If you are deliberating which digital marketing strategy to choose for your online business, take a moment to think about your own behaviour as a customer. Whenever you have to buy a product, what is the first thing you typically do?
After identifying your budget and key product requirements, you take recommendations from your social circles and check out the latest product reviews (both video and text). You might even make a post on your social media profile asking people for product recommendations, opinions and options to buy. Next, you will compare prices between different products and look out for the best deal and cashback to identify the suitable value proposition before finalising the purchase.
Why do consumers go through such an extensive research process to buy something? The answer is simple: recommendations and information which come from trusted sources have a much deeper impact on the purchase decision than you’d think. The provision of best offers and savings on the purchase give consumers a satisfactory impetus to buy the product.
The digital word-of-mouth: Why affiliate marketing is effective
This is why affiliate marketing remains a key opportunity for marketers to target potential customers. It allows brands to reach out to their audiences through a vast array of new-age publishers and formats. Ads are delivered to target consumer demographics through relevant platforms in a captive, contextual environment. Another major benefit of choosing affiliate marketing is the online boost that businesses get. Affiliate links help brands to achieve higher search engine rankings, which in turn increases their online traffic to enhance lead generation and conversion.
Affiliate ads are also tracked in real-time for better transparency and visibility, with pay-outs linked to certain KPIs; payments are only made to affiliates after the predefined criteria are met. Affiliate networks also leverage anti-fraud technology to curb digital ad fraud and ensure that only genuine audiences interact with branded ads. Furthermore, in-house tracking technology automates tracking, management, communication and reporting to ensure that brands don’t have to maintain an in-house team to do these tasks.
This presents a stronger value proposition that helps advertisers drive greater brand salience and better lead generation – especially ahead of peak sales periods – for higher sales, conversions, and earnings. The differentiated pricing models (including CPA, CPS, CPC, CPI, CPL, and CPV etc.), as well as product feeds, auto-verification, and re-engagement opportunities facilitated by top affiliate networks, also allow brands to realise the maximum value for their advertising spends.
Hand-in-hand: The convergence of influencer and affiliate marketing
What about influencer marketing, the most talked-about digital marketing trend of recent years – and how does it compare with affiliate marketing? The question becomes rhetorical in light of the recent developments in the domain.
Affiliate networks have traditionally partnered with coupons/cashback websites, deal/price comparison websites, lead SMS & content websites to fulfil the objectives of the brands. Domain-leading players such as Admitad, however, are going a step further by integrating the two strategies and bringing influencers such as online blogs, content marketers, and vlogs on board as publishers and providing a much better range of options to the affiliate industry.
This increases the reach and engagement for brands and gives them access to a much wider pool of affiliates to work with to drive better business outcomes. As per recent reports, recommendations on social media platforms such as Instagram are estimated to influence almost 75% of online purchase decisions, while 72% of consumers are more likely to try out a product they’ve been referred on social media. Customers – particularly in India – also have a tendency to check for deals, discounts, cashbacks, and other offers before making their purchases. As a result, traditional affiliate marketing channels drive around 20% of the overall e-commerce GMV in India, making them an important part of the online transactional value chain.
The convergence between affiliate networks and influencers also eliminates three of the biggest pain points for advertisers when it comes to influencer marketing: that of reliability, transparency, and measurability. Through tools such as cross-device/browser tracking, third-party tracking, ad performance analysis and product feed integration, affiliate networks ensure that advertisers can dive deeper into the actual impact of their influencer associations on end-consumer purchase behaviour. Since this information is available in real-time, it introduces a level of transparency that has been missing in influencer marketing and presents a clear, well-defined RoI to marketers. Influencer associations through affiliate networks are also more cost-effective, in addition to being more manageable and personalised.
Influencers, on their part, get access to numerous brands which gives them a great choice of offers and ability to monetise their online audience. The seamless technological support offered by affiliate networks can also help them augment their business performance and adopt industry-leading best practices.
As can be seen, both influencer and affiliate marketing have their place in the digital marketing value chain. Leading players in the affiliate marketing space are already turning influencers into new-age publishers for brands to partner with, giving the former a new monetisation model while adding more options to the digital marketing arsenal of the latter. Brands should also begin to align themselves with this changing dynamic and look at the two as complementary – and not competing – drivers of the same end-goal.
Authored Article by Neha Kulwal, CEO -Admitad