Why affiliate marketing is a growing opportunity for advertisers

A report finds over 80% of advertisers are devoting at least 10% of their marketing budgets to the strategy

Affiliate marketing is a growing opportunity for advertisers, but is it right for you? 

A new report finds that the perception around affiliate marketing is shifting — and advertisers and publishers alike are seeing new value in the strategy. 

To better understand the state of affiliate marketing, Rakuten Marketing commissioned Forrester Consulting to conduct research on Networks Help Drive Affiliate Marketing Into the Mainstream” report, which found that the market for affiliate marketing is expected to increase from $4.2 billion in 2015 to $6.8 billion in 2020.

The report found:

• A high level of interest in affiliate programs: More than 80% of advertisers and 84% of publishers surveyed ran an affiliate program, and more than 80% of advertisers devoted 10% of their marketing budget to affiliate marketing.


• Affiliate marketing was part of the entire buying process: 83% of surveyed marketers targeted consumer during the discovery and awareness phase, 79% during conversion or purchase, and 79% used affiliate marketing to create ongoing customer engagement.


• Marketers are measuring the success of affiliate programs: 80% of surveyed marketers tracked desktop and mobile sales, 66% tracked catalog-driven sales, and 57% tracked brick-and-mortar sales.


• Advertisers use affiliate marketing to develop relationships: 83% use affiliate network dashboards to recruit partners and 79% attend event hosted by affiliate networks. More than half of publishers use network-provided platforms to manage affiliate efforts.

“The way consumers discover and take in information has shifted drastically over the years, while their level of sophistication and expectation toward advertisements has increased,” Adam Weiss, general manager and senior vice president of Rakuten Affiliate Network, told Marketing Dive in an interview. “Presenting content that drives real value in a trustworthy way can be a significant challenge for brands and content creators, but this challenge can be solved with a smart affiliate marketing strategy.”

Affiliate programs are becoming part of content marketing

Content marketing is a key component of any digital marketing strategy, and affiliate programs are one way marketers are meeting the challenge of creating content that drives real value for customers and delivering it in a trustworthy way. A large part of this is the perception of affiliate programs getting away from direct response and couponing, and being seen more as a way that advertisers can get information out to consumers in a relevant environment.

In the report, an unnamed vice president of sales at a U.S. online publisher explained the new mindset toward affiliate programs: “The biggest positive change I’ve seen has been the change of perception around affiliate, from spammy, bottom-feeder sites to ones like ours, where we’re focused on a great user experience. Two years ago, a CMO wouldn’t go to his board and say, ‘We’re doing great in affiliate!’ but now they see [it delivering].”

Illustrating the value of the programs, almost 90% of marketers surveyed in the report said that affiliate marketing was important or very important to their overall marketing strategy.

One aspect of affiliate programs that can be attractive for advertisers is that most costs associated with affiliate marketing are paid out on a performance basis, including placement, commissions, network fees, and paid bonuses.

Conclusions 

The Rakuten and Forrester report came away with three takeaways about the state of affiliate marketing:

1. Affiliate marketing is an important tool for both advertisers and publishers. A key reason for this is the rise of content marketing as a major aspect of digital marketing. The value of affiliate programs can be seen in the data point that more than 80% of advertisers and publishers alike are tapping into affiliate marketing. Marketers do so in order to find differentiated marketing content, and publishers to drive ad revenue on their websites.


2. Affiliate networks play an important role in affiliate marketing programs. Affiliate marketing has become more sophisticated and complex, and because of that advertisers and publishers are turning to affiliate networks to manage their programs. Networks help advertisers find new affiliate partners as well as help plan, execute and measure affiliate programs.


3. Improving measurement is important to unlocking affiliate program potential. Although advertisers are using forecasting and marketing mix tools to analyze and optimize affiliate programs, the study found fewer are making use of advanced attribution tools that provide a multi-channel view into the impact of their affiliate programs.

The report offered marketers a final thought on the state of affiliate marketing: “Affiliate marketing, once regarded more as a tool to drive consumers to the purchase event, is now viewed as a powerful channel for consumer discovery that leads to brand engagement and incremental sales at compelling ROIs. Advertisers are increasingly relying on the affiliate channel to broaden their brand exposure with relevant context. More publishers are taking the opportunity to complement their revenue with advertiser support that delights their readers.”

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Top Image Credit: Fotolia

Why affiliate marketing is a growing opportunity for advertisers

Facebook Inc's Fastest-Growing Group of Advertisers Might Surprise You

Source: Facebookbrand.com

It’s no secret that Facebook (NASDAQ:FB) has quickly turned itself into a digital — and particularly mobile — advertising juggernaut. The company’s second quarter ad revenue was up 43% year-over-year. What’s more, its share of the overall digital advertising market is expected to grow from 10.6% last year to more than 16% by 2017, per eMarketer.

