12 Most “Smart Money” Reasons CMOs Choose Affiliate Marketing
In today’s marketing landscape, CMOs face increasing pressure to drive measurable, concrete new business in ever more innovative ways. But how do you control your spend, maintain a respectable CPA, and reach more new customers in different ways every day? One answer is Affiliate Marketing.
Here are the 12 most strategic benefits enjoyed by the CMO who chooses to invest in an Affiliate Marketing program:
1. Pay for performance, not just eyeballs
With Affiliate Marketing, you never have to worry about how and where to allocate spend, or whether the ROI will pay off. You’re simply paying commissions on new sales that have already taken place. You pay for performance, not for exposure, which is why Affiliate Marketing is also sometimes called Performance Marketing.
2. Extend your brand to new audiences
Affiliate programs involve bloggers and other publishers whose audience demographics may surprise you. Maybe nothing in your research or focus groups indicated that suburban housewives in Iowa would go mad for your product, but that’s exactly what happens when it’s promoted on those housewives’ favorite blog . With an affiliate marketing program, the audience largely self-selects. Publishers of any size — from major online portals to the “long tail” — choose to participate in your offer, they showcase it to their audience, and you sit back and count the conversions (and analyze the data).
3. Gain insights to use in other paid marketing efforts
In addition to a sales boost, another benefit of affiliate marketing is that it generates another channel for market research. The market speaks and it’s incontrovertible evidence because they spoke with their wallets. Analyzing the types and behaviors of consumers who convert via Affiliates can inform your other marketing choices in new and exciting ways.
4. Control brand image
Many major brands tightly control their Affiliate programs, picking and choosing only the most relevant or desirable publisher partners. With this approach, they retain control over their brand image across the web, and can narrowly target chosen consumers. The flip side to this approach, however, is that by narrowing your audience to those consumers you already know you can effectively target, you may miss out on some unexpectedly profitable market segments (see point #2).
5. Low overhead cost
Affiliate Marketing delivers some of the lowest CPAs of any marketing effort, and when properly managed, can significantly boost conversions. The major Affiliate networks take a commission based on volume, and if you’re a major brand, this percentage is highly negotiable. Thanks to today’s sophisticated and cost-effective SaaS analytics platforms, you can run even a large program in-house as a private network at low cost.
6. Gain much more data
Analytics and big data are all the rage right now, but your analytics are only as good as the data you feed in. With Affiliate Marketing, every touch point is an actual customer order. That means you get full customer information with every transaction — a consumer is no longer just an email address. With Affiliate Marketing, you can determine massive amounts of information including geographic data, technological sophistication, possible demographic data, even size/color/taste preferences.
7. Not just opt-in, ACT-in
These consumers have not only opted in to receive communications from you, but have voted with their dollars. They are obviously engaged consumers, and because you gained so much more information at the point of sale, your ability to target to them in the future is vastly better than with many traditional marketing methods.
8. Free, motivated “sales force”
Affiliate Marketers will cheerfully tell you that they are aggressive salespeople, and just like all salespeople, they’re motivated by the prospect of earning cash. This means they really want to sell your products, but unlike company employees who require a lot of overhead, there’s virtually no burdened cost or internal company overhead associated with an Affiliate Marketer. They simply get paid for what they sell. Win/win!
9. Easily A/B test creative or messaging
Unlike standard digital marketing efforts where an agency schedules, manages and rotates creative based on a rigid, pre-scheduled calendar of “buys,” Affiliate Marketing allows you much greater agility and testing ability. You can easily run a small, tightly targeted A/B test simply by making certain creative available only to certain publishers, then analyzing the results quickly.
10. Flexible, fast dispersal of special offers, deals, and sales
With Affiliate Programs, publishers are always looking for fresh creative and fresh content. Because they’re constantly updating their promotions and offers, you are able to very quickly roll out special offers, daily deals, sales, etc., with virtually no lead time.
11. Easily target specific market segments
As Affiliate Programs within brands become ever more sophisticated, some marketers begin to target specific genres, demographics, etc., by making chosen campaigns, offers or creative available only to certain publishers. This allows for highly targeted marketing directly to the most receptive audiences, which in turn is an even better incentive for those publishers to promote the offer.
12. Not just for eCommerce
Last but not least, Performance Marketing encompasses more than just eCommerce or retail. For example, very few people visit a website and purchase a car online in their free time, but every major automotive brand runs a Performance Marketing program to generate leads for test drives, purchase inquiries, brochure requests and more. Why? Because they understand that the CPA on a lead generated by an Affiliate is far lower than the CPA of a lead generated by display, banner, or even search. Think creatively about how you can enlist Affiliate Marketers to carry your message and sell your products
Do you use Affiliate Marketing or plan to use it? I would love to hear your thoughts in the comments.
Featured image courtesy of AMagill licensed via Creative Commons.