Affiliate Marketing: Changing Terms, Continued Performance

March 25, 2014 Ben Myers
Amazon runs the standard bearer of affiliate marketing networks.

Amazon runs the standard bearer of affiliate marketing networks.

Not long after the internet sent its first data packet 25 years ago, affiliate marketing began its steady march of connecting publishers’ audiences with relevant products and services. Refinements in affiliate networks and attribution models have allowed affiliate marketing to evolve along with other aspects of the online world, and maintain its long-held place among the web’s dependable advertising options.

Affiliate marketing remains a backbone of online advertising for several reasons. Most importantly, its simple premise: When a person clicks from an affiliate website and makes a purchase (or completes another goal), the affiliate receives a percentage of the purchase value.

Sarah Bundy of All Inclusive Marketing

Sarah Bundy of All Inclusive Marketing

“Affiliates are smart, creative, well connected and often extremely influential over the buying decisions of others,” says Sarah Bundy, Founder and CEO of Vancouver-based All Inclusive Marketing. Because of the incentive that affiliate marketing provides, affiliates are creating content that is designed to both satisfy their followers and translate into affiliate sales revenue.

“When you have affiliates highlighting your products or service instead of your competition, you are gaining third party endorsements that have power and influence over others,” Bundy says. “Affiliate marketing has become one of the lowest cost, lowest risk marketing opportunities.”

Large companies still support affiliates

One of the reasons why affiliate marketing has remained relevant is many large retailers and networks that employ the strategy to help spread their services. Shopify, Netflix, and Amazon all have an easy-to-use affiliate program that recruits all sorts of publishers to serve ads on their behalf and receive a slice of the profit from sales or sign-ups. Amazon’s support of affiliate programs was particularly important. Launched in 1996, Amazon’s affiliate program has grown into the standard bearer for other programs to replicate.

Basically, anyone with a blog can sign up. However, only the affiliates with a critical mass of readers and the ability to write informative, attractive, or engaging articles are effective affiliates.

Becoming more accurate to sort out bugs

The evolution is continuing. Affiliate marketing is taking a page from display advertising and creating better exchanges. Web Pro News called 2014 The Year Affiliate Marketing Grows Up, citing the ability for natural language recognition and predictive analytics to better match content with products.

The wild west persona that used to dog affiliate marketing has largely disappeared, thanks to improved online sales attribution techniques, such as the multi-channel attribution now found in Google Analytics. Bundy says this has allowed retailers to “determine the true value of each customer” that affiliates send in their direction.

All Inclusive MarketingSome affiliate networks have attempted to change the perception of affiliate marketing by relabeling their services as ‘performance marketing’ emphasizing the symbiotic nature of the publisher-retailer relationship. The publisher only gets paid when a sale or goal is completed, making all publisher revenue performance-based.

“It’s time we had a term that shed more positive light on an opportunity that deserves far more attention,” Bundy says. She also cites organizations such as the Performance Marketing Association, which helps member marketers share best practices and set standards, who have added their support for the term and are committed to improving the performance marketing industry as a whole.

Though the label may change, the strong fundamentals of affiliate/performance marketing should ensure that it maintains its place as one of the web’s most resilient ad formats.

Download All Inclusive Marketing’s The CMO’s Guide To Performance Marketing.

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