As the affiliate industry has matured, identifying new profitable traffic sources has become increasingly challenging. In the past is was common place for weighty, innovative publishers to approach partners directly, now it’s down to networks and advertisers to identify and connect with publishers, in order to keep innovating.
I would expect the rate of new entrants to have decreased, but the current amount of new players is concerning. To grow our industry and innovate to keep pace with changing consumer behaviour, we need a steady stream of new traffic sources, and publisher innovation has the potential to unlock unexploited revenues within the performance marketing sector.
Living in the super-brand-publisher shadow
In the past we had cashback, which offered a new type of consumer incentive and then voucher codes, which provided advertisers with incremental revenue. Recently we have been in a period of consolidation, where cashback and voucher code websites have created their own mega-brands. With the majority of sales being generated by a few big players, it can be easy to overlook the new entrants that are experimenting with new business models and formats.
Confusing consumer behaviour
Cross-device behaviour is also a challenge for publishers entering the affiliate space. As consumers move between devices, the traditional last-click attribution model can leave publishers that don’t have an effective cross-device tracking solution in place missing out on commissions. The last click model can also mean valuable and innovative publishers that add value early on in the funnel are unrecognised and unrewarded, thwarting their growth and innovation, as advertisers focus on the publisher super-brands that drive the big numbers today. As a result, innovation isn’t being rewarded.
New underutilised formats
Video is still a relatively untapped format in the affiliate sector. But with Facebook predicting the end of the written word, publishers are under pressure to work out how to monetise their video content. This is an example of relevancy being key to conversion as the best results are usually seen when matching ads with the video context, rather than predicting content from following people around the internet. Our video partner, DynAdmic is an advocate of this approach — context is key.
A misunderstood marketing activity
Negative perceptions of the affiliate industry don’t help. Many CMOs don’t have a positive opinion of networks, despite the efforts of the IAB to educate marketers about the industry and how it’s matured in recent years. However, at a time when ad fraud is on the rise and measuring ROI is an essential component of a campaign, performance metrics offer the most transparent and accurate means of measurement. We have to educate the industry and develop structures that allow digital marketers to adopt the right metrics for the right campaigns.
How can we drive innovation?
In an effort to cultivate innovation we have reinvested in our business incubator, The Zoo Project, which launched in 2012 and is designed to nurture start-ups. We also launched TD Ventures, our business accelerator investment fund, earlier this year. But more needs to be done throughout the industry so we can continue to benefit from the levels of growth and innovation we have been accustomed to in the last 20 years of affiliate marketing. We need to keep our entrepreneurial spirit and create environments where start-ups can thrive. Perhaps recent technology developments, such as full user journey analysis, can demonstrate the value and influence performance marketing channels can add and, in turn, reward innovative influencers for the roles they are playing.
And start-ups, I urge you to harness the technology that is available, speak with the networks and clients regularly — pitch your ideas.