A New Balance
The Search Marketing Conundrum
This new focus on efficiency is putting stress on wildly popular CPA affiliate marketing strategies. After all, such affiliates work on a “pure performance” basis and historically have worked independently—without concern for marketers’ objectives beyond netting the sale or lead. Yet behind the scenes, marketers are asking more of affiliate publishers given their increasing savvy with search marketing (and awareness of competing affiliate tactics).
“As marketers increase their search campaign activity, they’re noticing affiliates are already there and have been for years now,” says Lee Gientke, business development manager of lead-generation clearinghouse LeadPoint Inc., in Los Angeles. “This has led to savvy direct marketers examining how affiliates use their trademarks … but more importantly, affiliate marketing’s inherent level of transparency is creating a desire to measure against simple marketer-side goals. Goals like paying mostly for incremental sales.”
Such objectives are forcing marketers to reconsider working with partners who may inflate media costs (i.e., compete for ad space in search engines). Similarly, they are compelled to pay more attention to new-to-file customer ratios associated with affiliates, says Gientke.
“In the end, marketers are tending to fall into two camps,” says Dr. Amanda Watlington, owner of the Charlestown, Mass.-based search consultancy Searching for Profit. “Those who all but abandon Web affiliates as a reliable means to acquire incremental sales or new customers, and those who make attempts to work with them with an eye toward the bottom line. Working with affiliates requires both knowledge and discipline.”
Auditing your own affiliate and search programs to identify inefficiencies is a popular place to start, says Watlington, who also recommends giving more consideration to customer path to purchase.
Focus on Path to Purchase
The desire to know what marketing strategy drives sales best, dollar for dollar, allows future dollars to funnel into effective strategies yielding more sales. This need produces serious challenges, since Web and offline channels influence one another at a tactical level. Understanding what truly works best calls for an approach factoring in multichannel shopping habits of customers whose varying paths to purchase are influenced by multiple media (each with its own price tag).