In an article in PerformanceIn, Partnerize Customer Success Manager, Kelly Guerin runs through the current trends of partner marketing and how retail partnership is driving more performance and revenue through the channel. Here is an excerpt from her piece:
If you say the words “partner marketing” to a group of marketers, chances are they’ll think first of affiliate programs with cashback, coupon, and comparison sites. While it is true that affiliate represents an important segment of the partner marketing channel, the partnership category is actually far larger than a traditional affiliate, encompassing new arenas like influencers, bloggers, performance deals with leading media companies, channel partnerships, and even strategic brand alliances. In short, partnership is enormous and keeps growing every day.
Further, the channel has a long history, from its conception online 25 years ago with the launch of Amazon’s official affiliate program, to where we are today. The channel has become a significant revenue contributor for a number of leading Fortune 500 companies. To understand where partnership is going, you need to understand where it began, and how it has evolved in the past two decades for retail brands.
The roots of retail partnership
Digital performance partnerships first became a “mainstream” channel in the late 1990s when e-commerce became widespread and big brands started to allocate significant spend to digital. Amazon’s affiliate program captured a great deal of business attention, and it wasn’t long before major brands were pouring money into these cooperative selling arrangements. Today, both established Western retail brands and digital unicorns like Alibaba rely heavily on this channel for significant portions of their revenue. In a recent survey that we conducted in partnership with WBR Research, we found that 54% of companies are now driving more than a fifth of their revenue through performance partnerships.
Historic hindrances to growth
Partnerships are marvelously efficient, which begs the question: Why isn’t the channel even bigger than it is today? Part of the reason for that is that in the early days of the first internet bubble, bad actors swindled a host of companies via the partnerships and affiliate channel. In that era, many partners were compensated based on the cost-per-click (CPC) model, and fraudsters quickly developed ways to simulate billions of clicks. Further, the leading networks and solutions providers operated opaquely, so advertisers had little insight into where and when their products were being marketed.
The emergence of big partners
Affiliate started off with standard deals on a cost-per-sale basis. Partners typically were content sites and small publishers and bloggers. As transparency grew and increasing numbers of companies began to spend serious money behind CPA programs, a set of major partners emerged that captured a large share of total spend and leveraged technology for optimization, segmentation, and other tactics to improve results.
Many of these companies attracted audiences by delivering great value; coupon, cash back and comparison publishers led the way here.
Data-driven marketing takes centre stage
Over time, technology and innovation have transformed the channel to incorporate players that utilize data and even AI, like meta-data sites and aggregators. From there, our industry began to penetrate areas like retargeting and personalized creative, where data on user browsing can have a dramatic impact on targeting and messaging effectiveness.
Read the rest of the article in PerformanceIn.