This post is sponsored by Impact.
Whether you’re a marketer, growth manager or you run your own business, we all have similar goals when it comes to revenue growth and new customer acquisition. The age-old question remains: How do I continue to grow my business and acquire new customers in the most effective and efficient way?
In today’s climate, achieving this goal might seem more difficult than before. Changes in consumer behaviour, and the dominance of big tech, have created more challenges for modern marketers; however, they have also led to innovation and the rise of new growth opportunities.
Battling the rising costs of traditional digital advertising
The digital advertising landscape has evolved significantly over the decades. What started out as the go-to strategy for all marketers – because we were able to serve targeted ads via online channels (search, social, display) – has now become more of a bane than a boon as we find ourselves stuck in these same walled gardens. Marketers have become over-reliant on these traditional advertising channels, even though acquisition costs are skyrocketing while performance is dwindling.
In fact, COVID-19 has supercharged the advertising ‘triopoly’ of the three tech giants as they now collect more than half of all advertising dollars spent in the US.
With Google’s upcoming removal of the third party cookie, it will be much harder, and much more expensive, to re-target potential consumers with ads (a strategy that often drives the most conversions). Coupled with the decline in consumer trust (69% of consumers no longer trust advertising), and changes in online behaviour when it comes to content consumption and product research, marketers need to explore other customer acquisition channels that can deliver what traditional digital advertising no longer can.
Affiliate marketing and partnerships: the third wave of enterprise growth
You may have heard of the term affiliate marketing, and it’s because it isn’t a new concept. In fact, it’s a proven growth channel and strategy in mature markets such as the United States, the United Kingdom and Australia. In fact, affiliate marketing is a US$12 billion industry globally, with $6.8 billion of that figure coming from the US. However, in Southeast Asia, it’s still often an untapped growth channel.
During these uncertain times, affiliate marketing remains a top revenue-generating channel for marketers because it operates on a performance-based model. And more and more brands are recognising the uncapped potential of affiliate marketing. Today, more than 15% of all digital media revenue comes from affiliate marketing and partnerships, and on average, high-maturity partnership programmes contribute 28% of a brand’s overall revenue.
Mature brands in Southeast Asia, who have witnessed the potential of affiliate marketing, are scaling their affiliate marketing programmes by tapping on technology to automate the entire process. They have also realised that affiliates are only one type of partnership available to them and that they can actually diversify and accelerate growth by partnering with any third party on a performance basis, including influencers, content publishers, mobile apps, other brands, and more.
Popular female fashion brand, Love, Bonito, launched its affiliate partnership programme last year and is already seeing the channel drive 20% of total new orders and revenue is growing 253% quarter-on-quarter. The company is working with various different partners from content creators and influencers to partnerships with other brands to help with its international expansion.
Another great example is Decathlon Singapore, the world’s largest sports retailer, whose affiliate partnership programme drove 50% of new customers in eight months with a quarter-on-quarter revenue growth rate of 156%. The company’s partners range from business institutions and sports clubs to influencers and content creators.
Automation helps scale partnerships to new heights
Technology to find, manage and optimise the entire partnership life cycle from partner discovery and tracking to partner payments and fraud protection is key in helping brands launch and scale successful partnership programmes.
Decathlon Singapore was previously dependent on excel sheets to calculate affiliate commissions and emails to various partners to get sales validation. It was a very manual process, making it difficult for the team to track success and even consider adding more partners and to expand the programme.
Since working with Impact's partnership management platform, it has saved about 49 hours per month of manual work, and instead used that time for strategic growth planning and building deeper relationships with top performing partners. It has also implemented a dynamic commissioning strategy to invest its budget more efficiently and pay partners based on their true value and contribution in the purchase funnel.
There’s no denying the fact that it looks as though 2021 will continue to be a bumpy ride for marketers in Southeast Asia and across the globe, but affiliate partnerships offer the opportunity to build on one another’s strengths, bolster weaknesses, share audiences and break out of traditional moulds to create a completely new revenue stream.