Affiliate marketing is a performance-based channel that works for the mutual benefit of brands, customers, and a third-party intermediary. The model, in its basic form, is very simple – a business will tap into the huge audiences that an affiliate website has by providing said affiliate with content to push to its customers, which is often in the form of a voucher code or cashback offer (which we will get onto in more detail later in the article). The affiliate is then in turn rewarded commission from the brand for every sale they drive, easy!
Despite the simplicity of the model, affiliate marketing is an ever changing world, where the way in which affiliates drive sales is continually adapting. The fact of the matter remains, whichever affiliate site the customer clicks on last before making the purchase wins the commission, as it always has been – but there are several different tactical ways in which affiliate channels can earn that ‘last click’.
Traditionally, voucher codes are the key operator. With the promise of a discount, free delivery or a free gift with your purchase, voucher code sites have been able to build up armies of loyal followers who constantly check their homepage, newsletters and push notifications to keep abreast of the best savings available from the biggest brands online. Prime examples of these sites are Vouchercodes.co.uk and Voucherbox, both of which are huge players in this voucher code sector.
Alongside this, you will find cashback sites forming the cornerstone of the vast majority of affiliate marketing programmes. Here the commission earned by the affiliate is passed back to the customer in the form of a cash amount equal to the percentage of sale that the affiliate earns. The likes of Quidco and Topcashback have had great success in this area, paying back millions of pounds to members in a Robin Hood-style of taking from the well-established brands and giving back to the public. It is all quite heroic really and when there is a commission increase being advertised, well you would be crazy to miss out!
The way in which the cashback affiliate marketing earns money is by selling various exposure packages to brands, often in the form of an emailed newsletter, social media post or home page placement. The brand would benefit from having increased activity around a particular promotion, the affiliate would benefit by receiving tenancy from said business and more customers would discover the available cashback and benefit from earning money back for their purchase – it really is ‘win-win’ for all involved!
In recent years we have seen the rise of the re-targeter: the overlay provider, the emailer of abandoned basket contents, and the server of adverts once you have left the site. These affiliates are particularly strong at converting customers, giving them that extra incentive to purchase or reminding them of a key marketing message just as they are about to leave the site. Yieldify and Ve Interactive are key exponents of these arts, spectacularly securing the last click (and commission in the process).
We also see the blogger and content producer becoming more and more prominent in the market space. With hundreds of thousands, sometimes millions, of loyal followers, we see bloggers having more and more influence in the public’s spending behaviour. This is an area that continues to grow and one that the channel continues to re-evaluate how best to reward. The problem lies with the ‘last click’ model that the affiliate channel has always adopted, where the affiliate who gets the last click from the customer before they purchase earns the commission.
So in the case of a blogger, quite often their extensive efforts to write and post an article about a brand and its products on their blog are not rewarded – as the customer reading the article will often be savvy enough to visit a cashback or voucher code site to get a deal just before purchasing – alas taking the last click away from the blogger! Not only that, customers tend to be near the beginning of the buying process when researching brands and products by reading blogs and articles – therefore the likeliness of that person buying the product is far from a guarantee.
At its core, affiliate marketing is a digital marketing channel where third parties, such as those listed above, promote brands for a commission which is earned by securing this last click conversion. The complexities within it are great and intriguing. To learn how affiliate marketing might work for you and your business, please visit our Affiliate Marketing service page or feel free to contact us at Optimus Performance Marketing via phone, email or social media.