commissioning technology gives brands control of costs while providing complete transparency to publishers on how they might build their commissions.

For example, affiliate marketing is a great tool for brands to utilise when customer acquisition is a key KPI. Dynamic Commissioning gives brands the power to incentivise publishers to drive new customers by providing a higher commission rate for this consumer type. Data from Rakuten Advertising shows that new customers who come to a brand’s site via affiliate publishers are 11% more likely to make more than one purchase.

Additionally, existing customers referred via the channel are 21% more likely to make repeat purchases, demonstrating the incremental value the channel drives as both an acquisition strategy and in creating brand loyalty. 

Benefits for Publishers:

The past twelve months have seen more people turn to online content than ever before. And along with spending more time perusing the internet, consumers have become more price-conscious and savvy with their buying habits. These changes, coupled with brands turning to affiliate marketing, have led to increased demand for partners and technology.

Publishers who are not monetising their sites and leveraging high-quality audience data sets via affiliate are missing a core revenue stream. The integrations of a brands CRM data into affiliate platforms and the ease of publishers accessing this via networks help publisher partners understand their user base and align their content to a users’ specific preferences, capturing their attention and influencing them to convert.

The introduction of Multi-touch Commissioning has also opened the affiliate space to content publishers. No longer dominated by lower-funnel activity, multi-touch commissioning rewards all publishers within the path to purchase for the role they play in driving conversions. Whether it be during the discovery phase or the last-touch before a sale, publishers are credited. The introduction of such technologies has seen some of the world’s largest media houses integrate content commerce as a new approach to revenue growth and brand collaboration.

Affiliate Advancements:

Commissioning technologies haven’t been the only advancement in the affiliate industry. Innovative publishers are accelerating the change of pace. Over recent years we’ve seen publishers emerge that specialise in visual search, voice vouchers and bridging the online-to-offline gap. And though publishers are a vital force in driving affiliate advancements, automation and AI-powered tools from networks drive efficiency and additional revenue streams.

Publisher Matchmaking tools employ performance data from affiliate networks to provide publishers and brands with real-time recommendations on new partners. For publishers, this means more visibility into a broader range of brands, all while discovering new partners who value the publishers’ audience. And for brands, AI-powered matchmaking tools give publisher recommendations based on past performance history with other brands.

Through all of this advancement, personalisation is now also a possibility within affiliate. Personalisation tools like Rakuten Advertising’s Affiliate Consumer Graph allow brands and publishers to deliver the right message to the right consumer at the right time. By accessing unique insights from consumer browsing and shopping data, publishers can serve personalised messages and promotional offers to their audiences, all within data privacy and regulation parameters.

There is no denying the effectiveness of affiliate as a core channel within the marketing mix. And though more brands are investing in affiliate marketing, they are also scrutinising performance and ROI. Understanding the benefits and technologies that affiliate provides to both brands and their publisher partners is the first step in truly understanding the value the channel brings.

Find out how your businesses can drive value through the affiliate channel. Visit rakutenmarketing.com and speak to an expert.