The Power of Affiliate Partnerships for DTC Brands

May 26, 2021 11:00 am12:00 PM EST

Summary

During our virtual events, we encourage senior professionals to share & network with like-minded industry peers. Each session is moderated by a BWG Connect professional to ensure that our conversations remain on topic and answer critical questions that the audience truly cares about.

All audience members will have the ability to ask live questions and will have access to introductions to any of the attendees following the event. We're always open to making connections to others within our network as well.

BWG Connect & Acceleration Partners invite you to participate in an interactive discussion with your peers.

As always, there will be no sales pitches and there is no cost to join.

Discussion Topics

  • Why are brands are shifting to the affiliate marketing model and what types of performance-based partnerships are driving growth?
  • What is the different between affiliate and partner marketing?
  • How is SaaS technology different from an affiliate network?
  • Where does influencer marketing fit into the partner marketing ecosystem
  • Why does the AOR model not make sense for affiliate/partner?
  • What are some of the trends have you seen with your clients over the past year?
  • Shifts in the digital marketing landscape have prompted DTC marketers to take a hard look at the cost of their reliance on paid search and social as their profit margins become narrower
  • What role has affiliate marketing played in the rise of DTC and how has it contributed it to its success?
  • What can companies can start doing today to develop a more scalable performance-based marketing program with high-value partners?

Event Partners

Guest Speaker

Robert Glazer

Founder & CEO at Acceleration Partners

Robert Glazer is the Founder and CEO of Acceleration Partners. Acceleration Partners is a global affiliate and partner marketing firm. They're one of the largest independent agencies focused on the partnership channel, with about 220 people now managing programs across 10 countries. They have helped enterprise brands like eBay, Target, Uber, Dick's, and CoinBase build a robust partnership strategy.

Event Moderator

Aaron Conant

Co-Founder & Managing Director at BWG Connect

BWG Connect provides executive strategy & networking sessions that help brands from any industry with their overall business planning and execution. BWG has built an exclusive network of 125,000+ senior professionals and hosts over 2,000 virtual and in-person networking events on an annual basis.

Key Discussion Takeaways

The direct-to-consumer business model has blown up over the past 15 months, generating tons of interest. Companies are grappling to figure out how to optimize the model, make it more profitable, and find the right areas of marketing. One of the highly talked about areas is affiliate partnerships.

Different studies have said that 77% of brands make the partnership a core part of their growth strategy. Even more interesting is that brands with mature partnership programs were growing two times faster. The sweet spot for affiliate partnerships is its ability to tie payout and marketing to outcomes for DTC brands. How do affiliate partnerships work today?

In this virtual event, host Aaron Conant talks with Robert Glazer, Founder and CEO of Acceleration Partners, about the power of affiliate partnerships for DTC brands. They discuss the trends driving partnerships, how to determine when an affiliate partnership is suitable for your brand, the metrics to track, how to get started, pitfalls to avoid, and much more.
 

Here’s a glimpse of what you’ll learn:

  • Robert Glazer talks about the size of the global partner marketing channel and the trends driving it
  • Affiliate versus partner marketing: what are the differences?
  • Where does influencer marketing fit in the partner network?
  • The outlook of affiliate networks as a part of performance marketing
  • Should you set up a multi-network affiliate program?
  • Getting started with affiliate partnerships for your brand — and the metrics to track
  • How to pitch affiliate marketing internally
  • Partner program pitfalls to avoid
  • How far can you scale partner programs?
  • Treating affiliate programs differently from driving DTC traffic and Amazon traffic
  • The mistake brands make with affiliate and influencer marketing
  • What is the agency of record model, and how does it fit into the affiliate partners program?
  • When should you seek affiliate partners?
  • How privacy changes are helping affiliate programs

Discussion Transcription

Aaron Conant  0:18

Happy Wednesday everybody. My name is Aaron Conant. I'm the Co-founder and Managing Director of BWG Connect we're a networking and knowledge sharing group of 1000s of brands. And we do exactly that we network and we now share together to stay on top of the newest trends, strategies, pain points, whatever it might be, I talked with about 30 brands a week is on digital strategy as a whole. And when the same topics come up over and over again, we host an event like this. So we try to say really relevant, I say that because after the call, we'd love to have a conversation with anybody on it today, here, what's your pain points are and set up the topics for future calls as well. Also, if you need any help with digital strategy, more than happy to share across the board, or help with partner selection, doing a lot of that right now as well. So you can skip a Google search and we can just jump on the phone, we've got close to 10,000 brands now the network that kind of shoot over routinely, hey, top service providers up any given vertical. And that's also how we find the the great partners and to participate on our calls as well. A couple of housekeeping items as we kick it off, as you noted, we're gonna try and jump around to some people bringing them into the conversation if we can. The other thing is if you can't, if you can't come off mute because of background noise, but you still have questions, feel free to just drop them into the chat or email them to me, Aaron, Aaron@BWGConnect.com. And we'll feel questions that way as well do it in real time as we go. And with that, we're going to kick it off. I guess one other thing I'd like to add is, we're going to wrap this up with three to four minutes to go on the hour as well. So if you're looking at your watch, now, we're going to give you plenty of time to get on to your next meeting without being late and probably grab a cup of coffee along the way. That being said, as I noted, you know, talking to 30 to 40 organizations on a weekly basis. And you know, as direct consumers really blown up over the past 15 months, tons of interest, a lot of companies trying to figure out how to optimize it, how to make it more profitable, what's the right areas of marketing? You know, it's everything supply chain fulfillment, you know, replatforming, but one topic that came up over and over again, was affiliate marketing and partnerships that are out there, and how does it work. And we got some great friends, great partners and supporters of the network come highly recommended from multiple brands and the network as a whole, as, you know, its themes that sometimes would be kind of a muddy space, and they kind of have a really clean approach to it as a whole. And so, you know, Bob Glazer is on the line today to kind of give us an overview, but you know, I'll kick it over to you if you want to do a brief intro on yourself. And, and acceleration partners. That'd be fantastic. And then we can kind of jump into the conversation as a whole, Doug.