It has been able to do that by leveraging its huge user base of nearly 1.5 billion people and all the information they provide as they share experiences, photographs, and opinions, to target the right ads at the most likely prospective customers.

But those advertisers seeking to sell clothes, cars, and concert tickets to eager consumers are only part of Facebook’s advertising base. The other group of advertisers, businesses courting other businesses, is actually the company’s faster area of growth — and not by a small margin.

But before we get into the numbers, let’s take a quick step back.

B2B is twice overall growth
Based on research from AdRoll that surveyed 1,000 marketers, it seems the area of advertising that most interests these businesses on Facebook is retargeting (and it’s important to note that retargeting is AdRoll’s bread and butter). You’ve all seen these ads — turn to Google to find something you’re looking for, visit some sites that sell related products, and then later find yourself on a different site looking at ads promoting that earlier business or the products you browsed. Sometimes, it seems a bit creepy, but it also can be very effective.

Overall, spending on retargeting ads on Facebook was up 31% year-over-year, according to AdRoll. But growth in spending by companies dealing in business-to-business, or B2B, sales was up by nearly twice that at 61% over the prior year.

This increased spending is no coincidence. In late 2013, Facebook rolled out a platform it calls “Custom Audiences” that enables businesses to effectively retarget potential customers and reach them across different devices. While the company doesn’t generally address B2B specifically, it’s an important segment of the market.

Tapping a big market
B2B companies will spend about $77 billion on digital advertising and marketing this year. Facebook, with annual revenue of about $12 billion, will surely want to continue growing its share of that market.

AdRoll President Adam Berke talked with AdWeek’s Inside Facebook about the growth of B2B retargeting on the platform and why it’s a big area of growth: “[I]t’s very hard to find B2B decision makers and CIO types and people who are making those types of buying decisions for their companies,” he noted.

Unlike the store that’s trying to sell you new shoes, the B2B companies are using Facebook not to make direct sales but to appeal in other ways. Using analytics, the businesses look to tailor what they offer the prospective client. For example, one who had been searching for information might be offered a white paper or other material. Another who had gone deeper into the buying process might be offered a free trial.

One step in a longer sales effort
The actual conversion to a sale typically takes place outside the Facebook platform, but because Facebook had proved so valuable in reaching the customer, the B2B companies are willing to pay to keep them in the loop.

By adding Facebook ads, businesses were able to nearly double the reach of their ad impressions, AdRoll reported. What’s more, the advertisers found they were spending about one-third less in click costs for each acquisition they made, a sign that the ads were proving more effective.

It’s no Oculus Rift but …
The growth in B2B advertising is a further sign of why Facebook’s platform has been able to build such a commanding position in the digital and mobile ad markets. It’s become a place where people spend a greater part of their lives each passing year. That’s no longer limited to leisure time — it includes time at work, and it includes those people who are in positions of making purchasing decisions for the companies they work for — or own.

The B2B market won’t generate a lot of buzz around earnings. It just isn’t that sexy for a company with so many headline-worthy projects in the works, but it does provide Facebook with a significant avenue of revenue growth.

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John-Erik Koslosky owns shares of Facebook and Google (A shares). The Motley Fool owns and recommends Facebook, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Facebook Inc"s Fastest-Growing Group of Advertisers Might Surprise You

Facebook rolls out new ad products aimed at TV advertisers

Facebook Inc introduced a slate of new advertising products on Sunday, most of which are aimed at luring television advertisers onto the 1.5-billion user social network.

The advertising options, most of which will also be available on Facebook-owned Instagram, are designed to take advantage of the social network’s strengths on mobile devices.

It has the world’s most popular smartphone app and generates more than three-quarters of its USD 10 billion-plus in annual ad revenue on phones.

Facebook is trying to convince advertisers, especially those who use video, that their dollars will be better spent on mobile platforms rather than on TV as users, especially millennials, spend more time on their phones than watching television.

The rollout of the new products come ahead of New York City’s 12th Advertising Week, which runs from Monday to Friday and gathers the world’s largest advertisers and companies. Facebook also announced on Sunday that it has 2.5 million active advertisers in total, up from 2 million in February.

Digital video advertising spending is growing rapidly, projected to increase 13 percent to nearly USD 15 billion by 2019, according to eMarketer. Television ad spending, by comparison, is expected to grow 2 percent in the same time period to USD 78 billion.

