The Future of Affiliate Marketing is Bright
Wednesday, January 23rd, 2013
Last week, VigLink Founder and CEO Oliver Roup shared his predictions on the future of affiliate marketing at Affiliate Summit West in Las Vegas alongside panelists Peter Hamilton, CEO of HasOffers, Ben Kiblinger, President and US / Canada Operations of Coull, Jonathan Mendez, CEO of Yieldbot Inc, and moderator Marty Fahncke, Director – Strategic Aggregation Marketing, Gragg Advertising.
Our own Mika Uehara, Senior Merchant Relationship Manager, attended the session and we caught up with her for a recap.
Let’s cut to the chase; how did the panel sum up the future of affiliate marketing?
The general consensus was that the future of affiliate marketing is extremely bright. The affiliate model is mainstreaming, and that’s a great thing. Both Peter Hamilton and Oliver Roup harkened back to the old days where advertisers focused predominantly on media buys and impressions, and publishers negatively reacted to affiliate offers, thinking they were just about selling pills.
Now, advertisers are demanding performance-based metrics and the dominance of branding display advertising is starting to shift. As Ben Kiblinger of Coull noted, advertisers are talking about omni-channel marketing and analytics to understand where their consumers are coming from. They value the affiliate marketing channel and see it providing a material contribution to their online marketing goals.
As for publishers, large corporations who never considered affiliate marketing a viable revenue model are interested in the space. We’re even seeing affiliates promoting their websites in TV ads!
It seems that display was a large part of the discussion. If the future is display, did the panel add any insight into how affiliates should be making the most of it?
The panel did touch upon display advertising, which may be a bit daunting to the average affiliate. But if you look at display advertising from a bird’s eye view and see how the channel has changed over time, one can glean insights from its growth and use similar methods and tools to drive affiliate marketing. For example, there is a plethora of third-party data to understand and anonymously identify prospects across demographics, interests, and usage behavior. Successful marketers and affiliates will use this data to target consumers and drive sales.
Was the panel predicting a decline or a growth in display?
Oh no, the consensus was absolutely growth in display, however, it was refreshing to hear the different views on where the largest opportunities for growth can be found. (That’s the true sign of a great panel discussion, isn’t it?) Panelists talked about changes in the automated management of display and how it opens up opportunities for retargeting and attribution, as well as leveraging affiliate marketing to target niche markets and find full-price paying customers amidst widespread bargain shopping and coupon clipping. Of course, all agreed that one of the largest opportunities is mobile.
Mobile is always a hot topic. Was there any discussion about how affiliate marketers could harness mobile?
eMarketers have talked about mobile being THE new channel, and even though monetization of mobile is in its early stages, panelists couldn’t agree more. They offered some great advice for leveraging growth in this channel, with some preparation.
With devices such as the iPhone and iPad, Kiblinger noted that affiliates have a unique opportunity to foster demand through the mobile experience, by placing ads within content, making them contextual and entertaining, and less annoying.
Hamilton directed the audience to mobile game companies who are experimenting with all types and sources of traffic, and are looking for direct publishing partners. They are willing to pay for installs, including incentivized installs, so there’s a lot of opportunity for affiliates.
What about video?
Panelists agreed that video plays a large part of a consumer’s web experience, but challenges were raised in how it can be leveraged and monetized. On one hand, we think about video on mobile devices as in-ad units. Kiblinger points out that a video about a game is great in generating downloads. From an ad perspective, videos are measurable from impression to conversion, and can track how far a person watched the video before leaving. On the other hand, we can also think about video as content. YouTube was brought up as the 2nd largest search engine in the world. Youtube is increasing in traffic, especially with younger viewers. One of the largest verticals is selling fashion and content to teen girls.
Regardless of its use, panelists expressed that publishers need to mindful of the value any ad provides their visitors and their bottom line. Roup challenged publishers to be critical and to identify what makes money and what does not. There is limited amount of real-estate on desktops and there is diminishing return for adding more ads (e.g., Google punishes publishers for high ad to content ratio). Mendez added the challenge of video and shorter attention spans. Relevant and less disruptive experiences will always win over ad-heavy video.
What should publishers be prepared for as the future of affiliate marketing marches on?
This was actually the final question. Panelists left the audience with this advice:
- Cookie tracking will shift, so publishers need to understand how tracking works and how to do it at scale (Hamilton)
- Be prepared for a world of machine learning, complex algorithms, and automation (Mendez)
- Regulatory scrutiny will disappear, organizations such as the PMA will change the face of the game (Roup)
- Focus on enriching the user experience (Kiblinger)