Robert Glazer  3:00

Thanks, Aaron. Great to meet you all, virtually. I look forward to doing these again in person sometime soon. As I'm sure Aaron does, as well. I'm Bob Glazer. I'm the Founder and CEO of Acceleration Partners. Acceleration partners is a global affiliate and partner marketing firm. I think we're the largest independent agency focused on the partnership channel, we have about 220 people now across operating managing programs across 10 countries with more countries than that, but that's where our people are located and really have helped enterprise brands like eBay, Target, Uber, Dick's, CoinBase folks like that kind of build a robust partnership strategy. One of the things we'll talk about today, another sort of the synonym between affiliate marketing partner marketing, try to explain a little bit how affiliate has adopted I adapted not adopted, maybe it did adopt, but adapted into this larger partner marketing channel. What that and what that opportunity really, really looks like. Because I think that's that's a lot of the that's a lot of the excitement in the industry. today. What we see now is partnerships has really turned into a channel that has multiple tactics, versus this tactic of affiliate marketing that kind of got lost somewhere between paid search, social and email.

Aaron Conant  4:18

Awesome. So just really quick, and I dropped in the chat there as well. You have any questions along the way, just drop into the chat, email them to me, Aaron, Aaron@BWGConnect.com, and we'll feel questions that way as well. And But with that, yeah, I'd love to kick it back over to Bob, if you want to kind of go through, you know, this high level information here. And then we can kind of feel questions as they come in. I've got a list as well, just from brands I'm talking to so I'm sure we'll have plenty to talk about.

Robert Glazer  4:46

Yeah, let me let me I'll keep this really, really brief. You can see let me know if that advances, right. So mentioned where we currently operate programs in 36 countries actually the numbers up to 200 20 employees and cover 22 languages particularly important, I think in the global partner programs we see as one of the biggest opportunities but they, what they actually require is a coordinated effort but but local presence and language skills. A lot of times you get asked about the market size, there are a couple stats out there, the 15 billion and current value of affiliate marketing us close to 7 billion, really actually the fastest growing digital channel last year, out of all of them after the first just four weeks of abject panic in March, and April, the number one thing that people kept going was their performance based marketing channels, the stuff they turned off was where they couldn't manage, they couldn't measure outcomes. So we actually saw a pretty big shift into the channel. And 80% is is brands allocating least 15% of their budget to it. In terms of that $15 billion, as I started talking about partner marketing, I didn't the market size is two to three times bigger, because again, when when we start talking about partner marketing, it starts being looking like digitizing business development. And that's just really opens up the market. And it's where a lot of people are focused today. So some of the trends that are driving the channel are global expansion in coordination, given the ability to have a truly global program has only existed in the last four or five years. If you want to do before that you were looking at maybe working with four different agencies and four different platforms, ryzen Mobile partners, smart commissioning models, that that's been driven by SaaS, which we'll talk about, which can just align incentives to your business model. In particular, I think the programs that you know, if you have a program that's just gross, you know, hey, it's 8% for everyone, you're running a dinosaur program and really need to make some changes. white label platforms are taking over and mass media publishers are really coming into the partner and Performance Base, which is exciting for brands who want to work with them on a on a partner basis. It when you know, do a study, there are a couple studies that came out between Forrester Price Waterhouse the last couple of years, they're interesting, in terms of this new partnership segment 77% of brands are making partnership, a core part of their growth strategy. And then brands with mature partnership programs where we're growing two times faster. And just that ability to tie payout and marketing to outcome I think just allows for the recycling of those funds a lot better than some other channels. I want to kind of settle this debate on affiliate versus partner you see it a lot. You see the folks who've switched over to partner kind of saying, oh, affiliate marketing is dead and the affiliate side, you know, saying you know, saying well, it's just a rebranding, and both of those are kind of not true. So this is really how I see it, like affiliate marketing was was, you know, represented, there was always been the software out there and this track measure and pay, but it represented a sort of traditional type of publisher base, I think people can think of loyalty or coupon or bloggers. And and, you know, what we're really seeing today, under this new partnership is all affiliates sort of plus think of affiliate as a piece of a bigger pie. And driven by new types of technology, people are saying, Oh, well, it's kind of the same thing I can use for my old affiliate program. Some of these business development like partnerships, my overgrown referral program that that I've been doing internally, some of this PR and influencer, influencer stuff that we're trying to do on a performance basis and track with spreadsheets, and then other new types of emerging channels and b2b. And it just becomes, again, a channel in itself with multiple tactics. So you know, you know, brand aligned global cross device, cross platform, working on a single tech platform across multiple different types of performance based partnerships, and tracking them in a unified way. And that's what's exciting to people and really what's driving the channel. People liked the affiliate model, you had this great software that that could track measure and pay, there were just some problems where it grew itself, it didn't innovate it. So brands didn't want to pay for performance in perpetuity. If you had, you know, if you had eight partners that were 90% of your revenue for five years, paying a performance fee kind of kind of got old on that of paying a 20 or 30% performance fee for five years. You know, we don't pay our sales team for stuff that they sold five years ago, they get paid for the first year and then they got to go sell new stuff. So a lot of affiliate networks were just milking money off of these relationships procured years ago that just hadn't really changed. And again, the model was to pay one to 2% of revenue or 20 30% of commission for relationships that seemingly they originated so that really didn't give you a lot of incentive. If you initiated a relationship to want to put it on this platform, and then have to pay this, well, you could have benefited from this technology to pay this fee in perpetuity. Also, you know, particularly enterprise brands looking for a lot more brand control. And this notion of private partnerships is similar to what's going on with programmatic where people want to bring it in house where they can say, Hey, I like the technology. But I want this to be my program with my people. I do not, you know, tactic of the publisher development at the network's years ago was, if you were Walmart and Target, you're both on the same platform, they go the Walmart team and say, hey, I've got some great ideas for partners for your program, and they just go through the target program. And then and then vice versa. So there really wasn't a lot of proprietary nature to this cobranded relationship. So we really seen the emergence, the last couple years and some of the networks have adapted, adapted, and others are still saying, look, we're going to we're going to go down with our original model. But but the SaaS model, which has been pioneered by folks like partner eyes, and partner stack and impact is licensing this affiliate partner technology to the company, so that they can have their own program, its first party data, their their kind of open systems with granular data API access, you can do all kinds of stuff with it can support all types of partners beyond just traditional affiliate kind of deep integrations with with people with with with, like, we work with a large rideshare company who has the technology set up so that when when a when a driver takes their first passenger and swipes complete four months later, that's the payout mechanism for recruiting that partner. So again, technology deeply tied into the business model, you know, their tech platforms, they're flexible with easy text integration. And I think the SaaS model creates better margins and predictability. If you've licensed the model and you look around the company and you people that are managing things on spreadsheets or otherwise, you say, come onto our platform, it's not gonna we've already paid for it, it's not going to cost us 20 or 30%. And it does the contracting and it does the payouts and it does the tracking, and does all this stuff that just makes, you know, digitizing partnerships much, much faster. So that's what we're really excited about. That's what we're working on with brands, this sort of new definition of a partner program that gets in all kinds of different partnership types. But but but again, as as a new single integrated channel. And we also, we kind of wrote a book a little bit talking about this, we have another one coming out. And if you shoot me an email, happy to mail you a copy, or if we have your address at the end, happy to mail you a copy, but that's what we're excited about. Again, I want to Aaron's got some questions, but I'd love to make this as interactive as possible.

