E-commerce Link : Affiliate Renaissance

Breathing new life into an often underdeveloped affiliate marketing strategy

Online affiliate marketing has evolved into a “love it or hate it” strategy, leaving many marketers torn. How can marketers work to grow affiliate-related revenue, new customers and leads in a world that’s already decided “fewer affiliates are better”? A few bold voices are suggesting a Renaissance in this tried-and-true strategy.

Like many direct marketers, Amazon.com announced it’s paring back its program—disallowing search-based affiliate linking to its site. Instead, the e-tailer and others are investing creatively and aggressively in smaller affiliates to create results. They’re not running scared. They’ve worked diligently to curate affiliate relationships.

No Pain, No Gain—Do the Math
Ultimately, increasing performance-based transactions or leads requires more distribution partners. Yet most marketers grab low-hanging fruit—the obvious affiliate partners—and ignore the rest. The results are stagnant, sometimes shrinking affiliate programs housing a few dozen (or less) performers.

“While fewer affiliates might be more easily managed, you are certainly leaving dollars on the table with this approach,” says Paul Moss, formerly of Insurance.com and the founder/CEO of Moss Affiliate Marketing.

Moss believes that the more marketers move toward this “less is more” mentality, the farther they get from the original promise of context-based affiliate marketing pioneered by Amazon.com.

Flashback to the Past
Seasoned affiliate manager and The Partner Maker Founder/CTO David Delisle agrees and suggests something radical. “We’re seeing affiliate marketing move back to where it began—thousands of small mom-and-pop Web sites, each driving smaller numbers of visitors to marketers,” Delisle says.

He’s among a few veterans who believe the predominant approach used by most direct marketers—where the focus is exclusively on top affiliates—is dangerously flawed. Most marketers who use this strategy suffer symptoms such as flat revenue and flat customer file growth. Traditional, powerhouse affiliates like Ebates, Upromise and MyPoints act more like retention-focused partners—not affiliates delivering new customers, Delisle explains.

“While there are few affiliates who are ‘sure things,’ you never know how someone will perform until you try them,” says Moss.

“Focusing on top-producing affiliates is good advice yet problematic when it’s the only focus—when there’s a lopsided investment in a relatively small number of ponds to fish in,” says Delisle. Plenty of fish swim in these ponds, but this is not a growth strategy on the customer acquisition side.

“What about the rest of the Web? How does this include emerging social-oriented affiliates? It doesn’t,” he adds.

Experiment, Share and Manage Risk
What’s the secret sauce for affiliate marketing success? In a few words: investment and risk. Breaking away from the pack is a factor of how much risk marketers are (or are not) taking in forming deeper partnerships with affiliates. Higher risk tends to yield higher payoffs: more new customers and incremental leads.

As an example, affiliate management company AMWSO used an award-winning video approach to drive sales for conscious goods marketer Gaiam. The focus was balanced across large and small affiliates. Similarly, Moss’ approach at Insurance.com involved selectively underwriting affiliate search optimization efforts. Both companies are using a highly measured approach to ensure ROI—one that involves data-sharing with affiliates.

“Optimization of campaigns cannot occur in a vacuum—it’s a team effort,” says Chris Sanderson of AMWSO, who agrees with Moss that marketers who take a cautious, yet trusting, view of affiliates see better results.

Use New Tools
Marketers and affiliates have begun to use tools to leverage online social media—video, images, blogs and various, easy-to-use publishing platforms. New tools like PopShops.com—hailed as the largest searchable collection of affiliate products—are building blocks for innovation, offering opportunity to affiliates and advertisers.

According to ValueClick Vice President of Corporate Strategy John Ardis, most marketers hold back on providing affiliates with the simplest of tools. He cited giving affiliates the ability to “deep link” (bring visitors directly to product pages) on e-commerce sites.

“A great many marketers are not fully realizing what’s available to them today,” Ardis says.

Make Change: Traditional and Experimental
How can marketers work to grow affiliate programs in safe ways that make sense?

“Set affiliates up as an extension of your company—so they’re complementary. Yes, some cannibalism will exist, but it’s foolish to think you can overpower the Internet and don’t need affiliates to achieve comprehensive coverage,” says Moss.

Growth and expansion go hand in hand with social media discussions, but we cannot forget bread-and-butter partners: search marketers, landing page optimization affiliates—the tried-and-true stuff. Some are diversifying their affiliate bases in traditional ways that involve rolling up sleeves and interacting with larger numbers of smaller affiliates.

“It’s important to note that there’s no silver bullet here. This involves work—contacting potential affiliate partners using e-mail, instant messaging, Facebook, telephone, etc.,” says Delisle.

“Marketers should focus on a larger group of smaller affiliates if they want their programs to grow and take advantage of emerging social networks. They must, and many are. These are the ones to watch, but they’re keeping quiet these days,” he adds.

Even with limited tools and staff, some marketers are quietly investing in grassroots approaches that involve rolling up sleeves, “dialing and e-mailing for dollars.” It’s good, old-fashioned work with less reliance on large affiliate networks for new partners.

Looking forward, social media’s role remains unclear, although we’re seeing early participants.

Ultimately, some suggest we’re on the cusp of a customer recommendation-based model that looks like multilevel marketing—turning everyone into an affiliate. Witness Amway’s Fanista, ToldYa.com and RadicalBuy.com as early signs of scalable recommendation-based affiliation.

Buzzillions.com hails itself as a Web site of “product reviews from people like you.” The affiliate collects and displays customer reviews—from individuals verified as actual buyers of the products—provided by participating advertisers, like Staples and Zappos.com. Buzzillions.com’s goal is to help consumers make educated purchasing decisions. “We’re in the business of putting an end to buyer’s remorse,” the Web site claims.

According to Delisle and others, given new Web 2.0 technologies, more people than ever are publishing their opinions online. As this trend continues, we won’t see a few affiliates rise to the top but, rather, a large base of new affiliates
continually emerging.

“This is the reality, and ignoring the ‘long tail’ will become a thing of the past,” says Delisle.

Jeff Molander is CEO of Molander & Associates Inc. and an investor in The Partner Maker LLC. He helps business leaders make more money using integrated, performance-focused strategies and specializes in content (social) marketing strategies that connect customer behavior directly to sales. Molander can be reached at jeff@molanderassoc.com and blogs at www.jeffmolander.com.

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