Affiliate marketing is a key channel for retailers, and is seeing growing adoption in Australia as consumers shift their focus to online and ecommerce.
A purely performance-based channel, affiliate and partnership marketing is a popular ‘shared success’ strategy, beneficial for both retailers and affiliates.
One or more affiliate partners are rewarded for any traffic or conversion that they drive with their own marketing efforts – and reward parameters are completely dictated by the retailer.
What makes an affiliate program?
Affiliate marketing has long been associated primarily with cashback schemes, voucher codes and discounts. This means that many retailers have been hesitant to engage with the channel due to fears around reputation. Nowadays, cashback, voucher codes and discounts can still be part of the mix of a healthy affiliate program, but they’re not necessarily all of it – and they shouldn’t be. In the age of blogging, content, and influencers, we’re seeing more and more brands reaping the benefits of affiliate marketing.
At its core, the affiliate channel is simply a means of managing partnerships. Whatever a brand is hoping to achieve, an effective affiliate program can deliver it through valued partners. A report by Authority Hacker suggests that affiliate marketing programs now generate an average of 23% of revenue for brands – so for retailers not already leveraging the channel, now is the time to engage.
Market stats
The sector itself is now worth over USD $12 billion globally, and is expected to grow by 10% in the next few years. [1] The 2021 IAB Affiliate Marketing Australian Industry Review found that 70% of brands surveyed saw an overall increase in business in 2020, and 68% recorded increased revenue through the affiliate channel specifically, this means that of the brands who saw growth last year – 97% realised growth through their affiliate program. 71% of respondents rated affiliates a 7 out of 10 or higher for return on investment, but it’s not just about revenue: 63% of respondents rated the channel a 7 out of 10 or higher for customer acquisition. [2]
So, why affiliate marketing?
The affiliate marketing channel is a proven sales tool and can provide additional support to your broader marketing objectives. Brands can tailor each program to meet specific goals, with tiered commission structures tailored around action. Whatever your primary objective is, whether it’s new customer acquisition, the sale of certain products, or the type of purchase method (in-store POS vs online), the channel can be set up to reward that specific goal.
The nature of affiliates means that retailers can’t take a scattergun approach. The product must be relevant to the affiliate and their audience, otherwise the channel loses value. Because of this, brands that build strong relationships with partners in relevant spheres will see a rich mix of affiliates, covering the customer journey from awareness to purchase.
Final thought
Managed and monitored proactively, an affiliate marketing program allows retailers to benefit from a new revenue stream and build relationships with key affiliate partners. It’s important to have clear targets and a commission system in place before affiliate partner outreach begins, whether a retailer’s primary target is increasing sales, growing brand awareness or driving traffic. This means that effective affiliate partners will be rewarded for their efforts and encouraged to engage further, and the retailer will benefit in kind.
For many brands, choosing to partner with an agency to develop an affiliate marketing program allows them to benefit from the agency’s considerable expertise and existing relationships with influencers, businesses and other partners. Have a current affiliate program that could do with a boost? Request your free program audit from Silverbean. Thinking of launching your program? Get in touch.
References
[1] https://hostingtribunal.com/blog/affiliate-marketing-stats/#gref
[2] https://iabaustralia.com.au/resource/affiliate-marketing-australian-industry-review-2021/