Aaron Conant  12:45

Yeah, and I do want to jump around, you know, and just, you know, bring other people in, but, you know, talk questions and feel free to drop them into the chat as we go. But on the influencer side as well, this is really, you know, skyrocketed. You know, I know it started, you know, a few years back, but then you kind of bring in TikTok, which really read a lot of new life into it as a whole, you know, so where does influencer marketing fit into the partner market?

Robert Glazer  13:12

It's a great question. So So influencer actually is following a lot of same problems affiliate had in that in that, you know, first I got a pass for a few years on, hey, the hot new channel, let's suspend all metrics. And there's two types of influencer. I think there is the, you know, Kim Kardashian billboard PR influencer. And then on the other side, there is the like bloggers who have always worked in affiliate programs and done everything on a performance basis. And now there's a big space in the middle, there was something like 600 influencer networks, fundamentally, they do the same things, affiliate networks and partner networks. So you're seeing those kind of collapse fall apart, consolidate, like, it's probably goes down from 600 to five, but they're, but they're also plugging into these prs or, you know, the new name for sort of affiliate network is this partner management system or something like that, because, fundamentally, is the measurement and management of a partnership. So influence are still hot, people want to do it, whether they're paying on a performance basis, they still want this stuff now tracked and measured and sort of integrated into a single source of truth. So we're seeing a ton of integration into the partner programs. influencer is just another type of partnership. And it can be done in the same place, particularly on the performance side. So either they're, they can be you can recruit a lot of micro influencers into your partner affiliate program, you can pay them on a performance basis, you can pay them on a hybrid basis, you know, where they're tracked. We're starting to do a lot more for our clients on this, we just did a deal with the CreatorIQ, they have a deal with impact where it's almost plugged in as a source of publishers. And so we think you will see continued convergence until this is kind of a single channel in the next couple years.

Aaron Conant  14:55

Awesome. So another question that I want to kind of jump around. I want to bring Scott in. But, you know, when you when you think about the performance, marketing performance, you know, based as a whole, you know, how are you? How are you looking at affiliate marketing that model as a whole the partnership model, what's working, what's not What's changed? And what do you think is going to be different a year from now? I think we were, I've seen this evolve so much. Yeah, the kind of taking a step back saying, Where's it? Where's it gonna end up at the end of this year? When do I jump in? And then where's it going to be at next year?

Robert Glazer  15:31

Yeah. So, you know, the affiliates sort of did try to rebrand as partner sorry, as performance a few years ago. And I think it just got crowded in this big tent where everything digital was performance could add measurement. The thing that is different about partner marketing and affiliate is that you only pay for the outcome, you don't have the choice to say to Facebook, hey, that that product was returned, or that order was fraudulent, or that one didn't convert a sale, I'd like my money back. So there's a big difference, being able to measure that you had performance or having where you're literally paying for an outcome. So you know, the big three of Facebook, Google and Amazon, they're auctions and the prices are just going up and up and up. So people ran into performance when they ran into partner marketing and affiliate when when COVID hit because, again, I've got money to spend for outcomes, then it got hot, and we're printing money, literally. And now they're all jumping back into the auctions. Well, the problem with auctions is that the more buyers you have, the price goes up. So Facebook's earnings just came out. And their earnings were up 42%. And that was driven by a 12% increase in the number of ads shown and a 30% increase in the cost of ads. I don't know many people on this call whose margins have gone up 30% a year. So I'm just hearing from everyone that the try opoli is just getting more expensive and harder for them. And they need stuff that is sustainable. So I think it I think you're seeing more of a systemic shift to you know, how do I understand what this new affiliate partner strategy looks like? How do I get aligned with like mass media partners around paying for outcomes, and paying lucrative outcomes. And now I have a an ROI positive channel, where price is not going up every day, or my advantage doesn't just get burned out every 30 days as someone copies my my cohort that I've built. So I think this is the thing that's not talked about the reliance on the Tripoli and just the fact it's like housing, it's just the price just goes up and up and up and up every day. And people don't have I mean, in housing, they might have more and more money right these days, but companies don't have more and more margin. So pretty soon, I think a lot of companies are going to see their top acquisition channel just have a net negative ROI. And then they're going to be panicked and looking for something new. So we've always said like, this has been a very understandable, predictable, sustainable channel for a while, it's just a little more like SEO and that you have to do the work upfront, and then you get rewards over time, rather than you can pour money on it and get an instantaneous result.

Aaron Conant  18:03

Yeah, awesome. Love it. I'm going to jump out to Scott Scott, you want to jam brief intro on yourself and the organization be awesome. And then how do you look at you know, affiliate marketing affiliate partnerships is something you guys are jumping into today. You know, it would love to hear your thoughts on it that obviously, if you have any questions for Bob, feel free to ask away. Sure.

