Affiliate Marketing

Grant Leboff: Dave, one of the things that I think, a lot of people have heard the term, but are a bit confused by it, is affiliate marketing. How can that be effective for businesses?

Dave Chaffey: I’d say affiliate marketing is not actually relevant for most business if you go for the tight definition of it which, for me, it’s a commission based arrangement. The classic example is when Jeff Bezoz of Amazon set up affiliate marketing. It was actually at a dinner party and someone said to him why don’t you pay other websites to drive visits to yours? He thought great, I’ll do that, but I’ll only pay them a commission when I actually sell. It’s a fantastic concept that you’re only paying your partners who are driving traffic when you get the sale. It’s still good for retailers but you’d have to be careful that it is actually incremental business that you’re getting because if, for example, someone searching for a brand name and they already know the company and you’re paying them for that traffic with people who already know them, it’s not a good investment. I’d say it works for retail but you’ve got to be careful. Now that would include other transactional businesses like financial services and travel, and it can often drive 10 or 20% of sales for volume if it’s done well, depending on the awareness of the brand and the services. What I’d say is, although the narrow definition of affiliate is only for some businesses, there’s this broader concept of, let’s say, partner marketing which is a fantastic opportunity for everyone.

At Smart Insights, for example, in business to business, we make an effort to go out and work with companies that are bigger than us like, for example, Hub Spot and Marketo, the CRM marketing automation systems, and we’ll run projects with them where we’ll email our list to make them aware and vice versa. We found that successful. That’s really reciprocal. It’s a contra-deal, so it’s a low cost partnering arrangement. Hub Spot called that co-marketing, because of their scale they’ve actually got co-marketing or partner managers. Definitely some thing for people to more time into I’d say.

Grant Leboff: How does a smaller business start that journey? It sounds like a great idea, leverage the eyeballs that other people have. It’s great, especially when attention is so precious. How would a business start that journey to make that work for them?

Dave Chaffey: I look at it from the customer perspective and look at where you share an audience and it really needs to be complementary partners, so you’re not looking to cannibalize the sales of the others. For a small business, for example, if you think about getting visibility there, you might want to partner with other local businesses who aren’t in direct competition, or newspapers or local event guides. It’s really about thinking the type of content that people are looking for and where it overlaps.

Grant Leboff: Is there any easy way, when you’re a smaller business, to measure some of this? You can see the effectiveness of different partnerships that you may have in place?

Dave Chaffey: Yeah, that’s right. Google Analytics will, naturally, show you where someone’s coming directly through from a website, for example. It will show the referrer as it’s known but that doesn’t always work in social media or email marketing. What’s important there is to have tracking parameters set up so that any link on an email or social media from a partner is actually labeled with that partner and then you’ll see the value that they’re bringing. That needs to work both ways as well.

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