“Facebook is listening to the ad community and giving them what they are looking for,” said Debra Aho Williamson, social media marketing analyst with eMarketer. “Does Facebook want video ad dollars? Yes.”

On television, advertisers can buy ads based on how many people they will reach, an approach Facebook has adopted to ease the transition between television spending and digital spending.

In addition, it can target highly specific audiences, such as women aged 18 to 35 years old who have shopped on a specific website, which TV cannot do.

Among the new products are “brand awareness” ads, which aim to reach a large number of people to promote a company’s name and brand, such as Coca Cola.

Advertisers will also be able to poll users on mobile phones about whether they saw an ad — a feature that used to be available only on desktop computers — and they can use a format that allows them to display multiple videos at once that users can scroll through.

“We want to be the single-most important platform for all businesses,” said Carolyn Everson, Facebook vice president for global marketing solutions.

Facebook rolls out new ad products aimed at TV advertisers

Facebook Tries Out New 10-Second Video Ad Option, Offering Advertisers Cost-Per-View Rate

Facebook is mixing up its video ad cost options, testing a new way to charge advertisers that allows them to pay for a video ad only if it has been viewed for a full ten-seconds.

According to a report from Adweek.com, the new video ad cost structure is a part of a global test being tried out on big-brands that currently use Facebook’s Power Editor and API tools for campaign management.

While Facebook uses a three-second rule to count video view metrics, advertisers have had to pay for a video ad on the social network as long as it shows up in a News Feed. Adweek says now advertisers have the option to purchase the new 10-second video ads that are based on a cost-per-view rate.

“Now, advertisers can start paying for videos with a cost-per-view rate that kicks in after a user watches for 10 seconds.” -AdWeek

A Facebook spokesperson told the Wall Street Journal that the 10-second ads are not the best way to invest in Facebook advertising, but the company wanted to give advertisers more ad-buying choices: “We don’t believe it’s the best option in terms of capturing the best value and brand objectives marketers care about, but we want to give them control and choice over how they buy.”

The Wall Street Journal reports Facebook’s 10-second video ads are being sold via auction, adding that there’s a possibility the new ads cost more than other Facebook video ads.

Reports of Facebook’s new 10-second video ads come just a day after the company announced it is adding more signals to how it ranks videos in a user’s News Feed.

In addition to how many likes, comments and shares a video receives, Facebook is now paying attention to whether or not a video’s audio has been enabled or if a video has been expanded to full-screen mode, along with other actions that indicate interest.

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About The Author

Amy Gesenhues is Third Door Media’s General Assignment Reporter, covering the latest news and updates for Marketing Land and Search Engine Land. From 2009 to 2012, she was an award-winning syndicated columnist for a number of daily newspapers from New York to Texas. With more than ten years of marketing management experience, she has contributed to a variety of traditional and online publications, including MarketingProfs.com, SoftwareCEO.com, and Sales and Marketing Management Magazine. Read more of Amy’s articles.

(Some images used under license from Shutterstock.com.)

Facebook Tries Out New 10-Second Video Ad Option, Offering Advertisers Cost-Per-View Rate

Advice Points for Maintaining Communication with Advertisers

As a publisher it’s vital that you maintain strong communication with your advertisers – without them you’re unlikely to succeed long-term in affiliate marketing. Quite often, an ‘’inactive’’ publisher i.e. someone who doesn’t respond to various forms of communication, can be removed from an advertiser’s programme during an audit. With so many new publishers entering this industry on a daily basis (Affiliate Window sees 30 new publisher signups a day) you need to ensure that you’re not forgotten about and remain at the forefront of advertiser’s minds.

Here are some top tips to ensure you maintain communication with your advertisers:

Don’t have a relationship with a faceless programme

As a publisher you need to be proactive. Although this varies by advertiser, quite often they expect you to come to them with promotional opportunities and an interest in promoting their brand. Get to know the point of contact, perhaps have an introductory phone call or try and meet them at an industry event. Just being able to put a face to a name can really benefit your relationship in the long-term.

Make communication personal

As publisher teams get larger and larger, response time becomes more important from the advertiser’s perspective. They’re far more likely to communicate with a particular person they have regular dealings with on the publisher side rather than through an affiliates@ e-mail address so try and provide that personal point of contact, particularly for your bigger brands. Even if you’re a one man band, having your name included in your e-mail address comes across a lot friendlier and more approachable versus a generic address.

