Georgia Hudson, JAPAC Marketing Director at Partnerize, explains the fundamentals of affiliate marketing and global partnerships and how to leverage trends to drive growth.
To what extent are Australian retailers incorporating affiliate marketing into their strategic growth plans?
Affiliate marketing is growing in Australia. According to the IAB Australia 2024 Affiliate and Marketing Partnerships Report: 53% of advertisers and agencies have increased their total spend on affiliate and partnership marketing in the past year, and 63% of advertisers and agencies plan to increase their spend on affiliate and partnership marketing in the next 12 months. However, several barriers prevent all retailers from fully adopting it as a primary marketing channel.
According to research from Partnerize and Forrester Consulting, senior marketing executives often don't fully understand the potential of partnership marketing. Challenges in measuring the value derived from partnerships and a traditional tendency to prioritize other marketing and sales channels are impeding growth. While there are signs of positive change, the only sure way for retailers to fully embrace the channel is to recognize and overcome these barriers.
What are some notable trends in affiliate marketing in Australia?
There are several key trends emerging in affiliate marketing across Australia. Here are the key trends retailers need to be aware of:
- Diversifying Partnerships: A diverse partner portfolio should include content, loyalty, coupon, social, shopping comparison and pay later partners. The development of dynamic delegation and attribution tools by software providers has enhanced revenue attribution to partners involved in the discovery or influence stages of the consumer journey, thereby increasing partner presence and encouraging category diversification.
- Influencer opportunities within the affiliate channel: The creator field is fragmented and complex, with less than 25% of influencer spend currently measured on conversions. The challenge of pay-for-performance measurement adds complexity. Achieving results requires a combination of human engagement and quantitative capabilities, making vendor spend integration difficult despite budget pressures. The opportunity to engage with influencers in affiliate is primarily in micro and nano cohorts competing to get a “foothold” with brands, who can demand upfront sponsorship fees and don’t have the followings of macro-influencers willing to work on a conversion basis. Bottom line: The playbook for how to work with influencers in the affiliate category is still being written.
- Channel Understanding, Awareness and Education: Senior-level marketers are often not fully aware of the impact of affiliate channels. They tend to prefer other channels such as paid search and social media because they are familiar and easy to use. The inability to effectively measure the performance and contribution of affiliate channels is a major barrier to their widespread adoption.
What challenges do retailers face when trying to start an affiliate program?
One of the key challenges is ensuring channel readiness. Success and brand satisfaction depend on several factors, but where should a brand start? Evaluating annual paid social media and paid search spend will tell you about your brand's awareness. If you are not actively investing in these channels, you should proceed with caution as you may not be ready for affiliate marketing. Initial advertising budgets should be focused on the key channels that are most effective at building brand awareness. Eventually, brands will reach a point of diminishing returns. Only by meeting these prerequisites can a brand expect to see big wins and success with affiliate channels.
What strategies can retailers implement to maximize the benefits of affiliate marketing?
Retailers need to work with a variety of partners, including influencers, content creators, and brand ambassadors, to drive business growth and increased revenue. Leveraging a partnership management solution provider can help simplify this process with tools for discovery, recruiting, optimization, payments, brand safety, and fraud prevention.
Why is the partnership channel important for retailers today?
Partnerships offer significant value to marketers due to their cost-efficiency and broader ability to target both new and existing audiences. Despite this, partnerships often don't receive as much attention as major digital channels such as paid search and social media, which are largely controlled by major players such as Meta, Google, and TikTok. Marketing managers face the challenge of convincing CMOs and other senior executives of the benefits of partnership marketing. These challenges arise because senior marketing executives often find themselves in the following situations:
- There is a lack of comprehensive understanding of partnerships and affiliate marketing strategies.
- Prioritize channels that you are more familiar with.
- The impact of partnerships on overall performance is difficult to measure precisely.
To address this issue, Partnerize works with third-party research groups, like Forrester, to commission studies on the impact of partnership marketing. By providing senior marketing executives with hard data, they can realize the massive value that a strong partnership program can bring to their business.
Why are retailers starting to explore global partnerships?
