The Affiliate Marketing Journey and . . . Baseball?
This is part of an ongoing series of conversations between an eCommerce amateur (who shall remain nameless) and one of DFO’s most knowledgeable (and patient) pros.
Today, Krishna Nirmel (K) details the steps – and evolution – affiliate marketers go through on their way to long-term success.
Q: I know a little more about affiliate marketing now than I once did, but I’m still hazy on how many of the media buyers we work with got started. Where does the journey begin?
K: The affiliates we work with are focused on eCommerce, but it didn’t start that way for many of them. New media buyers often find themselves starting in apps or sweepstakes – that is, working to get consumers to download an app or participate in a sweepstakes. They are two processes that are easy to “opt-in” on.
Imagine this as little league or high school baseball. You’re getting introduced to the game, learning the rules and getting a ton of practice.
Q: That’s a good analogy. Let’s stick with it. When do affiliates make the move up to college baseball?
K: In the affiliate marketing world, college baseball is the nutraceutical space – a big step up. Here, an actual credit card transaction is taking place, which comes with its own new set of challenges. Generally, it also requires more money and infrastructure from a media buying standpoint, as well as access to representatives on platforms such Taboola, Outbrain or Facebook.
It’s important to understand that marketing and selling nutraceuticals is much more handicapped and less lucrative than it once was. Restrictions in the payment processing world effectively cap the number of sales that nutraceutical companies can do. This means affiliates in the space can operate a profitable business, but often aren’t achieving the level of success they know they’re capable of because of the sales-per-day restriction.
Q: Do you see a lot of affiliates evolve beyond the nutraceutical business because of it?
K: Yes, we’re seeing plenty of our partners shift away from this model. The not-so-secret secret is that marketing sweepstakes or nutraceuticals has very little to do with actual marketing. Ads that worked 10 years ago still work today.
The nutraceutical model also includes a fair amount of brand equity loss because products can’t live up to their hype. This kind of volatility creates account churn, which is dangerous to businesses and media buyers who depend on an account to make a living, pay their employees, their bills, etc.
Q: So, what’s the natural next step?
K: That’s the question I’m challenging affiliates with now. It’s eCommerce. In our baseball theme, this is the major leagues, and it’s what DFO evolved its lines of business and subsidiaries around.
This is an exciting reality for affiliates because, after a few months buying media in the eCommerce realm, they realize they’re fighting a marketing battle, not an account battle. They’re asking questions like “How can I get more eyeballs on this product?” rather than “How can I best keep my Facebook account – and media buying capabilities – online long enough to make a profit?”
The entry barrier in eCommerce is also low. It doesn’t require the bandwidth or resources that something like a lead generation business does AND it doesn’t have limits or hoops to jump through like the nutraceutical business.
Q: The pivot seems like a good idea. How can affiliates best do this? What should they keep in mind?
K: In my experience, the most successful buyers are those who have high-level media buying skills AND the financial ability to withstand lower margins. That may scare some affiliates, so let me explain.
100 percent margins and more are possible in the nutraceutical space, but the nature of its caps and account limitations make it impossible to capitalize long-term on those margins. eCommerce is wholly different. It requires affiliates to be patient – to work on ads and optimize. If they can do that, they’ll soon realize the benefits of no caps or limits. They won’t miss the rebranding scrambles every few months.
Affiliates making the transition also need to understand that to work effectively and make money, eCommerce requires data. Running a set number of clicks and receiving a set amount of sales in eCommerce isn’t feasible. There are some up-front sunk costs, but affiliates must know that those sunk costs will help dial-in an audience for a product. Once an audience is acquired, you can start targeting – and selling – much more effectively.
Q: What’s your pitch (no pun intended) to affiliates who haven’t made the jump?
K: It’s simple. I start with facts. In eCommerce, margins aren’t as good. But eCommerce is a marathon, not a sprint. If you stick with it, market appropriately and optimize, you can make more over the long term because there are no limits on volume.
This is an ideal scenario if you’re an affiliate who can buy media that pushes 10K sales per day. DFO is not only a network, but an advertiser too. We have inventory, robust banking and brands with equity that run in perpetuity.
We’ve helped other media buyers make the jump. They’re doing 5x the volume and 2x or even 3x the revenue they once were. eCommerce is the major leagues and we know how to hit home runs.
Chief Revenue Officer firstname.lastname@example.org