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How to Scale Your Digital Marketing ROAS with Affiliate Marketing

September 22, 2020
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The unpredictable impacts of COVID-19 have left brands uncertain of the future of their businesses, and therefore have kept teams on their toes as they manage their marketing budgets. Marketers are keeping an eye out on every ad dollar spent now more than ever, and expect positive returns to remain profitable in this unforeseeable economy.

Getting a return on investment could not be more important than a time like now—the solution? Affiliate marketing—a channel that provides a guaranteed return at scale. 

According to Forbes, the adoption of affiliate marketing today is widespread, with 81% of brands and 84% of publishers leveraging affiliate marketing, with spend expected to increase by 10% a year. Affiliate marketing is no longer your traditional last-click attribution model with the scammy, coupon site ordeal. The affiliate model exists to create mutually beneficial partnerships where brands only pay based on results driven: often a commission when a desired action is completed such as a sale or a lead. It’s relatively low-risk, with high-reward. 

Leveraging Affiliate to Lower Customer Acquisition Costs

As a performance-based marketing channel, affiliate is guaranteed to drive down customer acquisition costs and lower your CPAs. Every day, there’s a new brand trying to break through the marketing noise and become the next big thing, like the Nike of running shoes or the Sony of TVs. Winning customers has become increasingly competitive and thus, the cost of acquiring qualified consumers with long customer lifetime value and brand loyalty is more expensive by the minute. While investing in a variety of paid channels is important to maintain a diverse online revenue stream, the Return on Ad Spend, or ROAS, is increasingly difficult to break even, let alone drive incremental revenue and profit. 

With the right strategy in place, the affiliate channel has the proven ability to reach customers at every stage in their shopping journey, serving as a full-funnel digital channel if partnering with qualified affiliate publishers. 

Introducing Qualified Affiliates to your Marketing Mix

Now, say goodbye to the times of fraudulent coupon sites that affiliate marketing had been infamously known for in the earlier days of the industry and hello to a lucrative performance channel. Brands are now able to reach consumers at every stage of the marketing funnel, from top-of-funnel acquisition efforts through high traffic media publishers, all the way to establishing lucrative partnerships with lower-funnel, high-converting coupon affiliates. Bonnie D’Amico, Senior Affiliate Manager at Shopify, says, “Affiliate marketing is no longer the stuff of black hat methods and scams,” so long as your affiliate program consists of a variety of publishers that are diverse and drive quality traffic. For example, partnerships that were previously reliant on sponsored content and native ad buys, are now achievable through a performance-payment model- making it possible to achieve the high ROAS you’re likely looking for. 

Take Buzzfeed for example- a high traffic media publisher known to share DIY hacks and trend worthy news. Tapafiliate reports that Buzzfeed drove more than $425M in directly attributable affiliate transactions. This means that even publishers themselves are turning to affiliate marketing to establish a trustworthy revenue outlet. Unlike the times where expensive direct buys and sponsored content were prominent, Buzzfeed has nailed commerce marketing and brands are able to benefit without the tens of thousands of dollars in costs to guarantee a spot only to hope for a positive return. 

How to Start Scaling ROAS

Through affiliate marketing, brands are only paying when a desired outcome occurs, such as that qualified lead or sale. The Return on Ad Spend potential is limitless, with many brands often seeing a 8-15X return when the right commission structures, affiliate partners, and strategy are in place. 

While affiliate tracking technology is largely evolving, platform setup and identifying the right partners for your brand can be difficult, but the key is to get the platform off the ground and add as many well-vetted partners as possible.

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