Affiliate Marketing Challenges Facing Merchants in 2017

Keeping pace with the online marketing space is hard. Advances in technology, shifting consumer behaviors, and innovative methods for capturing attention move at a rapid clip. Navigating the affiliate marketing landscape can add to that complexity.

But affiliate marketing is a proven, measurable way to add value. That makes it worth the effort to include in almost every online organization’s digital marketing strategy. Successful companies have demonstrated a willingness to invest in all digital channels–affiliate, paid search, display, retargeting, social, email, and earned media.

The Challenges

However, the sophisticated nature of digital marketing brings up some challenges as many dig deeper to gain greater familiarity with each channel.

For direct-to-consumer eCommerce, it’s a challenge to figure out how to structure quickly converging sales and marketing roles. Integrating these functions helps foster a cooperative environment where all channels are working together to achieve objectives. Organizations with sales and marketing channels operating in silos are far less effective.

Another hurdle is attempting to have a mix of affiliates that goes beyond the typical cashback and coupon sites. Those type of affiliates have value in driving traffic and conversions. However, the inclusion of content affiliates, review affiliates, etc. gives brands access to a more varied audience. In addition, these affiliates use a wide breadth of acquisition tactics to get potential customers into the purchase funnel.

According to iAffiliate Management CEO, Rick Gardiner, “These opportunities are driven by business development, but tracking these through the affiliate program makes it easy to onboard these partnerships and track success. It’s created a new segment of “non-traditional” affiliate partners for internet retailers.”

The Affiliate Impact

It can also be challenging to understand the impact of what the affiliate channel is driving. This is especially true as it pertains to first time buyers versus repeat customers and reconciling that data against website analytics or CRM system.

For growing brands, first time buyers is often seen as the most important metric for expanding their business. Many brands are willing to give up more of a discount up front for gaining a new customer. This allows the brand to get a foot in the door and acclimate new customers with its products or services.

“Knowing the breakdown between new vs. existing customers is beneficial when it comes to understanding how the affiliate channel is attributing to a brand’s growth beyond just a sale,” Marty Marion, Director of Digital Marketing at iAffiliate Management says.

Understanding more about customers also helps brands better understand life-time value of a customer. It also enables brands to market to a new customer through lower cost channels like email and social media. And it opens the door to more controls on retention customer discounting. There are also other opportunities like reorder reminders and seasonal promotions.

Technology Advances are Fueling the Marketing Fire

Gathering and leveraging all of this available data is being made easier by technological advances.

“Affiliate networks and digital marketing platforms are addressing challenges around multi-device tracking, attribution and offline tracking. I see this trend continuing as the needs of digital marketers becomes more sophisticated/complex,” says Gardiner.

And increasingly robust attribution software has also made it easier for marketers to gain insight into the entire sales funnel. This allows digital marketers the opportunity to see how all channels assist with a conversion. Marketers also see the percentage breakdown of each channel’s contribution along with their touch points for a conversion.

“It’s important that all channels are working together in a cohesive marketing approach,” Marion says. “It gives marketers data on the various touch points when a customer engaged with the brand–first touch, last touch, any touch. Not having all lines in the water trolling at the various depths means when a person is ready to bite (make their final purchase decision) you might miss that fish!”

So, as marketers look to include affiliate marketing into their mix or take their current affiliate channel to the next level, cohesion, insight, and understanding how to overcome hurdles are paramount.