The decision to migrate an affiliate program from a network solution to a SaaS platform isn’t a trivial one, but there comes a point in a company’s life where it begins to make an increasingly compelling kind of sense. Done correctly, at the right scale, there are costs to be saved and enhanced revenues to be made, as well as closer control, far deeper insight into campaign data and more efficient integration with other channels.
As part of our Impact Explores series of webinars, we wanted to investigate the practical effects of partnership automation for those who make the leap. So we drafted in marketers from two very different newly migrated companies – namely Robbert van den Eshof, Senior Digital Marketing Manager from travel giant TUI, and Simon Dunne, CMO of personal health testing provider LetsGetChecked – and it’s not necessarily a spoiler to say that we found far more pros than cons, in spite of the ambitious scope of the process.
The case for migration
“We’ve got quite a big affiliate program at TUI, and we’ve done a really good job of growing it over the years, but we got to a point where growing it wasn’t the main goal,” said van den Eshof. “It was about fine-tuning and making sure we focus on incrementality, and it’s really difficult to do that productively with a network. We wanted to take more ownership, more control of the program, act faster with a trading focus, so that when there is a new priority, we can activate that as quickly as possible.”
“Robert kind of nailed it with the word control,” said Dunne. “Control over rates is probably the biggest thing for us. For us, an affiliate could be anything from a closing channel, such as a coupon code or an affiliate that ranks organically or piggybacks on your search terms through PPC, or it could be a paid social affiliate or an influencer. All these affiliates are involved in different stages of the funnel, and they need to be compensated appropriately. We pay some guys 5 percent of revenue, and we’ll pay other affiliate partners $150 CPA. It took us 12,15 months to get there, paying the affiliates the appropriate rate, but it’s so important.”
Managing your affiliate risks
Companies migrate for any number of reasons, and often with very different internal provisions. “We went through everything that touches our affiliate channel overall: what are all the risks, who do we need to involve, who do we need to prepare, how can we use this tech across different commercial partnerships that are in place already?” said van den Eshof. “And so that was kind of the main way for us to prepare – speak with everyone in our internal teams and make sure all the processes are, as much as we can, laid out before we do it.”
LetsGetChecked was starting from an admittedly low affiliate base of around £10,000 a month in spend, so it had relatively little to lose, but it nonetheless had a specific set of challenges to keep in mind. “There were two big risks for us,” said Dunne. “One is attribution, and paying an affiliate the wrong rate. When you’re talking $150 cost per acquisition, if that partner isn’t really adding that much value, you can burn a lot of cash pretty quickly.”
The other serious pitfall for a brand in healthcare relates to content and brand reputation, Dunne added, noting once again the case for increased control over partnerships. “When someone working on paid social is promoting your brand and sending you 200 or 300 new customers a day, content approval is very important, especially in health care. You can’t have people saying anything that’s not factually true. So we need to have measures in place for that.”
The internal effect
“The better your controls are, and the better your reporting is, the more you can work as one integrated team,” said van den Eshof. “You can just go in and see exactly what’s going on – you don’t have to call an account manager in to get the insights. And I think it really helps, because our internal meetings are so much more productive, with everybody just knowing what’s going on with their channel.”
For both companies, the possibilities of integrating the affiliate channel with other owned and operated channels, including paid search and paid social, have dramatically opened up through the SaaS platform.
“Affiliates is a piece of the jigsaw, and without having this absolute visibility – and without getting other team members involved – it’s very hard to manage,” said Dunne. “One of the great things the software does is to give you true visibility on the entire purchase journey. We can see which affiliates are simply closing, and which affiliates are introducing. And by having visibility on that we can also where our own channels come into the mix there as well.”
The way forward
Within large organizations, compelling affiliate insights can open doors, van den Eshof added. “When we do big brand sponsorships, we’re involved in those conversations now, to see how we can benefit from a performance point of view, how we make sure we measure it properly, attribute the right ROI to that investment. And I think that’s probably one of the most exciting things about the industry going forward.”
Around 18 months since LetsGetChecked migrated, the company’s affiliate channel accounts for 35 percent to 40 percent of annual revenue, having grown 30-fold in the past 12 months on the strength of a 15-fold increase in spend. “It’s been a bit of a rollercoaster, but a lot of growth and a lot of success,” said Donne.
“The biggest complaint my affiliate manager has every month is she wants more budget, and the amount of traffic we’re getting through affiliates is just growing and growing. Part of it is because we pay decent rates, but part of it is because more and more publishers are willing to work on performance metrics.”
Across the ecosystem, he suggests, the appeal of the affiliate model is catching on at a dramatic rate. “There are publishers now who 12 months ago didn’t even know what a CPA or a rev share was, but who are now doing massive figures. Influencers who used to always want a flat fee are now more than happy to work on rev share deals. I see more and more traditional channels migrating over to the affiliate model, because the trackability is there, the attribution capability is there. I think the amount of spend in affiliate marketing as a proportion of overall spend is just going to go up and up over the coming years.”
If, in terms of its stresses and high stakes, migration to a SaaS platform is potentially the digital marketing equivalent of moving house, it is instructive to see two such dissimilar companies looking back positively on the process while reporting almost instantaneous benefits. Even in turbulent times, there are very clearly gains to be made, as well as plenty of affiliate evolutions to come.
Alex Springer, Director of Sales and Solutions Architects, Impact