Allow your phone number to be displayed within your signature when contacting your advertisers so that they can get hold of you quickly if they need to. There is often a worry that you’ll be overwhelmed with phone calls but there are significant benefits to displaying this information. Firstly, it helps build credibility especially if you’re a new publisher and the advertiser hasn’t worked with you before. Secondly, it shows that you’re available and willing to answer any question the advertiser may have. Thirdly, if for some reason the information on your site is wrong, if the logo is out-of-date for example, they’ll be reassured to know that there is a quick form of communication to get it amended. If your site goes down or information is displayed incorrectly it’s also likely they’ll be the first to notice.  Fast feedback cuts down recovery time on your end and enables the advertiser to trust that if things do go wrong, someone is quickly on hand to fix them.

Maintain a 24 hour turnaround time

Always try and maintain a 24-hour response time. If an advertiser has a last-minute exclusive code, they’re far more likely to go to the publisher they know is proactive and will respond to say that they can provide extra promotional coverage at short notice in return.

Monthly calls and quarterly meetings to discuss performance

Whilst it’s not always practical to meet all of your advertisers as regularly as you would like to, it’s definitely worthwhile meeting your top ten on a quarterly basis whenever possible. A phone call is a good alternative method to keep in touch if a face-to-face meeting isn’t possible. Presenting to an advertiser on what has worked well over the last quarter and ways to continue this growth is really important information they’ll be keen for you to share. Additionally, providing them with insights on what has worked well with their competitors is invaluable. Case studies for both situations encourages communication as you’ll come up with ideas together on what to try next.

Send advertisers newsletters or summary e-mails

Ensure advertisers are kept up-to-date with any developments your end. As a publisher it’s likely that you’ll have regular new promotional opportunities, perhaps a themed newsletter around Mother’s Day or Christmas and without informing your advertisers its coming up they’re not going to be aware of this. This newsletter is your chance to maintain communication with your advertisers so add a bit of personality to it. Add in something that will encourage advertisers to respond in some way so it opens up two-way communication.

Within your newsletters you can also feature ‘success stories’ of a promotion that has worked in the past month. This will make that advertiser feel a sense of loyalty to you and should in turn encourage ‘competitors’ of theirs to get involved with you and replicate this for their own success story.

Keep advertisers up-to-date

Ensure your advertisers know if you’re going to change your site in any way which may affect them. Additions such as social codes to a site or installing a toolbar can have differing reactions from advertisers, so it’s best to negate this by giving plenty of advanced warning and allowing them to voice their opinions to you. Again, by allowing them to share their thoughts you’re forging a strong relationship for the long-term.

What are your advertisers key KPI’s

At a basic level you should be aware of what your advertisers key KPI’s are. Having this knowledge is vital for good communication as you can tailor your promotions around them and follow up with case studies focusing on these indicators. Did you increase AOV monthly and if so, by how much? Was it better than this time last year? And what can be done to further improve this next month?

Subsequently, if your advertisers are looking to trial multi-attribution for example or make a key change to one of their KPI’s, you need to make sure you’re on top of this as this will put you ahead of  competing publishers and further showcase your proactive attitude to the advertiser.

Keep up-to-date with Industry regulations

With the IAB as our governing body, there are always changes being made to the industry regulations. Over recent years changes such as how you display voucher codes on site has provoked a lot of debate therefore as a publisher it’s vital that you are open and communicative with your advertisers and abide by these guidelines. Remember that affiliate marketing only makes up a small proportion of an advertisers overall digital mix and you don’t want them putting more resource into other channels if they’re unsure guidelines are being adhered to by their publishers.

Hold advertiser days

Ask your network to host an advertiser day for you. Particularly if you’re based in an area outside of London or where few of your advertisers are, having a whole day where you can meet them for back-to-back meetings is a great way to improve and maintain communication with your advertisers. This setting is not only social but also creates learnings and key takeaways you can use to follow up with advertisers at a later stage.

Attend industry events

Industry events allow publishers to see a number of advertisers in one go. It enables you to communicate in a relaxed manner whilst in a working environment. Annual industry events or smaller, more frequent events hosted by networks are particularly beneficial for publishers who live a distance away from where their top advertisers are based. Perhaps you can take your largest brand out for dinner beforehand to build up the personal relationship. Whilst it’s important to form a professional relationship, getting to know what they enjoy doing away from the office can prove extremely valuable. After all, affiliate marketing is based on relationships and building these along the way is an added bonus.

Additionally, if your advertisers hold press days then it is worthwhile trying to attend these, as having the additional knowledge of their products and showing interest in their brand is likely to go down very well. It opens up further dialogue you can have with the retailer, as you can provide your feedback on the day and feature particular products you saw on your site.

