Affiliate Marketing Is Much More Than Coupons and Discount Codes

by Greg Shepard on Jan 6, 2016 12:00:00 AM Digital Marketing, e-Commerce

Affiliate_Marketing_Is_Much_More_Than_Coupons_and_Discount_Codes-429178-edited.jpgAffiliate marketing has changed and matured greatly over the past several years, becoming far more complex than it was in its infancy. A recent eBay study found most merchants programs are less than five years old, with 23.2 percent of programs running for less than one year. So while the space is evolving, it certainly has a ways to go. What’s more, the growing complexity requires more muscle and more sophisticated consideration than simply selecting the best coupon affiliate.

An effective affiliate channel program requires strategic planning and oversight along with in-depth analysis, management, and oversight of return on advertising spending (ROAS) and its effect on channel revenue. In the traditional and digital marketing space, big brands and merchants rely on professional ad agencies to oversee their marketing and advertising programs. It’s no different in the affiliate channel. Big brands intend on maximizing affiliate channel ROAS and “going beyond the coupon” work with performance marketing agencies, because they have the extensive experience and resources required to capitalize on fast moving opportunities.

How can a merchant can go beyond the coupon space, and how can working with a performance marketing agency benefit the merchant’s overall affiliate channel efforts? These are common questions…there's always a lot of talk about coupons and discount codes in the affiliate channel.

In fact:

- 68 percent of consumers state that coupons generate loyalty (RetailMeNot)

- 83 percent of shoppers have made an unplanned purchase based on a promotion/coupon (Market Track)

- 80 percent of consumers agree that digital coupons "close the deal" for them when undecided on a purchase (RetailMeNot)

So offers are awesome, right? Of course they are! So why are most players in the affiliate channel so fixated on the notion that an offer has to come in the form of a coupon or a discount code?

There are other methods to increase sales, build loyalty, and reduce the chances of shopping cart abandonment. Using engagement or exclusivity through new product updates, discounts, pre-orders, or exclusive offers works extremely well. For the most part, these incentives are simple to implement and easy to track.

For example, my company created an exclusive ongoing offer without a code for a major clothing manufacturer and secured home page placement with an affiliate that hadn’t previously worked with the merchant. The placement included newsletter inclusion and an algorithm boost. In its third week of activity, the affiliate was generating 400 percent more revenue than it had in its first week.

Additionally, temporary, exclusive commission increases can be used in combination with non-coupon offers in exchange for high-value placements. In one such effort, we utilized an existing offer combined with an increase from 7 percent to 9 percent for a major discount and promotional affiliate in exchange for a premium placement. Compared to the previous 30 days, the merchant saw a 177 percent increase in clicks, 255 percent increase in transactions, and a 270 percent increase in sales. This was no small fry merchant either, but a major brand manufacturer that generated tens of thousands of dollars in sales for the 30-day placement period.

Businesses that want to fully explore the affiliate channel and reap the myriad of benefits it has to offer (can you say, pay only for performance?), need to think bigger and more strategically about how they present themselves.

Currently, most affiliate network management is done in-house with one part-time person. Most merchants spend less than 5 percent of their marketing budget on affiliate marketing.

In many cases, that’s because they are approaching the space with a tactical mindset instead of a strategic mindset. It is essential to incorporate the full gamut of performance marketing strategies (brand compliance, search arbitrage, channel attribution, omnichannel considerations, catalog data feed management, shopping cart strategies, keyword bidding, and affiliate optimization & attribution, all of which can greatly affect revenue and return on ad spend.

Working with a performance marketing agency offers the merchant a higher level of strategic oversight and ensures their best interests are the highest priority. Merchants should select an agency that can provide the strategic insight, analysis, and transparency needed to ensure their affiliate program runs smoothly and reaches its full revenue generating potential.

Photo by Stuart Miles/

Greg Shepard is CEO of AffiliateTraction.

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