Scott 18:23

Thanks, Aaron. So my name is Scott, Performance Marketing Manager. Not as well versed and experienced in affiliate marketing and are different partnerships, as I hope to be after some more conversations and engagement like this with you guys and others in the space. But I recently took over as a manager the channel, we have an affiliate specialists who manages our commission junction relationship with our partnerships. And as I've gone from kind of a siloed, marketing channel manager to now like a multi channel manager I kind of look at, I break out our strategies in those different channels based on like how we're interacting and where we're interacting with the customer. So look at where can we find a customer who's in the market for inspiration related to home improvement? Where can we find customers that are at Product Search level for their specific project that they're working on their home? Where are where can we find that customer interact with that customer when they're searching for pricing, where a reason to buy affiliates is expanded into kind of all three of those areas. So as I've dug in, it's it's been somewhat of a of a lower focus, I would say for our business. But the opportunities for finding customers in those unique areas is different than a lot of the other marketing channels we had. I haven't even gotten into as Bob kind of mentioned the idea of pricing, the pricing model for affiliates and partnerships and how the control of that can really push and help with the bottom line of your marketing efforts and how they influence business and revenue for your company. So that's something of a takeaway that I certainly will, we'll start to look more into and how other channels are kind of not necessarily working on that same model. We are in the process of looking to evaluate the way that our partnerships and our relationships are, we've done some work over the last couple years in the digital marketing department as a whole to work better in housing or technology and setting up kind of more direct relationships. And again, as Bob mentioned that that was that's a media buying and a programmatic directive, but now also trying to get more one on one with our performance in our affiliate and partnership, and influencer arenas. So one of the partners, you mentioned impact, we are looking at evaluating them, as I said, we've had a long standing relationship with Commission Junction, a question kind of for Bob, are you seeing partners kind of jump from a affiliate partnership, technology platform from one to another? Are you seeing them add multiple technologies and kind of use maybe different strategies across those technologies? How do you see kind of those relationships and partnerships growing?

Robert Glazer  21:29

Yeah, I think the multi network thing has been a myth for several decades, where, you know, the sales people from every network would say, oh, jump onto ours, and, you know, totally different publishers, the publishers go where the brand door is. So if you're a great brand, they will come to your program. So I my, unless you're a global or have different things in different markets, I think it's you build one good program. But But as you say, I there's much more movement towards that I just, I haven't seen the large enterprise brand, you know, not launch on SaaS, you from the beginning to start and the movement out of it. It's just following other channels have, you know, people say to us, are you worried about being disintermediated, in your work because of in housing, and I'm like, we help all these clients build their in house programs. So that's already, that's already sort of happened. You know, the reality of is, if you're talking about a global program with 10,000, partners in 10 countries, and using all this tech and stuff, that's not their core competency. So the team in house really works on being the liaison to, you know, what's going on, what do we need to know, where we help is like, you know, servicing those 10 that I mean, try over, you know, it's like, 24 by seven customer service from a partnership standpoint over like, you know, the beginning of December and otherwise, and they're just not, not staff to do that. So, you know, we work with in house teams, but again, it's really this extension of, we have tools, we know how to use these platforms, we have the tools for, you know, it's like you hire a Facebook firm, because they're the experts in Facebook, you know, but they're doing it on your behalf. So we have lots of tools for recruiting, we have a database of 50,000 partners, we have a lot of data on who's done well in different areas. So but that doesn't, that doesn't remove the need for people in the company to be working on the on the program. I think that's a that's a misperception like, you know, we have 15 people that work on eBay's program around the world, but they also have a seven person team. It's not it's not really one or the other.

Scott 23:26

Yeah, we've we've certainly kind of felt those pain points, I think in conversations with the person who oversees our actual relationship with CJ and the affiliate partnerships, it is a lot of hands on, and there's a lot of help from, from those partners. But, you know, I can't help but think sometimes, because we're an enterprise business, and I'm sorry to kind of take this over on a DTC call. But we're, we're probably missing out on some, some, what we would consider smaller affiliate partnerships are smaller partnerships, that we just don't have the ability to keep building to vet and and to grow, to be honest, you know, it is a back and forth relationship of supporting that those partners so that they have, whether it's content or opportunity to kind of promote our brand, and then us getting the chance to kind of grow it. A

Robert Glazer  24:17

lot of work to look someone on your team would say, Here's what's coming up, here's the campaign, here's our ideas, then translated care that executing and getting to people following up with them. You know, there's a lot of heavy lifting around that, you know, you bring up an interesting point, too. And I think what the SaaS and agency sort of separation model has done is it as for some better accountability, like, like, I think four years ago, networks always said, yeah, that's on our roadmap, people said, We want coupon control, we want compliance. It's on our roadmap, kind of went against the performance fee. So it wasn't, you know, kind of dubious that it was going to be on the roadmap. But there was always just as one page agreement and said, Hey, we helped with your program and it's 30% I think now people are saying what like, here's our pay for services, what type of team I'm going to have, what kind of seniority? How many partners they're going to manage? What are they going to do? And then here's what I want from Tech. And the tech firms can say, look, here are the changes that we're coming out with every quarter. It's kind of SAS, like it gets upgraded every month, what do you need? I just think there's much better. I think tech and services are actually really different things program management, like, when you think if you think Facebook, if you think search, if you think if you think Google, if you think, you know, HubSpot or anything like that, like creating the software is very different than managing and running programs, using the technology. And for some reason, it's all been put together in the affiliate space. But I, I think the process of asking for separate RFPs for services and tech creates much better accountability to both.

Aaron Conant  25:50

Awesome, love it. Just to remind if you have questions drop into the chat, I want to jump out to Colleen next, Colleen, if you can jump in. That'd be awesome. And we'll just ask them mute and bring you in when you when you get a chance there. You know, Colleen love to have you know, your thoughts in this space? You know, how are you looking at affiliate marketing and affiliate partners today? love to have your thoughts on performance side is working. And then obviously, if you have any questions for Bob, feel free to ask away, but going

Colleen  26:22

Hi, I'm Colleen. Would you say?

Aaron Conant  26:26

Is it Happy Wednesday?

Colleen  26:27

Oh, hi. No, right, almost the end of the week?

Robert Glazer  26:30

I thought it was your Birthday. And I was gonna say what are you doing here on your birthday?

