GUEST COMMENT Is it time to review the small print in your affiliate network relationships?
by Sean Sewell
Successful ecommerce thrives on working with the best business partners that ensure you stay one step ahead of your competitors. Over the last decade things have become pretty stagnant in the affiliate channel when it comes to service provider choice. Large brands tend to review their affiliate network provider every 2-3 years and differentiation between service providers has become harder to see.
A worrying trend has arrived driven by a lack of innovation. In order to lock in market share, contracts have been increasing and the small print surrounding notice periods has been growing. The chief executive of one popular European network has said that their strategy is to negotiate three to five-year deals with their most important clients, acknowledging they will take lower margins over the contract lifetime.
In a channel which is growing quickly, underpinned by major technological advancement this feels short-sighted. In the area of service provider choice the performance marketing channel has got into somewhat of a rut. So, when looking to extend or renew third party partnerships, how do you ensure that you are future proofed for the long term? How do the world’s leading brands choose the best performance marketing solutions to deliver growth? Here are some factors to consider.
There doesn’t seem to be a day go by in performance marketing without the release of some new technical innovation, or a different way of doing business coming to light. No other sector offers such a myriad of specialisms all clustered beneath one umbrella - from search to content to mobile. New and existing publishers are all developing creative and interesting new ways to drive growth and revenue for the brands they work with.
Technology is increasingly being engineered using the latest database infrastructure to facilitate customer scalability and visibility. Turning big data into meaningful data in a real time environment is the CMO’s dream. Understanding the full landscape and the options available and what they really mean for your business is essential in making such an important decision.
On the flip side there is value in long-term partnerships, where your partner demonstrates the flexibility and adaptability that your business may need as the marketplaceevolves.
Within a technology-driven ecosystem, price will (and should) also play its part in your decision-making process. However, is this most important factor for you? What about the features and benefits of your service providers technology? Their ability to innovate? Their approach to servicing your requirements, (and those of your customers)? Their expertise in the performance marketing sector?
I’m sure we all have stories of situations where cutting costs in the short-term has ended up costing more in the mid to long-term. If generic reporting and tracking can deliver you the incremental growth you seek, as if it can, why hasn’t it so far?
As brands continue to capture increasingly wider data sets, it seems prudent that your service provider can offer a fully scalable infrastructure, as well as offering different ways to consume and present that data. Whether that’s managed in house, agency partner or network. One size definitely does not fit all.
Of course, investment in strategy and affiliate acquisition needs to be addressed and, until relatively recently, it was one of the areas where traditional networks led the market. However this is now an area where online influence solutions such as Linkdex can help. There is also a much broader industry knowledge base for the affiliate channel compared to just two years ago and increasingly, brands have been capturing the knowledge to manage partners in-house or through their media agencies (who can provide wider digital channel insight outside of the affiliate channel). Just look at how successful Amazon and eBay are at running their own direct partner channels.
Continuity and costs do have a value, but they’re not the only factors to consider. At a minimum we’d suggest asking at least the following technical questions, particularly if you are looking to RFP:
1. How will you help me to scale?
2. How will you centralise all of my performance marketing activity?
3. Can you customise the experience for partners and internal stakeholders?
4. Do you have an extensible rest API?
5. If we want to go global how would you manage this?
6. Why did your last client leave and where did they go?
7. Can you track, report and analyse data in real time and how does this change with volume
8. What will your solution look like in three to five years time?Sean Sewell is business development director at Performance Horizon Group.