Affiliate marketing has always been a performance-driven channel. But today’s market is asking marketers to rethink what performance really means. Rising CPCs, declining EPCs, increasing customer acquisition costs, and changing customer journeys are creating significant pressure on both brands and publishers. At the same time, AI is reshaping discovery, attribution is becoming more complex, and finance teams are demanding clearer proof of profitability.
During a recent industry panel featuring experts from Partnerize, Expedia Group, GrowthHQ, and Liberty London, one message stood out: Success in the new affiliate economy isn’t about spending less—it’s about spending smarter.
Here’s what affiliate marketers should be thinking about.
Why More Traffic Doesn’t Always Mean More Profit
One of the biggest challenges discussed was the growing disconnect between scale and profitability. Many affiliate programmes continue to see traffic and conversion volumes increase, yet earnings per click (EPC) remain under pressure.
The reason? Customer journeys have become significantly more complex.
Consumers now interact with more touchpoints before making a purchase. AI search experiences, Google’s AI Overviews, social platforms, and multiple publisher interactions mean a single conversion may involve far more clicks than it did just a few years ago.
As those journeys lengthen, value becomes spread across more interactions, making traditional performance metrics less reliable indicators of success.
Rather than asking how many conversions did we generate, marketers are increasingly asking: which touchpoints actually created value?
Rising CPCs Require Smarter Investment
Paid search inflation continues to squeeze marketing budgets, but the panel argued that rising CPCs shouldn’t automatically trigger reduced investment.
Instead, brands should become more selective.
Successful programmes are increasingly:
- Investing in high-intent audiences rather than broad reach
- Using fixed CPC partnerships where appropriate
- Evaluating campaigns against profit rather than traffic alone
- Measuring blended ROAS across multiple channels
For Liberty London, understanding profitability at both product and publisher level allows the team to invest confidently, even as acquisition costs rise. The takeaway is clear: Rising CPCs are only a problem if they aren’t delivering profitable customers.
It’s Time to Rethink Compensation Structures
One of the strongest themes throughout the discussion was that many affiliate programmes still operate with outdated commercial models. A single commission rate for every publisher no longer reflects the different roles partners play throughout the customer journey. Instead, brands should map their affiliate ecosystem across the full funnel.
For example:
- Upper-funnel content partners introducing new audiences
- Mid-funnel review and comparison sites building consideration
- Lower-funnel cashback, loyalty, and voucher partners driving conversion
Each contributes differently and should be rewarded differently. Rather than optimising for the cheapest CPA, leading programmes are aligning commercial models with the actual value each partner creates.
Full-Funnel Affiliate Marketing is Becoming Essential
Affiliate marketing is increasingly moving beyond a last-click mentality. GrowthHQ shared how brands are investing more heavily in content publishers, influencers, and AI-visible websites to build awareness earlier in the customer journey. At the same time, traditional conversion-driving publishers remain critical.
The opportunity isn’t about choosing between the upper and lower funnel. It’s ensuring every stage works together. Brands that continue to invest almost exclusively in bottom-of-funnel publishers risk exhausting existing audiences rather than generating new customer demand. A healthy affiliate programme balances acquisition with conversion.
AI is Changing Discovery—But Trust Still Matters
Artificial intelligence featured heavily throughout the discussion. Consumers are increasingly discovering brands through AI-generated summaries, large language models (LLMs), and conversational search. That means publishers with strong content visibility are becoming more valuable than ever.
However, the panel also highlighted the importance of trust. For complex purchases, particularly travel, customers want reassurance before committing. AI may help consumers research destinations or compare products, but human expertise remains essential when purchases become emotional, expensive, or complicated.
One panellist summed it up perfectly with a simple framework:
Human to Machine, back to Human
Humans provide the strategy. AI improves efficiency. Humans provide the judgment.
Incrementality Needs Better Conversations
Few topics generate more debate in affiliate marketing than incrementality. Rather than treating it as a single measurement, the panel encouraged brands to view incrementality as an ongoing collaboration among advertisers, publishers, agencies, and analytics teams. The most successful programmes aren’t avoiding difficult conversations.
We all need to embrace them by:
- Sharing performance data openly
- Designing meaningful incrementality tests
- Agreeing on success metrics before campaigns launch
- Understanding the role each publisher plays within the wider marketing mix
Transparency builds trust, and trust makes better commercial decisions possible.
Diversification Reduces Risk
Another key takeaway was the importance of diversifying affiliate programmes. Whether that’s working with multiple content publishers, several CSS partners, cashback sites, loyalty programmes, or influencers, relying too heavily on a single partner type creates unnecessary risk.
Diversification helps brands:
- Reach new audiences
- Reduce dependency on individual partners
- Improve resilience during market changes
- Unlock new growth opportunities
Just as investors diversify portfolios, affiliate marketers should diversify partner strategies.
Long-Term Partnerships Win
Perhaps the biggest lesson from the discussion wasn’t about technology or attribution, but relationships. The brands and publishers best positioned to navigate increasing margin pressure will be those that build transparent, collaborative partnerships. That means moving beyond fixed rate cards and transactional conversations towards shared goals, shared data, and shared accountability.
Looking Ahead
Affiliate marketing is entering a new phase. Profitability, incrementality, and long-term customer value are becoming more important than simple conversion volume. As AI reshapes discovery, customer journeys become more fragmented and acquisition costs continue to rise, affiliate programmes must evolve alongside them. The affiliate businesses that thrive over the next few years won’t necessarily be those spending the most. They’ll be the ones that embrace full-funnel thinking, reward partners based on value, use data to inform decisions, and build lasting strategic relationships.
Explore all of the full-length recorded panels from Partnership Day London 2026.