Be transparent

If you’re new to the industry or are doing something slightly different from traditional publishers then being transparent is extremely important, particularly in the early days of forming relationships with advertisers. If they require referral URLs or what to know how you’re promoting them then it’s advisable to readily share this information with them. With so many publishers around you don’t want them deciding to work with your competitor simply because you provided inadequate information.

Ask for feedback on your performance

Finally, it’s always worth remembering that strong, constant communication between parties is integral to the success of any business and this is particularly important for a business whose success is built on relationships. However, this does need to be two-way so encourage this by asking advertisers for feedback. What do they think is/isn’t working? Can they provide you with a better discount, do their offers do well on particular days of the week or times of the year? This two-way insight is a great foundation on which to maintain communication with your advertisers through the affiliate channel.

Advice Points for Maintaining Communication with Advertisers

Now With 2 Million Advertisers, Facebook Gains a Foothold With Small Businesses

Facebook now has 2 million advertisers, a milestone CEO Mark Zuckerberg announced today in a video post on the social network. Zuckerberg and COO Sheryl Sandberg thanked small-and-medium-sized businesses (SMBs) and entrepreneurs for jumping on board with the platform, helping it attract 500,000 new advertisers in the last year.

“Millions of businesses like yours are using Facebook to connect with their customers and reach the world,” Sandberg remarked in the clip.

Just a few years ago, Facebook was an unknown quantity when it came to local advertising for SMBs—the platform was perceived to be more for direct e-commerce players and big brands. That small-business challenge appears to have been met.

“What does stand out here is that Facebook is making it easier to advertise, particularly for small- and medium-sized businesses,” said Rebecca Lieb, a Facebook analyst. “Much like search engines developed tools 10 years ago to serve targeted ads, Facebook is doing the same and removing a lot of friction for these businesses.”

Reaching 2 million advertisers is yet another indication of Facebook’s growing dominance in digital, getting more businesses to market to its 1.4 billion users. The social network is changing the face of digital advertising much the way search redefined the marketplace more than 10 years ago, according to Lieb and other industry watchers.

Today, Facebook also launched a mobile app to help businesses manage marketing campaigns. And it’s these types of “turn-key” products for small businesses, which are often less socially savvy, that are making it possible to advertise on Facebook, Lieb said.

“Targeting, segmenting, day-parting—this is not their core competency,” she said, referring to the thousands of small businesses that have to learn a whole new marketing language for the social network. “Facebook has to go into local markets and show them this is how you as local advertisers leverage the platform.”

The fact is that to reach fans on Facebook, big brands and small businesses have to pay for promoted posts. There is no such thing as free reach, according to Jordan Kretchmer, CEO of social marketing software firm Livefyre.

“Facebook has become one of the best paid media channels out there,” Kretchmer said. The social network is developing the ads, the networks, the tools and data collection capabilities that hold promise for marketers to reach consumers in the most targeted way possible, online and via mobile devices.

However, its total control also creates the risk that businesses will become overly reliant on Facebook to reach audiences.

Big brands have already reacted to Facebook’s dominance by investing in their own data and audiences, like Taco Bell building an app last year to own access to its user base, Kretchmer said. “If Facebook changes something tomorrow, these brands can jump away from it and not miss a beat,” he said. “Small businesses are at a disadvantage. They are beholden to pay Facebook to drive traffic.”

Last quarter, Facebook ad revenue was $3.6 billion, an increase of almost 60 percent year over year. It is the No. 2 digital ad business, still far behind Google, but comfortably ahead of companies like Twitter and Yahoo.

Of course, it also has rivals like Snapchat, coming up today much like Facebook was 10 years ago. That’s why Facebook bought Instagram and WhatsApp, which have more than a billion users combined.

“Marketers flock to media that collects the most users, that’s just how it is,” said Nate Elliott, a Forrester researcher. So Facebook’s size is drawing the biggest brands, which are having the most success at the moment marketing there, he said.

The large companies have the advantage because they have their own data, and Facebook can be stingy when it comes to sharing its data.

“It’s perverse. Facebook knows more about customers than anyone ever, yet marketers are forced to bring their own data to the party,” Elliott said.

Marketing experts said the data question is the next one Facebook has to address with small businesses. Kretchmer said companies like his Livefyre are developing ad-targeting and data tools that have only been accessible to large brands so far.

“Getting to relevancy is more difficult for smaller businesses than larger ones,” said Debra Aho Williamson, eMarketer’s principal analyst. “For one thing, they don’t tend to come into Facebook with their own large data sets, as do many of the larger companies that advertise on Facebook. This presents an opportunity for Facebook to educate small businesses about the best way to create and target ads to achieve relevancy.”

Now With 2 Million Advertisers, Facebook Gains a Foothold With Small Businesses