As brands expand into international markets, they are increasingly realizing the value of partnership marketing. Partnership marketing offers the opportunity to reach a broader audience by working with partners and content creators who have local market expertise and have already established trusted relationships with local audiences. This approach has proven to be very cost-effective as partners are paid based on performance. Partners can help brands expand internationally by leveraging their ability to understand local languages and regulatory frameworks. Partners often have local resources that new brands lack. Local partners can provide valuable insight into the competitive environment and advise brands on successful strategies and pitfalls observed in the region.
Partnerships provide a cost-effective avenue of growth, allowing organizations to engage with audiences, increase brand awareness and drive demand and conversions in global markets while offsetting costs associated with other increasingly expensive channels such as search, social media and display advertising.
What steps should retailers and brands take to foster global partnerships? How is this different from traditional partnership models?
When considering international expansion, companies and marketers must thoroughly understand the complexities of their target markets. These nuances include economic conditions, cultural differences, language barriers, competitive landscape, market maturity, legal regulations, and exchange rate complexities. In addition, marketers and CMOs must structure their organizations to effectively support this expansion.
Successful expansion often depends on people with a strong local presence, an entrepreneurial spirit and the ability to execute ideas independently and build strong relationships both internally and externally.
Given these market trends, marketing's primary objective is to identify strategies that resonate with local audiences and achieve desired key performance indicators (KPIs). Determining whether a physical experience or a digital initiative is more appropriate becomes important. Marketing initiatives must also address language nuances, deciding when global communications should be presented in English versus localized into native languages. Navigating and addressing these aspects of international expansion is undoubtedly complex and poses challenges for businesses whether they are entering a single new market or multiple markets.
Given the complex interplay of regional and cultural dynamics, recognizing and addressing these factors will undoubtedly influence the success or failure of global partnerships.
What steps must a retailer take to establish a successful global affiliate marketing channel, and what technology does it require to do so?
Brands need software that streamlines the labor-intensive aspects of partnership management and enables them to effectively allocate resources to strategic initiatives that drive profitable growth. Partnerize provides both the software and professional services to help leading brands leverage the partnership channel as a profit center, providing a sustainable, brand-safe and scalable alternative to primary sales and marketing channels through its Partnership Lifecycle module.
- Discover: Partnerize's platform includes a recruiting and activation engine to find and activate suitable partners from its database and broader digital ecosystem. Retailers can input specific audience attributes and receive partner recommendations based on demographics, location, reach, and other factors.
- Tracking: This API-first solution enhances partner channel analytics with a scalable and flexible tracking infrastructure. Retailers can seamlessly integrate with Partnerize using a variety of tracking methods, including first-party, server-to-server, batch and mobile app tracking, or leverage the e-commerce plugin to quickly activate their partner programs.
- managementPartnerize empowers retailers to optimize partnerships through effective communication, collaboration, and commissioning capabilities needed to drive profitable growth. Capabilities include the ability to dynamically reward global partners, implement incentive-based commissioning structures, and communicate with partners using action-based triggers.
- measurement: Retailers can gain actionable insights and develop data-driven strategies using Partnerize's advanced reporting suite. Integrations with analytics and attribution platforms ensure seamless data flow, eliminating data silos and enabling informed spend allocation decisions.
- payPartnerize automates the distribution of partner payments in partners' preferred currencies, facilitating global partner payments at scale.
- protectPartnerize’s “always-on” terms of use enforcement solution, powered by BrandVerity, monitors paid search and trademark violations, empowering marketers to maintain brand safety within partnership channels and combat increased ad spend from policy violators.
What role does Partnerize play in helping retailers establish successful partnerships, including on a global scale?
Partnerize has an extensive network of content creators and partners around the world, facilitating global expansion for brands by making the various benefits mentioned above available to them regardless of geography. From a technical standpoint, we enable brands to pay their partners in their local currency. Our powerful analytical tools allow brands to analyze performance metrics from various perspectives, both globally and at a local level, supporting up to 60 currencies in 214 countries.
Our unparalleled service team is located in strategic locations around the world and is a valuable source of insight and support as brands navigate global expansion within our partnership network.
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