Day two of Affiliate Management Days kicked off with the Keynote panel, 2017 Affiliate State of the Union. This panel, comprised of the industry’s most prominent thought leaders, debated side-by-side today’s most pressing performance marketing issues. Robert Glazer of Acceleration Partners moderated the panel, which included Brian Littleton of Shareasale, Todd Crawford of Impact Radius, Gary Warnes of Rakuten Marketing, Greg Shepard of Pepperjam, Scott Kalbach of AvantLink and Choots Humphries of LinkConnector. The group debated a diverse set of issues ranging from attribution and commission splitting to the globalization of the industry.
Here are a few highlights:
The Industry in 2017
A recurrent theme, initiated by Todd Crawford, was the importance of referring to our industry as ‘performance marketing’ versus leaning on the legacy term, ‘affiliate’. Todd stated that ‘performance marketing’ elevates our industry. ‘affiliate marketing,’ he said, carries baggage and limits the scope of our space.
Other areas of interest included quality over quantity of partnerships, successfully onboarding and enabling influencers, a need for greater data-driven attribution, and as Choots Humprhies emphasized, “the validation of our industry through increased investment dollars coming into the space.”
Business Dev Partnerships and Influencer Marketing
The panel discussed in detail the need for a toolset for the influencer subset to enable their success; most panel members also felt that influencers often struggled to gain a basic understanding of how the industry operates and what the main benefits are. Scott Kalbach explained that a much simplified network version is needed for this group and pointed out that AvantLink has broken influencers down into smaller subsets such as ‘checkout influencers’ and ‘introducer influencers’.
Choots agreed with Scott and mentioned that LinkConnector also has several technologies to make it easy for influencers to get started without requiring a full knowledge of how affiliate marketing works. Choots used the analogy of trying to explain affiliate marketing to a family member and the resulting difficulty that we all experience. Brian Littleton stressed that greater pay for this promotional segment is necessary.
The question was raised if performance (or affiliate) marketing actually did miss the market opportunity for the influencer group early on. Most on the panel disagreed. Todd Crawford referenced that the emergence of VigLink and SkimLinks illustrates that the industry has met many influencer needs and felt that we must continue to expand the scope of what an affiliate channel can do.
Programmatic Display and Transparency
The panel spoke to how the performance marketing industry inherently solves for lack of transparency –an issue we have seen in programmatic display. Todd described buying performance marketing as safe and exciting and touched on the need to elevate this space up to the C Suite. At times, the amount of transparency can be such that data overload, without the education and/or understanding on how to leverage the data, can come at the detriment of the industry, as other channels have historically received budget without a full scope of the data-backed ‘why’.
Several panel members, including Greg Shepard with Pepperjam, felt that the transparency, compliance, and performance—inherently woven into performance marketing—should be integrated directly into the advertiser dashboard in order to get the attention of the C Suite—they have to see it.
The Pricing Model and Managing Incremental Partners
Robert Glazer, the panel’s moderator, spoke to how the industry is seeing new price models for the first time in 20 years. He said clients seem to be evaluating technology and services more independently, wanting to understand the cost and accountability of each with increased transparency. He asked: Does the performance fee survive in its current form?
Gary Warnes of Rakuten stated that flexibility and adaptability must be at the forefront of pricing. Greg stressed that we must pay the right amount to the right affiliate; “fractional payouts are a huge mistake.”. Along these lines, Greg with Pepperjam stated that there are too many affiliate mouths to feed and fractional commission splitting does not work.
Todd Crawford had a divergent view, believing that advertisers must pay more, not split up a small (fractional) commission. This would make performance marketing a safer channel for CMOs.
How do we bridge the gap? More investment is needed by the advertisers.
Brian Littleton added that the performance space is not budget-driven but rather performance-driven, and as such, it grows slowly over time. This different type of marketing has the most transparency in terms of showing the true value of each partner.
To further this point, Todd Crawford stated that a good affiliate manger can be the smartest person in the room given the extensive data available in the affiliate channel— much greater than other channels.
Globalization of E-commerce
Greg Shepard began by describing the global e-commerce landscape. We must first understand the different cultures and markets—from various holidays and holiday trigger dates to differing terminology (e.g., coupon code versus voucher code). Boots must be on the ground. We need actual offices in the various countries where an e-commerce presence is desired.
Todd Crawford felt that having a uniform strategy and executing is key as exemplified with Lenovo’s global affiliate program. He felt that one of the most exciting things to happen in affiliate marketing is localization and understanding of the cultures. There is a lot of consideration necessary.
Todd Crawford spoke often about the need to evolve past ‘affiliate’ – he stated that he intentionally built his company without this term used; Todd said our space is more about partnerships.
Further, Todd advocated for ten times the current involvement we must move the needle in our industry—we need more education, not just sharing on social media. We have a great under investment in our industry and gap in senior roles.
The panel strongly believed that the idea of education is fundamental. As Greg Shepard stated—we’re giving advertisers weapons without teaching them how to use it. We’ve given merchants too much flexibility. We need a training certification program.
Brian Littleton stated that the affiliate channel is a long-term investment. Advertisers must demand standards.
Choots Humphries urged advertisers to join the PMA—this is the conduit to change.