By Peter Klein, senior vice president of media services at MediaWhiz
Rodney Dangerfield would have loved affiliate marketing. It gets no respect, at least not from CMOs and senior marketers.
Long considered the ugly stepchild of digital marketing, affiliate marketing has grown to become one of the leading drivers of brands’ online marketing success. It accounts for more than $21 billion in online advertising revenues in 2011, according to the IAB.
Thankfully, this lack of respect is starting to change. Marketers are taking notice — affiliate marketing is a powerful force in brands’ online marketing strategies.
In a new white paper, “The CMO’s Guide to Affiliate Marketing,” I address the key reasons why affiliate marketing is such an important part of any brand’s online marketing success. More importantly, I stress the reasons why it can no longer be ignored by CMOs. Let’s review those reasons in detail:
1) Affiliate marketing is adaptable and trackable: Affiliate marketing can be used for any vertical, brand, company, language, time frame or demographic. The Internet is open 24/7/365, so actions from affiliate marketing campaigns can be tracked and reviewed with detailed metrics whenever desired.
2) Affiliate marketing is a proven ROI testing ground: Affiliate marketing is a useful testing ground for CMOs who desire online marketing channel options, instant gratification, speed and a clear measurement of return on advertising spend (ROAS) or return on marketing (ROM) investment.
3) Affiliate marketers have deep, industry-specific expertise: Many affiliate marketers are experts in industry metrics and traffic sources. They can help CMOs develop campaigns based on long-term brand- and customer-acquisition goals. This is critical as the industry evolves to help brands reach a larger mobile-consumer target.
The Benefits of Affiliate Marketing
Affiliate marketing is the smartest online advertising investment CMOs can make. Here are five reasons why that is the case:
1) Twenty-one billion reasons: Performance marketing drove $21 billion in online advertising revenues in 2011, according to the IAB. This isn’t a niche segment of the online marketing industry. Affiliate marketing is a mature and profitable industry in and of itself and one that CMOs should invest in as part of their integrated marketing campaigns.
2) Small investment leads to big results: It takes a very low investment to test into various media channels, at a recommended spend of $10,000 per three media channels.
3) Multiple-channel reach: Affiliate marketing includes all types of online marketing, allowing CMOs to launch test campaigns in up to three different channels, such as email, search and social media.
4) Speed to market: Once an affiliate marketing campaign launches it often takes as little as one to two days to fulfill the budget and measure results. This is unparalleled in any other marketing vehicle.
5) Measurable results: CMOs pay their affiliate network only when an action occurs, be it a sale or a lead. They also receive critical analytics from users’ activities across their website. There are no other channels in marketing that have such a specific and actionable ROI focus, making affiliate marketing easy to evaluate.
There are several more reasons to engage in affiliate marketing, but CMOs need to start with a basic understanding of what to look for and how to manage their affiliate marketing efforts before engaging an affiliate network.
Testing a small affiliate marketing budget for immediate and measurable results, and on an affiliate’s own marketing spend, will make CMOs more efficient and accountable marketers. None of this is possible in traditional marketing campaigns.
It’s time for CMOs to give affiliate marketing its due respect. An industry generating $21 billion in annual advertising revenue on behalf of brands is worth CMOs’ consistent and strategic investment.
For more insights on the benefits of affiliate marketing download the new MediaWhiz white paper, “The CMO’s Guide to Affiliate Marketing.” The paper outlines critical steps CMOs should take to begin working with an affiliate; defines core terminology; and why it’s critical for CMOs to invest more of their marketing spend in the affiliate marketing channel.