When In Rome, Do As The Romans Do: A Simple Guide To Affiliate Marketing

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Despite being one of the oldest forms of advertising, affiliate marketing is still largely misunderstood. Rakuten Marketing senior manager of marketing APAC Rhiannon Farrar (pictured below) uses a real-life example to explain it simply and claims there’s plenty more ahead for the channel in 2020.

It may be symptomatic of our times, but perhaps one of the most commonly overheard icebreakers in Sydney is, “So, what do you do?”. And I imagine that for many people this is a pretty simple question to answer.

For me, the conversation tends to run a little differently. “Marketing” is my go-to response but when I’m asked what type of company I work for, things tend to go a little astray. “An affiliate marketing company” is often met with confused looks.

Rhiannon Farrar

I’ll be honest, I had little knowledge of it before joining Rakuten Marketing, a company rooted in 20+ years of affiliate marketing. And to many in our industry, despite being an economic powerhouse, affiliate remains somewhat of a mystery. Although it may not be the loudest and shiniest tool in the marketer’s box, it is one of the most effective and reliable, driving amazing outcomes for the world’s most successful brands.

In fact, according to the IAB , 61% of brands rate affiliate marketing return on investment 7 out of 10 or higher, compared with other channels.

But if you’re still scratching your head about how affiliate marketing works, let me explain using a simple analogy.

Imagine you’re a tourist, visiting Rome for the first time. It’s full of the world’s best restaurants, galleries, sights and shops – so much to see, so little time. As a visitor, you want to visit the best spots in town and purchase some great souvenirs but who do you turn to navigate this vast metropolis?

You could consult trusty Google, packed with information about what’s what. But it would take hours to sift and filter through all the information, and it isn’t 100% objective.

On the other hand, you could ask a local for their recommendations to curate a custom itinerary tailored to your needs and wants.

You opt for the latter and everyone ends up happy. Local businesses receive sales, you have a unique experience, and you come away having bought some special souvenirs as a memory.

This in a nutshell, is affiliate marketing. Except in an affiliate arrangement our local tour guide would be rewarded for their referrals. Put simply, affiliate marketing is a partnership where brands pay a commission to a publisher for the traffic or sales they drive for the brand.

Affiliate marketing is no new feat, the concept has been around for centuries and marketers have been optimising the channel for decades. And it’s only getting more powerful. Advances in technology, science and machine learning means we’re now entering an ‘affiliate renaissance’.

Take the recent enhancement to commissioning technologies as one example. Traditionally advertisers would pay publishers a commission based on an agreed-upon percentage of a sale. New commission technologies now give advertisers the ability to pay publishers based on their actual business objectives, whether they are promoting a high-margin product or reaching new customers.

And if you think you’ve been exempt from all of this, I can guarantee that if you shop online, you’ve clicked on an affiliate link.

Links in blogs, Instagram influencer promotions, loyalty or cashback websites, online coupons and discount codes are all part of the world of affiliate. The majority of Australia’s top 100 retailers are utilising the channel.

Affiliate is making a resurgence because it’s the only channel that gives choice back to the advertiser. The choice to determine your own KPIs aligned with real business objectives, the choice to optimise your campaign against priority audiences and product lines, and most importantly, the choice to pay only when your goals are met. It’s native, original and authentic.

So the next time someone asks you about affiliate marketing, take them on a trip to Rome…or
simply send them to this article.

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  • Danish Qureshy 4 days ago

    Very true and to the point, couldnt put it any better. Affiliate marketing is the future of online businesses. Here’s something that I would like to share that helped me get my business going, hope this helps others as well…http://bit.ly/12minbizopp

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