Colleen  26:33

Hey, honestly, My birthday is Wednesday. So I don't know, I thought you knew somehow I will.

Robert Glazer  26:38

Happy birthday.

Colleen  26:39

Thank you. Honestly, I'm very new to the affiliate space. I used to work and just display ads before I came to do affiliate. So all this is still very new to me. So I don't have a lot to say honestly, I'm just trying to continue to learn about everything.

Aaron Conant  27:00

Awesome. So in t hat case, like, you know, thoughts, because I think there's probably other people on the line as well. Like, what is the first step? Right, that that you would say, hey, number one, this is why you want to do it. Number two, these are the performance, you know, metrics you need to look at. And, you know, we'd love to hear your thoughts there. Yeah,

Robert Glazer  27:19

I think really understanding the nuances important to be an advocate, particularly around the issue everyone runs into is budgeting. Because this is actually a channel that should not have a budget. And I don't mean that in sort of a, you know, flippant way but it but, you know, if you were sitting down with your enemy saw this during COVID, where people just turned it off, you know, they weren't expecting a 400% increase in online sales. And they said, Oh, turn off, the programmer said it went to zero, we're out of budget, like whoa, wait, if you like $1, for eight cents, you should like $2 for 16 cents and $3 for 24 cents, like as long as this is all quality. So I think I think in order to the channel requires advocacy internally, and that really requires understanding it like the partners and the economics and how it works. Because really, you should have an agreement with your finance team that you'll have a sort of ROI and quality threshold. And that you know, as long as that is being achieved, that more budget will be available no different than sales, you don't go cut off your best sales guys, they let you know you're at a quota halfway through the quarter stop selling, I mean, people do this stuff and affiliate I've seen it in December, they go out of budget, set all our partners to zero. I mean, imagine if you do that to their sales team, and then ask them to like come back the next month. So I I really think it's important to, you know, understand those nuances kind of get up to speed, because I think it's it to take advantage of all these opportunities, you've got to become the internal advocate for the channel, it requires kind of sitting down with finance and marketing and explaining what it does and how it works and why it is an outcome based spend and how to get everyone aligned on that. So call me we've got lots of like, one on one guides and material, a lot of stuff, try to you know, help you get up to speed so that you can, you can be an advocate internally, because that's where it comes in the opportunities come from, I think it's when people say Hey, did you know that like, you know, we can work with these, you know, all of Vogue's media properties are interested in doing a performance based deal with us, you know, through the affiliate. It's just not, that's not the normal stuff that people or the partner channel are used to hearing about from the affiliate channel.

Aaron Conant  29:21

And I think it's it's relatively new, when you look at the history of marketing as a whole. And you know, a lot of time at an executive level getting approval for something, or a new program as a whole or bringing on a new vendor in the space. You know, is especially if you're talking Hey, it's gonna take a little while to get it up and running is something that is tough. How do people pitch it internally? Right, is it a numbers game?

Robert Glazer  29:45

Yeah, I think it's really an explanation game. Like, people hear a lot of things like one of the things in performance partnership, my whole first chapter is section is about all the cheesy stuff that people didn't affiliate 20 years ago, like, let's get that on the table just like all the shady stuff from programmatic or otherwise, when you create an incentive, and there's no look that the affiliate networks 20 years ago were the fox in the henhouse, right. They represented buyers and sellers in the same transaction. And so it's really not surprising that that didn't work very well. If you had gone to Facebook, or Google 10 years ago, and say, we want you to be our paid search agency, like they would have bought a ton of paid search ads, irrespective of whether they worked or not, somehow people knew not to do that in search, but they did not and social, they understood separation of church and state, but they didn't in an affiliate. So So I think there's some we talk about all that stuff. I think, again, there's some education, just explaining the fundamentals, explaining that you can pay for whatever you want. And this is where I think it's really important, if you don't, not up to speed on the technology is not what you do is work with, you know, someone who's an expert on it, or bring them in, because, you know, if some GM said to me, oh, well, coupons and affiliate stuff doesn't work. That's not our brand, like, you know, someone who did not they say oh, okay, like, what I would say is, Oh, you don't. So you don't believe in coupons. Like Let me tell you, I also don't believe in made up coupons that say, you know, click here to get 20% off. But did you know that technology today supports, you know, coupons only for new customers, you know, coupons that that were above, you know, $300 ad size or something like that we can only pay out on those offers, we can tie them to certain publishers, also, we can ask them to blast it to, you know, 20 million people on text and drive them to an in store, purchase and have that coupon only purchase, if they redeem it in store on a guy with a certain period of time. They'll be like, Oh, those all sound great, like, but this everyone paints was such a broad brush, we had a brand during the pandemic of ours part of a fortune public company. And they're like, we don't do coupons. They were also sitting on a crap ton of inventory that they were not going to move like it was winter, and it wasn't going anywhere. So we said Look, why don't we try a coupon with like a $300 minimum, the orders that came in through the affiliate channel, like double their ARV on the site, and moved all this inventory that was gonna be locked up for 12 months, and they were thrilled with it and wanting to do more, that's very different than a coupon partner unmanaged or managed by someone who gets paid more money based on the more fraud that they have, you know, having an offer that says click here to potentially save money to someone in the cart. So I, the problem with the channel is is is there a lot of you know, there's no Google feeder, or Facebook feed, or there's a lot of first time people in it. They're just they don't have, you know, the nuance and the depth of understanding to have these sort of conversations internally, which are really important. Because when you paint with a broad brush, like I said, No program today should just be Hey, we pay a percent of commission, a smart program should be Hey, we pay 10% of commission for new customers 4% returning By the way, we block all commissions on you know, offers that happen, the last two minutes of the cart without coupon being put it like it would all be designed to pay for the right behaviors and not pay for the wrong behaviors.

