Since its inception, affiliate marketing has largely been a coupon-focused channel. As a result, this has created a stigma around affiliate with less savvy affiliate marketing programs relying on this tactic as their core focus. This has led to numerous programs emphasizing coupon redemption, aiming for the highest Return on Ad Spend (ROAS) possible. Yet, this approach overlooks the fact that a lower ROAS can actually generate substantially more revenue. Ultimately, brands who rely on couponing today are leaving money on the table by limiting the ability to scale their programs. At MERGE, we believe this is the wrong approach, and instead subscribe to the idea that affiliate should be a customer acquisition and brand-building channel first.
Of course, this isn’t to say that coupon sites don’t provide some measure of value. However, if you search for your brand, plus “discount,” “deal,” or “coupon,” you will find a list of all the coupon sites showing up in the organic results, and sometimes paid results. From our point of view, paying high commissions for this approach isn’t likely to help your brand.
Instead, we encourage clients to pay very little commissions to coupon sites, focusing our efforts on brand-building through content sites, loyalty sites and influencers. Reinvesting the savings from commissions that would have been paid to coupon sites and applying them to content sites and influencers can have dramatic effects for your program and your brand.
Many of the brands MERGE has partnered with have 50% to 60% of their program revenue coming from coupon sites, but only 5% from content sites and influencers. By applying a dynamic commission structure that focuses on acquiring new customers, combined with intimate knowledge of the content and influencer space, most clients are able to lower coupon sites to ~20% of program revenue and increase their content site revenue to between 30% and 50%. This not only helps decrease your brand’s reliance on coupons while increasing your AOV, but it also has been shown to bring in significantly more new customers. In fact, some brands have seen their percentage of new customers increase from less than 40% to above 75%.
This approach may cost brands a little more at the onset, but in our opinion, it is a correction on the old model of $15+ ROAS goals for affiliate marketing. By taking into account your brand’s profit margins and ROAS goals, MERGE can demonstrate the increased revenue for brands by decreasing your ROAS – even nominally.
FAQs:
1. How can a brand integrate influencers and content sites into its existing affiliate marketing strategy without disrupting current operations?
Integrating influencers and content sites into an existing affiliate marketing strategy requires a nuanced approach to ensure a smooth transition. Brands can start by conducting thorough research to identify influencers and content creators that align with their target audience and brand values. Collaborating on small-scale campaigns or projects can serve as a testing ground to assess the compatibility and effectiveness of these new partnerships. Communication is key during this process; keeping existing affiliates informed while gradually introducing new types of content can help maintain harmony within the affiliate program.
2. What specific steps are recommended for brands looking to transition from a heavy reliance on coupon sites to a more diversified affiliate marketing strategy?
Transitioning from a heavy reliance on coupon sites to a more diversified affiliate marketing strategy involves several strategic steps. Initially, it's important to evaluate the current performance of the affiliate program to understand the contribution of coupon sites versus potential opportunities with content sites and influencers. Brands should then redefine their affiliate marketing goals to prioritize customer acquisition, brand building, and long-term value over short-term gains. Implementing a dynamic commission structure that rewards high-value activities and contributions can encourage a broader range of affiliates to participate. Throughout this transition, monitoring performance and adjusting strategies based on data-driven insights will be essential for success.
3. How can a brand ensure that an increased focus on content sites and influencers translates into sustainable long-term growth, rather than just a temporary boost in revenue?
Ensuring sustainable long-term growth with a focus on content sites and influencers requires a commitment to building genuine relationships and continuously optimizing strategies. It's important for brands to work closely with their partners to create authentic content that resonates with their audience. Investing in quality content and influencer partnerships can enhance brand awareness and loyalty, leading to a more robust customer base. Regularly analyzing performance metrics, such as customer acquisition costs, lifetime value, and conversion rates, can help brands iterate on their strategies and make informed decisions that contribute to lasting growth. Additionally, staying abreast of trends in content creation and influencer marketing can provide fresh ideas and opportunities for innovation within the affiliate marketing program.
Aiming to stay on the cutting edge and maximize your brand’s affiliate marketing efforts? Connect with MERGE’s team of performance marketing experts today!
