This is the second part in a two-part posting detailing the threats to the affiliate channel and innovations in the next several years. Today I am going to focus on the innovations I see emerging and how it supports my belief that the affiliate channel presents the greatest opportunity for growth in the coming years.
Innovation in the Affiliate Channel -- Product Improvements
The affiliate networks - regardless of their size - have an opportunity to build a tool that can connect with their clients on a functional and emotional level. Networks need to be constantly evolving their reporting tools. They need to survey their client base and their publishers to find out what is useful, what needs to be improved and what can separate them from the competition. The innovation will come from data being presented in multiple ways that is easily downloaded and shared with a wider audience. Some clients will want a tool that exports large amount of data into an Excel file that they can manipulate on their own. Others will want something more visual. Charts and graphs that communicate growth or opportunity the same way a Pivot Table can but overall looks more appealing to many people.
This balancing act is critical for networks to implement. The affiliate channel has the most diverse collection of personalities I have ever been around.
Building a user interface that provides your standard clicks, orders, sales, AOV and commissions is essential. But there is so much more data being consumed by advertisers that we now need the interfaces to be close to real-time, tie in mobile and tablet data and provide geo-targeted information. Advertisers will always claim they cannot get enough data. It is important for the network teams to fulfill their requests as best they can while at the same time making sure they understand what the data means. A strong user interface can go a long way to helping advertisers and publishers understand what the reports mean they are downloading and how to use that data to optimize further.
Innovation in the Affiliate Channel -- Client Service
I carried on a long time about how the product needs to be exceptional. The product will not matter if the network team is not leveraging it to deliver breakthrough moments with the advertiser. As an advertiser, if your network of choice is just reciting general metrics to you on a weekly basis - "These are your sales month to date. Your orders month to date." - you should be unhappy. If they are using the product to talk to you about top increasing and decreasing publishers, what SKUs are selling and with whom and what promotional links are performing well you should be thrilled to have that insight. If we start seeing "Omni Channel" shift from the buzzword of the year to a new, tracking enabled reality the client service teams need to be able to intelligently speak to this tracked data. The networks - and all performance marketing companies for that matter - need to have a team in place that can understand cross channel strategy and how they all tie together to form an online strategy that is showing value to the consumer and giving actionable feedback to the teams that are observing the consumer's online behavior.
What this means is putting in place a team that can embrace new processes, business models and deliver at a greater level of speed, strategic thinking and focus.
Innovation in the Affiliate Channel -- New Publisher Models
And speaking of new business models, the channel is always going to be flush with loyalty and coupon partners. This represents the low hanging fruit for advertisers. For those that want to push their brand further they will want to leverage the channel for new customers and loyal, Power Users. To do this they'll need to rely on publisher models that create a unique experience, offer valuable content and don't treat the customers as a target.
Mobile and tablet publishers create deep connections that allow users to "touch" the products and view offers from wherever they have access at that point in time. Content sites allow users to provide honest feedback, read in depth posts about products - clothing, electronics, health & beauty products - where they can interact with other shoppers. Some sites are targeting overseas markets or shoppers that are new to this country and English is their second language.
That is the great thing about the channel - the shopper can still feel a connection with a brand without feeling like a data point. The channel doesn't serve up useless banner ads or display ads that are processed and dismissed. They provide a legit forum for shoppers to make educated purchases.
Where Do We Go From Here?
The first thing networks need to do is construct a team that is not your typical workforce. Encourage your employees to move beyond the outmoded advertising industry. Traditional agencies are dead.
"Creatives" are viewing TED Talks and billing their clients while being inspired to build micro-sites that no one is ever going to view/engage with on a meaningful level or come up with bullshit social media campaigns that are corny and worse - useless.
Employees in the affiliate channel are able to realize the actual threats advertisers face and present overwhelmingly positive solutions through a variety of partnerships, sales data and incredibly useful products.
This is channel innovation at its best and these are all reasons to be very optimistic about the future of affiliate marketing.
