Affiliate marketing gains importance even after 20 years

Since its emergence in 1997, affiliate marketing has been one of the most successful stories on the Internet. Whereas in the beginning it was merely a tool for handling one's own affiliate program, today it has evolved into a multichannel sales partnership. The past year in particular has shown many industries painful limits, but also opportunities and further sales possibilities. Online marketing and e-commerce in particular are recording growth. Affiliate marketing is benefiting from this as a sub-discipline. According to a BVDW survey one in six euros was already generated through affiliate marketing in 2017. In the current situation, this model has become even more important because of its ability to be planned and scaled.

But why is affiliate marketing, which is now over 20 years old, still so successful? The advantages are obvious. For the operator of an affiliate program, there is a manageable cost risk due to the predominantly success-based CPO (cost per order) commission. This means that only commissions from completed transactions are paid. Affiliates deliver banner ad placements free of charge and use them to bring visitors to the online store. Another advantage of affiliate marketing is the fast and uncomplicated acquisition of potential new sales partners. But the real advantage lies in the variety of different application options and a mass of partner models, through which specific target groups can be reached wonderfully. And at this point, there is often still the misconception that the contact with the customer only takes place at the end, i.e. at the last stage of the conversion funnel. The possibilities of affiliate marketing are so diverse that you can reach potential customers at every stage from awareness, through interest and desire, to action. All you need is a strategy.

First phase: Top of the funnel

In the awareness phase, display publishers are ideal for increasing brand awareness of a store or product. In this first phase, a brand or an online store can be specifically developed within a display network by placing advertising banners that are available in the affiliate program. Affiliates receive compensation for placing the ads in the form of a post-view CPO. Another branding tool is targeted emails to potential target groups. Suitable publishers have email databases and the emails are sent on the basis of a CPM.

Second Phase: Middle of the Funnel

In the second phase, the interest in buying is solidified and the desire for a product becomes more and more urgent. A variety of publisher types and publishers offer numerous ways to bring valuable visitors and interested parties into the online store. This works as follows: topic-related content sites and blogs publish editorially prepared content on a wide variety of topics. Influencers united in networks then promote the products to their target group with pinpoint accuracy. The goal of affiliates at this stage of the mid-funnel is to bring visitors to the online store. This task is usually achieved via CPC remuneration or by means of a fixed placement fee.

Third phase: Bottom of the funnel

If a customer is at the end of the conversion funnel in the customer journey, he has usually already made a decision to buy a product. In this phase, it is important for the operator of an online store to secure this intended sale for himself with the help of the corresponding affiliates. Cash back and loyalty publishers reimburse a customer for the purchase or grant a corresponding refund via a loyalty currency. This can be points or miles, which can then be transferred back to the account or redeemed for a reward. An increase in CPO, in conjunction with a corresponding cash back increase, can positively influence sales at the right time. In the same way, the acquisition of new customers can be implemented with cash back and loyalty publishers.

Voucher sites provide a promotional voucher for their visitors, where the potential customer can save on a purchase in online stores. Time limits and any minimum order values for redeeming the vouchers ensure short-term sales with corresponding turnover. Deal publishers publish sales promotions for their communities at attractive conditions and trigger a purchase impulse. Comparison Shopping Service Affiliates place product-related ads on Google and thus deliver additional visitors to the online store who are interested in buying. These CSS publishers are remunerated via the affiliate program, usually with a CPO commission. If the visitor is already in the online store, so-called onsite converters can prevent imminent shopping cart abandonment, increase shopping carts via intelligent mechanisms, or use measures to bring potential buyers back into the store. Because this is close to the conclusion of the sale, these affiliate partners also prefer an attractive CPO commission.

Strong story, but with topicality

Affiliate marketing has been making a valuable contribution to the online marketing mix for more than 20 years. The easy and convenient connection via an affiliate network allows you to reach a wide variety of affiliate categories and the right target group. Whether you want to increase brand awareness, generate new customers, or increase sales, affiliate marketing can be used to implement strategies.

* Detmar Eggers has been working in the affiliate industry since 2007. After studying business administration at the University of Kiel, Detmar worked in affiliate marketing for many years, both on the side of a publisher and on the side of a network. Since August 2021, he has been leading the affiliate partnerships team at ad agents.