2023 is the Year of Affiliate Marketing 📣 #9

Hey friends 👋!

Should I welcome you to 2023? Or did you do that yourselves?

I wanted to take some time to thank you for being willing to spend a few minutes with us learning about affiliate marketing today and for the precious space in your inbox 🙏

Today we'll do a deep dive on why affiliate is the right thing to do for your business this year. In future posts, we will share more examples, case studies, and tools you should be using to make affiliate marketing your go-to channel for impact.

Please send any feedback you have, we want you to get massive upside from reading this!

Hope you enjoy it!

Tye

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Affiliate Marketing will be THE performance marketing channel in 2023.

Affiliate Marketing investment, attention, and influence (no pun intended) has massively increased in the last ten years for the following 7 reasons:

1. Technology has improved empowering more partner marketing options, flexibility, payments, and creative partner integrations e.g. Impact
2. Cleaner: Fraud decreased
3. Content is King: the quality of the content being produced has increased
4. Influencer size and value exploded. See the rise of TikTok, Instagram influencers and their power to persuade. Yes, affiliate is the influencer and the influencer is the affiliate.
5. Publishers sought new monetization streams. Digital publications sought an improved means of monetization beyond traditional methods such as SSPs (supply side platforms) / Programmatic Display Direct Sales Display Marketing.
6. Rising costs of alternatives. Paid search and paid social with algorithms eating ad dollars and rising CPMs
7. Lowered visibility / signal from alternatives (especially via Meta Ads) into performance via cookie deprecation and iOS14 / ATT changes

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Let's review:

1. Affiliate Marketing is the most underrated and misunderstood performance marketing channel.
2. It's an aircraft carrier not a cruiser (is not as agile to start or stop as paid search/social).
3. If managed properly it can deliver an additional 20% of revenue for e-commerce brands.
4. It is partner marketing and influencer marketing.

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Definition: Affiliate marketing is a means of digital advertising where an e-commerce brand advertiser (e.g. Nike Mens Running Shoes) works with a partner/affiliate (often a website e.g. BelieveInTheRun) to deliver specific actions (sales/leads) and paying them for said results.

This often includes CPM, CPC, CPA payment structure but it is most often CPA (Cost Per Action) payment structure making it very attractive for advertisers. This means lower risk if actively managed.

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Top Reasons Affiliate Marketing will be THE performance marketing channel of 2023:

1. Valuations & Budgets are down and funding can be scarce - capital is not as free as it used to be. 😕

As a result marketers will need to be smarter and scrappier. Affiliate Marketing can be the highest ROI channel for performance marketing and is predominantly a pay per action (often sale/revenue action).

While not cheap or low cost, it is often lower cost to manage than Paid Search, Social, Connected TV, and Programmatic.

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2. Recession is here 😨

Affiliate performed very well in '01 and '08 it will do so again.

If the Fed somehow pulls off a soft landing with a limited decline in GDP over each quarter of 2023 affiliate will continue to do well.

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3. Costs are still relatively high on a lot of paid social channels. To nail paid social you need to really have content dialed in. That is possible but its not cheap. Affiliate requires a lot of fresh content as well but its not as high as paid social ads.

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4. It's multi-channel and it's full-funnel 🔁

One of the biggest misnomers in affiliate marketing is that it is coupon and deal sites only that "claim" purchases that would have happened anyway.

Can that happen and has it happened?

Yes. 😤

Is that how we run affiliate programs?

Hell no. 🙅‍♂️

Affiliate marketing can include the following partner business models across the entire marketing funnel from                                    

1) Awareness - influencers/networks, media companies / content platforms, sub affiliate networks,                                    

2) Consideration - Price Comparison, Bloggers, Employee Workplace, FinTech, College / community,                                      

3) Converson - Coupon/Deal, Pay Per Call, Loyalty, Retargeting, Email

Yes Affiliate Marketing enables you to reach people across channels, inventory types, and levels of the marketing funnel to deliver new customers as well as activate existing.

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Summary

Affiliate Marketing can deliver an additional 20% of revenue to your e-commerce brand’s business. 🚀

It's influence on performance marketing in the last 10 years is up. 📈

It will only continue in 2023 and be the performance marketing channel this year! ⚡️

Let's go!