Aaron Conant  33:07

Now, I love it. Because I think that's where, you know, a lot of the concern came out was you know, nobody wants to know that, hey, they're in checkout with $200 worth of items. And like you're saying they bounce out to a coupon cabin. And when Yeah, discount code for

Robert Glazer  33:26

and then we got to understand why that happened. Right. And this is really important. I don't mean to get bashed in networks and let's let's talk 10 years ago, but but but the person managing the program at the network, on your account got gets paid, the more the publisher gets paid, the more commission fee, and their personal financial incentives are, are everyday are about the performance fee. So if you are account manager and you say hey, what coupon cabins doing is like pretty shady. Like that reduces the feed revenue from your program. That is not how you get promoted. And you know, my favorite quote Charlie Munger, Warren Buffett's preferred partner, you know, show me the incentive, and I'll tell you the behavior. This is why there was such a collapse of the affiliate industry, like from, you know, 99 to early 2000s. It was all the rage and the model was right. But but the incentives were so bad, everyone was cheating, everyone's cookie stuffing, they were trying to be last in the people in charge of guarding that we're getting paid more by it. And it wasn't till it sort of fell apart. In the ashes. People still remember that. But then it had to come back and people say, look, the paying for outcomes is the right solution. But we need to have some quality control in here. We need to have some attribution, we need to have some different incentives. There was actually a massive lawsuit we talked about with eBay in the book where like someone, you know, I think CJ was managing the eBay program and there was like $30 million in fraudulent commissions paid to these publishers. And the account manager at eBay was new, you know, was getting incentivized on it. You know, see it like no one everyone knew something was wrong, but no one was making too much money to say something and people ended up going to jail over that. And I think that was actually the sort of watershed moment of the industry to say, look, we got a, we got to start thinking about checks and balances and quality and not just volume.

Aaron Conant  35:14

Yeah, I agree. And I think that's, you know, anybody on the call if you want follow up more information, it's worth having a conversation with Bob his team, because they they come as you know, that that source that people trust at this point in time for growth, and that's, it's, it's incredibly important, because you're right, like, it was kind of like this really muddy muddy place for a while, and you will know you had to play there. But, you know, didn't ever feel great about it. But

Robert Glazer  35:41

let's not not different than programmatic, right? I mean, you know, five years ago, people were selling, reselling, marking up like getting kickbacks, like I, you know, totally unregular, I mean, just not dissimilar. And it led to, people are still doing programmatic these days, it's just being done in a completely different way with much more trust and brand control and incentive alignment. So that's all the same things that have come to the partner space.

Aaron Conant  36:06

So what are you seeing like as advancements and I want to jump out to a couple more people, like what's the when you see brands on board and get it up and get it rolling? What's the next level that they they take it to? And then I want to talk a little bit around, you know, the agency of record and why it's a fit or not a fit. But

Robert Glazer  36:29

yeah, I think the Tech has really gotten a lot better, right? So you have, you have tech companies that are developing tech, you know, they're developing, if you have multiple brands, if you have multiple countries, if you want to do this kind of dynamic commissioning, if you want volume based commissioning, again, just more like tech partners to these brands, say what do you want to do? I think the private label model has also really helped, you know, companies say, look, this was a business development partner, let's just say it was like a, you know, a virgin, you know, let's not a delta, you know, does a deal through their partner management system with Ticketmaster, this could have been a bizdev deal years ago, just you know, after you book a flight from Boston to Seattle, it lists all the tickets and concerts in Seattle, and it's a click through CPA base thing like that would have been a bizdev deal, you know, years ago, and then that's kind of falling into the new partnership channel, as is mass media as is, like we're working with all the, you know, I don't know what the category is the new sort of digital layaway companies like klarna, and all of them, well, not only do they do that, but they have like, once you're in there, they have storefronts, right. And they can recommend specific stores or products and otherwise. So they've all jumped in as performance based, you know, partnerships. And if these things that gone to the biz dev team, they'd sit for six or nine months, some of them aren't big enough. But if you say, look, we can get you up and running on this under our sort of standard partner program, you know, in a day, just sign the agreement, which is really in our favor, set up your account, and we can get going that that's that's what we're just seeing a huge range of partnerships and sort of our services are reflecting that you you want influencer, you want mass media partnerships, you want a custom BD recruiting team, like it's, it can go from one person a month to 10 person a month, depending on how big of a channel you want to you want to build.

Aaron Conant  38:20

Yeah, I just love I just think, from a business development standpoint, really unique, you know, extension to performance marketing, but when it's busy,

Robert Glazer  38:28

we take their trash, we first thing we do again, if that if that was a fair who said before, Colleen, you know, what I would do is walk I go over and walk over to the biz dev team. And I'd say hi, you know, I'm calling and I manage our partner affiliate program. By the way, if you get a deal, and it's just too small, like if $10,000 a year doesn't get you out of bed, please send them to me, like, I'll send them up on our partner program, I'll give them a link like I can have them up and running in a day. And they don't need all this customization. If they don't do anything, we don't pay them. And if they do stuff, you know, we pay them. So we've had a lot of brands, we're just understanding what business developments threshold is for customization, and then putting everyone else on a standardized program.

Aaron Conant  39:07

Awesome. Love it. I have a question that comes in here. My company's a C brand. Would you have any recommendations on treating affiliate programs differently from driving? DTC traffic versus Amazon traffic?

Robert Glazer  39:20

Um, yeah, so the trick here is, Well, a couple things. We're actually testing Amazon affiliate programs for people that sell on Amazon, Amazon is actually opened up their attribution pixel. So now, potentially, there's the ability to have an affiliate program on Amazon, not their program. But the problem is, if it's a commodity product that's sold elsewhere, you're competing against Amazon's affiliate program, right? As much as you're competing against Amazon. So you're probably going to have to pay higher. It's a lot, sometimes just a lot easier for people to work with Amazon's affiliate program because they're a million products. So I would really think about, you know, what does it cost what How much more if Amazon's paying 3% and you're paying 3%, something's wrong, because your cost of selling on Amazon is a lot higher than selling directly. So So this is where also I see sometimes I remember you're paying a commission after the fact, like, you should have tears, you should be generous now your best offer but put your best offer forward, because that's what's gonna make people work with you. I've seen companies paying 12% for paid search and paying 6% to their affiliates. I'm like, I don't understand that one of these is on a click basis, and you're hoping to get the outcome, the other you pay for after you like how can those not be near each other? So So I in a DTC model, I take a really good look at the economics, you might actually reach out to people who are doing it through Amazon and say, Look, you know, if you do this for through us or send to DTC not only to get, you know, is it worth a much higher commission, to the publisher, but also for you, you get the customer, I think we have a lot of clients that sell on Amazon or otherwise, but they've done some unique affiliate promotions, because that customer may never have bought the brand before from the brand. They'd only bought it elsewhere. So it's very different for the brand and worth a lot more to get their name, address and phone number.

