Affiliate Marketing Programs are a sizable and stable industry within the Digital Marketing ecosystem. It has many different definitions depending on how you think about Affiliate Marketing Programs. In my definition and in most digital marketing lexicons; Digital Marketing or Affiliate Marketing Programs are defined by performance based marketing between a publisher, which is capturing the eyeballs on a website, on a blog, or in an email as a third party and then driving those eyeballs to a marketer’s web site.
Typically, a consumer marketer’s website in a retail marketer’s e-commerce site is used to browse and (hopefully) buy. Affiliate marketing programs tend to be defined by the business model which pay for performance whereby a retailer or brand only pays for marketing to the publisher who's driving traffic. When that traffic converts, the people by there are other forms of affiliate marketing. The primary one that we deal with is Rev Share Performance Based Marketing; this is when a retailer pays a publisher a percentage of resulting sales for the value of that traffic. There are other forms of affiliate marketing that are often referred to as Cost Per Action or CPA advertising which could be an email sign up. Other types of lead generations are form submissions or a coupon download. Those are not actual sale transactions and purchase transaction but still have value to the marketer.
If the objective is for marketing programs to facilitate the connection between publishers that drive traffic and the marketers that want certain outcomes and create financial models, that can incentivize both parties with a keen eye towards our performance affiliate marketing programs. This tends to give most retail organizations that we're familiar with the highest A-Y out of any paid channel or customer acquisition channel, largely because it is a model that works only when a sale gets made. If a publisher drives somebody to visit a retailer site and that person doesn't buy, the retailer doesn't have to pay. This is a very interesting concept that is foreign to a lot of media folks who tend to pay up front and wait and see if that works. Affiliate Marketing Programs do tend to be more bottom of the funnel promotional driven. You could think of coupon Web sites that offer coupon codes or in-store coupons. They tend to be these deals seeking sites that tend to garner a lot of consumer attention and eyeballs and tend to drive conversion to retail sites. Affiliate Marketing Programs are always under scrutiny even though it's cheap because of its effectiveness to marketers as they need it to be.
So, despite Affiliate Marketing Programs having so many benefits, they need to be analyzed differently by marketers rather than other paid media channels. In particular one of the growing areas in Affiliate Marketing is the ability to use digital publishers to drive in-store sales transaction and behavior. That is using various technologies like red tracks in order to track and measure an in-store purchase through an offer redemption back to their particular Web site that drove the traffic in the first place. Affiliate Marketing is a business model that has benefits to both e-commerce as well as brick and mortar. Marketers are only at the very early beginnings of figuring out how to leverage this type of business model and challenge.
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