In the recent report Follow the Money, Affiliate Summit West in partnership with FMTC, emphasizes the complexity of managing numerous affiliate partners and the importance of optimizing and scaling affiliate programs. The introduction sets the stage for the study, explaining that the affiliate and partnership space is rapidly changing and expanding. It notes that affiliate marketing, once seen as a mere tactic, is now recognized as a strategic discipline contributing to brand development and measurable outcomes at every stage of the buyer journey.

Methodology: The 2023 study involved a survey of brand marketers with whom Affiliate Summit and FMTC had business relationships. A total of 110 respondents completed the survey, offering insights into their experiences and strategies in affiliate marketing. The respondents represented a broad range of program sizes and geographical areas, including North America, Europe, Australia, South America, and Asia.

Marketers’ Biggest Challenges: The survey identified key challenges faced by marketers in affiliate marketing. The most cited issues were optimization, scalability and automation, and attribution. These challenges are rooted in the need for data-driven strategy and decision-making. The report highlights the importance of creating productive relationships with the right partners and the ongoing concern over attribution models.

Partnerships: The study reveals that the average number of partners in affiliate programs is increasing. Content partners are viewed as the most valuable, followed by cashback and loyalty, email, and influencers. The report also discusses the paradox of browser shopping extensions, which, while not generating traffic, are effective in conversion rate optimization.

Compensation and Attribution: Cost-per-acquisition (CPA) is the predominant compensation model used by 98% of brand marketers, with cost-per-lead (CPL) and cost-per-click (CPC) also being utilized. The report underscores the benefits of using affiliate networks for payouts, as it ensures accurate and timely payments and simplifies internal financial processes.

Key Insights:

  1. Affiliate Marketing Evolution: The field has grown from a focus on discounts and conversions to a strategic discipline impacting brand development and buyer journeys.
  2. Challenges in Optimization and Scalability: Advertisers face difficulties in optimizing and scaling their affiliate programs, with a need for more sophisticated, data-driven approaches.
  3. Importance of Content Partners: Content-driven partnerships are increasingly valued for their quality associations and ability to influence buying funnels.
  4. Attribution Models: There’s a shift towards simpler attribution models due to institutional inertia and the complexity of more advanced models.

In conclusion, the “Follow the Money” study provides valuable insights into the current state and future trends of affiliate marketing. It highlights the strategic importance of affiliate marketing in the broader marketing mix, the challenges faced by advertisers, and the evolving nature of partnerships and compensation models. The report is a testament to the dynamic and growing role of affiliate marketing in driving brand growth and customer engagement. Get your copy of Follow the Money today!

Acknowledgements to the Report Contributors:

Brook Schaaf, CEO, FMTC
Ty Miller, VP of Merchandising, 6Blu, Inc.
Madison White, Morth American Affiliate & Partnerships Manager, The Body Shop
Molly Rosenthal, Director, Performance Partnerships, Mint Mobile