Aaron Conant  41:10

Are you doing then, like these strategy sessions as a whole? Because I think that's, you know, you engage with a new brand, are you able to walk through and say, Hey, this is where you're at today. This is what the new world of affiliate partnerships looks like, I,

Robert Glazer  41:27

our sales team or opportunity, our sales team is actually a strategy team. So they sit down with a brand, they look at what they're doing, they'll do an audit of the program, they'll build a model with them. And they'll say, look, here's what you can do. You know, it's a tricky budget thing, because it's not sometimes it's like, some people say, look, I can only afford to shovel this much dirt. And so it's great. Here are the expectations for our program before shoveling this much dirt. But like I said, the other discussions are obviously a 10 person sales team is going to sell more than one person sales team, right? So if you can afford it, and you would like a larger partner development team that's doing a ton of recruiting, working in different markets working across products, like, yeah, there's discussion of whether, you know, what, what is the ROI look like and putting a, you know, a level of effort against the channel B level of effort against the channel or C level. Sometimes people just don't have the money. Other times, it's like, well, I'll definitely spend, see if you can tell me, what's the return, I would get on A, B or C and they say, look, let's do c because I'm willing to spend that money if the returns there. And this is the biggest problem with affiliate programs not dissimilar to sales, we run something called the affiliate giants network. Every year, we bring the largest programs together, it's kind of a mastermind. And the biggest takeaway from all of them was like we don't recruit. Like we're actually just responding to the people that ask us stuff. Like it's kind of like sales responding to the calls that are coming in. What grows up program is a dedicated outbound recruiting team, like a sales effort. And that's what most programs don't have. So, yeah, it's growing five or 10%. Because like, that's who's ringing their phone, but if you really want to go pro program, you gotta be calling the people who be a good fit for you.

Aaron Conant  43:04

Awesome, love it. I'll let you jump out. And Becca, Becca, if you can jump in, he has to ask them you here. That'd be awesome. Just you know, love to get your your insights and be can't come off mute. completely understand, but if you can unmute and we can bring you in the conversation. Yeah, a Becca would love to hear, you know, help the organization. And then yeah, have you looked at affiliate marketing? Is this top of mind for you? Is it something you're doing actively, then obviously, you have any questions for Bob to ask away?

Becca  43:35

Um, yeah. So I think for us, this is more of just kind of an explorator Tori thing, like we're learning more about it. We are building up our influencer network. Currently, we're trying to start working with an influencer agency, all of this stuff. So I think, you know, the affiliate piece of that is just another building block that we could potentially, you know, explore in the future. So far, no questions. That's been great, though.

Aaron Conant  44:01

Awesome. And in thanks for jumping in Vegas. If any insights there for Becca, I mean, bringing an influencer? Again, I know we tackled that at the beginning, just getting the outset which I think the reality is I think a lot of people jumped into affiliate and then they backed out of affiliate and now they're waiting for and I've done

Robert Glazer  44:18

that with influencer too. I mean, it was like the number one thing that was turned off like during the pandemic and there's very, very different types. Yeah, I would also say again, What's your goal? So, I you know, we have we are building an influencer offering we are pretty aggressive in m&a in that industry and expect to have like several offerings in the next couple of months. One of the things in talking to all the firms out there is that like, not understanding your goals. So, you know, organic influencer, typically like does not have a positive ROI. If you're not looking at as part of your media mix. Like that's one way to look at it. Otherwise, if you're trying to measure it on a on a performance basis, you're going to need to put some paid spin against it. So we like the influencer model where even if it's not fully paid on performance, it's tracked and measured. So you understand what you're getting. And you understand what it looks like, you know, if you don't do anything against it, or you put paid paid spend, again, I think one of the things that people are missing is that, you know, if someone has a million followers on Instagram, or Facebook, Facebook and Instagram has so throttled down organic reach that they might tell you, they have a million followers and like they only reach like, 100,000 of those organically now, so so you're not going to necessarily reach all their following. That's why I think the metrics on this stuff are really important to understand, what's the high level face value numbers you're getting? versus what's the reach? What's the engagement? What's the conversion, and the consensus I'm really hearing is the ability to put paid spend on top of that, and sponsor things is what it's driving a lot of the performance of, of influencer.

Aaron Conant  45:53

100%. And if you look at it, you know, even back 15 months ago, you know, metrics in this space, you know, kind of wishy washy for some larger brands that are out there, they're just getting into the to see, and now, a lot of focus on what are the metrics behind all your paid media budgets as a whole? How are you spending it? What's driving growth? What's not? How are you attribute in any right? What's

Robert Glazer  46:15

the attribution? Right? I mean, because it might be the influencer opens a lot of doors for you, but another channels, closing all of them. And so you got to figure that into your into your pricing.

Aaron Conant  46:26

100%. So I want to go back to just one other question was around the agency a record piece, and, you know, it doesn't seem to like necessarily fit, maybe they are wrong, but a couple people like pinion about that, we'd love to have, you know, your thoughts on, you know, the agency of record model and how it fits into affiliate partners.

Robert Glazer  46:46

I'm very biased opinion on this. So let me state this upfront. I think they are models sort of broken in general, because I I've just seen, particularly affiliate space, or companies say that, you know, they have affiliate because they don't want to lose out on something. And then they submit to someone who subs it to someone else. Like we've literally been like a double sub. So like, this is a, this is lending out your brand channel licensing your brand, like they call someone on the display team to come in and work on it. Like, to me a practice. And you're talking about this is an industry where there's five different platforms. It's not just like Google practices, when you have five or six people that do the same thing. Not Not that one that does it. So I have found that companies who understand this channel deeply, almost always go outside the AR model, they find a specialist knows how to do this. As I said, I think partnership is a channel now with multiple tactics. I think that's very different than a law firm has got one affiliate person with a half year experience working on five programs. But the reason they those five programs is not because they really had it was just that having affiliate checked off at the box was a requirement to get the $2 million dollar programmatic spend. So I, I feel very strongly about this. Again, it doesn't have to be us there are other specialist firms out there. But I just constantly find the eo r firms representing capabilities that they do not have in this channel.

