Affiliate Marketing uses tracking cookies and a pixel placed on the brand’s site in order to track and measure their partners’ marketing activity. The metrics generated from this tracking structure tend to be more tangible than other forms of marketing and can lead to a highly reliable ROI calculation for the brand, including:
- Registrations, email sign-ups, giveaway entries
- Sales, orders, subscriptions
- Conversion Rate
- New vs Returning customer
- Average Order Value
- Cost Per Action (CPA)
- Customer Lifetime Value (CLV)
On average, companies either manage their affiliate programs in-house or they partner with an affiliate management agency (sometimes referred to as an OPM) to manage the day-to-day needs requirements of an effectively run program. There are also brands, particularly enterprise brands, who take a “hybrid” approach to the management of their program where they oversee elements of it in-house and partner with an agency to manage the day-to-day aspects.
In-House affiliate program management tends to work best for:
- Companies that have intentionally decided to run a small, private affiliate marketing program with only a few select partners. An in-house manager can generally manage this type of affiliate program without much difficulty.
- Companies that are not looking to grow their program. Partnering with an affiliate agency is an investment; if a company is not investing in their program, the spend may not be worthwhile.
Affiliate agency program management tends to work best for:
- Companies (typically on a growth path and who have $8M+ in online sales) who lack the in-house resources, operational and industry expertise, platforms and affiliate partnerships to manage their affiliate program effectively.
Hybrid affiliate program management (in-house + agency) tends to work best for:
- Enterprise brands who need a substantial team to run their program.
- Brands who want to use an agency for particular purposes or to strategically expand their geographic footprint.
When managed well, with the right partners, affiliate marketing is arguably one of the most efficient and cost-effective marketing models for driving new revenue, new customers, high-value leads and incremental sales.
The growth of affiliate marketing, now over 20 years old, is a testament to the model’s adaptability and versatility. It’s also why it’s an integral part of the marketing and acquisition strategies for the world’s industry-leading brands.