Affiliate marketing is a powerful tool for increasing sales, and more and more brands are taking note. Google Trends data indicates that the number of searches for "affiliate marketing" rose 30 percent between 2016 and 2017 -- and whether the searches represent the brand side or the affiliate side, both have something to gain from working together.
The Affiliate Avalanche
Affiliate marketing is undeniably becoming popular. A study of affiliate marketing trends by Forrester Consulting found that, as of 2016, more than 80 percent of brands reported utilizing affiliate programs, and they're contributing to what's predicted to be a $5.3 billion industry by the end of this year. The study forecast that the industry will experience growth in excess of 10 percent each year up to 2020, meaning that spending could rise to $6.8 billion in that time.
As physical retail stores become less relevant, brands are turning their attention toward the future of advertising. Millennials especially trust influencer opinions, and affiliate programs give influencers of all calibers the chance to form mutually beneficial relationships with the brands they support. At this point, affiliate marketing is responsible for 16 percent of all online orders -- only 4 percent short of the performance of paid search ads.
Lest you imagine affiliate marketing to be a quick win, keep in mind that plenty of affiliate programs exist that go nowhere. Not only is this unproductive for all parties involved, it's also expensive to develop a program that then stagnates and disappears. Affiliate marketing is only successful if it's implemented properly, so focus on these tips to give your affiliate program every advantage:
1. Build a detailed blueprint for communication and organization.
Determining how an affiliate program will fit into your business is not a one-and-done process. Creating a program can be a time-intensive undertaking, so figure out who will be responsible for each aspect of the development, and come up with key metrics to monitor progress. If you don't have a plan of action or goals to meet that indicate when the program is successful, it will be much harder to tell when you're off track.
2. Invest in the relationship with marketing materials and advice.
An affiliate program is a two-way street. Your affiliates are sending you prospective customers, so make sure you help them help you. Giving them advice on how to increase traffic and optimize content -- as well as inside info on your products -- will go a long way toward making them more productive while helping them realize they're part of the team.
3. Adjust pricing models to benefit your most loyal affiliates. In his book "Performance Partnerships," Robert Glazer points out the folly of boiling down affiliate performance to a percentage: "To this day, some account managers are still expected to project performance fees from their accounts on a regular basis. Viewed from this perspective, it's easy to see how network managers come to believe that numbers are all that matters. The competitive, independent culture that typifies the U.S. affiliate industry only fuels this dynamic."
Instead of assessing affiliates based on the revenue they generate during the holiday season, take a step back and look at their overall performance. It's easy to base commission on the value of the products affiliates are selling, but it's more useful to measure the lifetime value of the customers they bring to your brand.
4. Take the baton to make that final conversion. Many brands make the mistake of expecting affiliates to drive conversions while they sit back and watch the revenue pour in. The reality is, affiliate programs are designed to bring traffic to your brand's e-commerce site. No matter how they got there, it's your job to get the customer who visits your site to buy something. The better optimized you are to drive conversions, the more sales you'll make and the more incentive you'll give your affiliates to boost their own contribution.
Affiliate marketing isn't exactly new. The concept has been around for a long time in the form of celebrity endorsements, but the digital revolution is giving everyday people with exceptional audiences a chance to get in on the action. Find individuals who you think are good brand advocates and offer them an opportunity to grow with you. Building a network can be a great way to increase sales, and it starts by adding one affiliate at a time.