Aaron Conant  48:13

You know, and that happens, actually, as you mentioned, it makes sense across the board. You know, I see in some of the big ones and also offering like an Amazon advertising platform, and then they send it out who subs it out or they have one person on it's the same thing, hey, I want the paid search and social budgets. So I'm gonna say I can do Amazon or it's in the three pl space. Well, yeah, we can do individual pick pack ship, even though they really can't do it. I agree with you 100% from that standpoint, that you find somebody that's a specialist in that area. And that's actually what they do, rather than going for the universal solution. Because it's a little bit easier. This

Robert Glazer  48:51

applies to smaller firms. I've always said, if an agency ever has more practices than people on their site, like that's not a good that's not a good sign. Practice to me is 10 people to do the same thing.

Aaron Conant  49:03

Is there is there a sweet spot for companies that this works for or a vertical or a budget or anything like that I get asked those questions. right for me. And

Robert Glazer  49:19

I we actually think that affiliate is best after you get to certainly like you know, a lot of companies will have a program over a million in sales. I think it's good to when you get to five to 10 million, your models figured out your pricings figured out it is not a good first channel because you have to go to people if you're a new brand in the market, you have to ask for shelf space. If it's not working. You do not want to experiment on these partners because they will not be very happy. Like we got to ask for a for a company we actually turned them down. They were coming to the US with like unlock SIM cards five years ago and they wanted to launch with affiliate and we're like no one knows what this is no one understand this is not a good way to experiment on this and The new market, you want to be able to go to affiliates, like when when you when you have your LTV really clear when you know what you can spend and all this stuff so that you can be go with your best offer and be really confident and give them what they need to succeed. So I think five to 10 million online sales is when you start to have the type of scale where you can put the right resources on it below that it tends to be 1/5 of someone's job. And you can run a really small affiliate program, as long as you control it, you know, do no harm, no foul, but oftentimes, that 1/5 person just puts it on auto subscribe, and there's all this fraud, and we got to come in years later, and I'd rather start a program from scratch, then clean up a program, that's a disaster.

Aaron Conant  50:42

Awesome. So another questions coming in here from skagen? Are you seeing opportunity in the partnership space, from privacy changes, or challenges to overcome? For partnership program,

Robert Glazer  50:52

we are the biggest beneficiary of all these privacy changes. Because when you think about First of all, all the SAS stuff is first party cookie. It's not all this third party stuff. But when you think about it, a lot of these other things require understanding the demographic psychographic of the user, and then trying to find them when they're online and match up something to them, right. It's totally based on profiling the person. This is all our industry is based on context. So like if the top blog on hot sneaker shoes is then sending people to those shoes and sneakers, I don't need any PII to do that the brand's super psyched to be associated with content, that's the right thing and they don't grant it, that site might want to log in and get some first party data. Like they're making a bet that people looking for coolest handbags want to buy handbags, they're making a bet that people are looking at, you know, refrigerator reviews, one refrigerator, it is not about that they are a 34 year old male who has these qualities in their in their profile. So So I actually think that the partnership space is is it Look, the privacy stuff makes a lot of things complicated and tracking. But I I think it comes out the best in terms of that by really not needing PII.

Aaron Conant  52:04

Yeah. Awesome. And I see, I might have. So I don't know, we can tackle this one really quick. We touched on this briefly earlier, any tips on companies wanting to build up improve outreach to those who participate in the Amazon Associates program? You know, quick background, we have 10 million in revenue. And we'd like to continue it Amazon Associates members promote?

Robert Glazer  52:26

Yeah, so people, people promoting Amazon or Amazon's affiliate program. So like, the problem is, that's Amazon, right, you don't get any of that data, you could certainly reach out to them, give them ideas, like almost like a Content Agency and sort of help them do better and Amazon's paying the commission, you can try to recruit them to your direct program instead and pay them more. Or there's a third option that's emerging. And again, our team could talk about this where where you can have, they can have their own affiliate program on Amazon, or like, if it's a natural store to Amazon, like you could operate an affiliate program on Amazon that is literally just emerging as a space, we are in the middle of a bunch of pilots, because they're these totally native brands. And they're like, Look, we know that people go to the Amazon affiliate program, but we're willing to pay people more we've got the money, we've got the economics, but but we need the conversion data be able to do that. And so Amazon finally opened up the conversion pixel, and you can make it work. It's if you need someone who knows what they're doing. It's all it's all say it's complicated.

Aaron Conant  53:30

Awesome. Well, I see we're literally right at time here. You know, I want to thank everybody for dialing in love the questions. Thanks for those we're able to get out to unable to jump in. You know, look for a follow up email from us. I'd love to have a conversation with you on digital strategy. We don't sell anything here BWG Connect, but we'd love to pick your brain and other topics for future calls. Like I said, it will be for follow up or more information or help in this base. I mean, Bob, and the team and Acceleration Partners just all around great friends, partners, supporters, the network working with multiple brands, and they come highly recommended Is it like the most legit company there is in this space as a whole and they're just all around great people. So I'd encourage anybody have a follow up conversation with them. Well worth your time as a whole have them do that strategy session. Just I hear all around great thing. So worth your time for sure. Bob, key takeaways here as we wrap it up.

Robert Glazer  54:21

Yeah, just don't don't paint with a with a broad brush in the space. There's really customized strategies that you can do to support your business. I think whatever you knew from 10 years ago, is probably not as relevant anymore. So I think fresh eyes and new ideas and then really being that internal advocate for the channel will will create some real opportunities.

Aaron Conant  54:42

Awesome. Well, with that, I think we're gonna wrap it up once again. Thanks, everybody who dialed in fantastic conversation. hope everybody has a fantastic Wednesday. Look forward to having you on a future event. Thanks again, Bob, for your time today. Everybody. Take care. Stay safe. And yeah, we'll be in touch already much. Thanks.

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