OPINION: 5 Predictions for Affiliate Marketing in 2018

The following is a guest contributed post from Todd Crawford, Co-Founder and VP of Strategic Initiatives at Impact Radius.

Nearly all brands are now looking to affiliate marketing as a viable and cost-effective channel not only to close, but grow sales. Traditionally, players in the performance marketing ecosystem are paid on a cost-per-action basis and receive a commission for every sale or lead that’s driven to a brand’s  site. This means that brands don’t pay anything until a sale is made or an action is taken.

As a channel, affiliate marketing is extremely accountable — platforms offer advertisers a way to track, report, optimize, and pay partners or whoever runs a website, blog, or presence on any social channel for their contribution to a sale or conversion.  Affiliate marketing programs typically have a higher return on ad spend than other marketing channels, because the advertiser determines it upfront. In the U.S., Forrester Research estimates spending on affiliate marketing will hit $6.8 billion by 2020. But as the channel matures and evolves, there are changes afoot.

Here are five predictions for the affiliate marketing space in 2018:

Prediction #1: The affiliate marketing category will broaden into a partner marketing channel that encompasses all types of mutually beneficial relationships. Unlike the world of programmatic media and paid search advertising, partner marketing goes beyond the media buy to offer tangible benefits for both partners. In partner marketing, there is human to human interaction and these interactions often result in exciting strategic partnerships between brands.  In 2018, we’ll see the partner marketing channel become the umbrella category in which performance marketing is a component, and affiliate marketing and influencer marketing are slices of that pie.

Prediction #2: Marketers will increasingly rely on cross-channel contribution analysis to optimize and reward partnerships. They will no longer be able to get by on legacy data and metrics to optimize their affiliate programs. By understanding inter-partner and inter-channel contributions, marketers will be in a better position to know the true value of each partner even when they’re not the winning click. To retain and grow these partnerships they must be compensated fairly for the true value that they’re driving and contributing. Further, marketers can no longer rely on siloed data to manage any channel, but in particular, a partner channel where many are paid solely on a performance basis. The bottom line: Cross-channel involvement must be recognized in order to grow the partner marketing channel.

Prediction #3: Marketers will need to monitor their vendors and partners for compliance with the General Protection Data Regulation (GDPR). Vetting relationships will be extremely important, as well as ensuring that each party and your company have the appropriate consents and disclosures concerning collection, tracking, and processing personal data of your customers. Intelligent tools will be key for monitoring the types and treatment of covered data. As 2018 nears, it is essential to ask your vendors and partners whether they are or will be compliant by the May deadline, and to provide supporting details concerning their compliance efforts.

Prediction #4: Mobile becomes the most important element in the partner marketing channel. If you’re involved in partner marketing, you must make mobile conversions a top priority. For some brands, the majority of their traffic is already mobile. The question is how will they evolve their partner marketing strategy to account for mobile. Looking for partners that are already strong in the mobile space will be a key strategy for 2018.

Prediction #5: Brand marketers will recognize that they need to use the partner marketing channel to incorporate or increase influencer activity. While PR teams and specialized agencies typically manage high-profile influencers, don’t let small and medium influencers fall by the wayside. In order to grow and diversify your partner marketing channel, you’ll want to work with as many different partners as possible. Influencers bring a unique set of capabilities and nuances to the mix vs. traditional affiliate partners.

Overall, partner marketing will continue to grow in importance as a channel and deliver strong returns for brands. There’s more than enough new, and high quality content coming across the transom to fuel brands’ partner marketing efforts.