30-second summary:
Legacy founders and experts have exhibited protectionist behavior in Affiliate Marketing, a behavior that harms today’s marketer.
Skilled affiliate practitioners have been held back and unfairly limited from increasing their ability to contribute strategically, by a category that has deliberately and systematically segregated itself from the broader marketing ecosystem due to measurement fears.
A continued dependence on the last-click attribution models that inequitably reward the cash-back and coupon publishers who have defined the category since its inception, does marketers a profound disservice.
The industry should worry less about recasting a narrative and much more about demonstrating that we are a rock solid strategic category built on integrity, having learned from our history and the history of other channels.
The C-Suite can benefit by using the category to create operating leverage and fuel sustainable growth.
Recently, Impact’s Matt Moore authored a byline — one part explainer and one part future vision — on the affiliate marketing space, relative to marketing as a whole. Meant to advise the modern marketer, it was provocative. But was it accurate?
Rather than dissecting the author’s premise and narrative, instead, in the spirit of actually serving the marketer, it’s worth examining the definitions and vision expressed — and offering a counter if not better primer as a whole.
To start, the piece enters the very blunt premise that putting affiliate inside marketing limits its import and therefore its power. Affiliate as an ecosystem — which it very much is — deserves a detailed look, so that we can understand key connections across practices and methodologies.
The legacy ecosystem
Within the affiliate space, there is a core group of category experts, an “inside circle” of high-integrity, intelligent, and entrepreneurial professionals. They are “in category” founders, or they are OPM (outsourced program management) agency founders that have bootstrapped their success over a sustained period of years.
There also exists a comparatively small, relative to paid search, paid social, and programmatic, but dedicated group of skilled workers who execute the day-to-day operation of affiliate programs.
These skilled practitioners have been held back and unfairly limited from increasing their ability to contribute strategically, by a category that has deliberately and systematically segregated itself from the broader marketing ecosystem due to measurement fears. That blatant fear is corroborated by self-indulgent rallying cries like “we proved it!”
Here, in the confines of this insular pocket of the industry, we also see continued dependence on the last-click attribution models that inequitably reward the cash-back and coupon publishers who have defined the category since its inception. This does marketers a profound disservice.
The limitation of this category, and as a consequence the professionals within it, stems directly from elitist, status quo operating principles fueled by insecurities that have manifested themselves in a “grading our own homework” approach to incrementality measurement.
We have systematically built our own walled garden of attribution without even having the consolidated power of a Facebook or Google to shield us. This ignores the fact that transparency is the only path to legitimacy.
The stark truth is that the skill set required to elevate the category is rooted in an understanding, respect, and operational embrace of an approach that recognizes that our channel needs to work in tandem with primary sales and marketing channels.
To enable that requires a collective move beyond the status quo and a universal commitment to supporting the development of a cross discipline or T-shaped professional.
This category has not historically embraced that equalized approach and that myopic failure by resident Founder elites, not its association with the marketing discipline, is the primary limitation to the careers of our most deeply qualified professionals.
Similarities to the paid search agency ecosystem of old
Interestingly, when I entered the affiliate category in January of 2018, I was immediately struck by the similarities to the paid search agency ecosystem of the mid 2000s.
During this period, SEM subject matter expertise was largely concentrated in two places; (1) the limited managed services function of the paid search publishers (GOOG, ASKJ, MSN, YHOO), and; (2) a concentrated cohort of boutique specialists that emerged and thrived based on the marketer’s need for channel expertise in both the strategy and day to day management of a rapidly scaling paid marketing channel driving material increases in customer acquisition.
But something interesting happened in paid search that has not yet happened in affiliate, even though I’m here to tell you it should. The channel earned its seat at the CMO’s table.
If you’re looking for a lagging indicator of that ascension and the related influence on the specialist ecosystem, look no further than my industry colleague, David Rodnitzky’s, thoughtful view of what happens when the boutique agency starts to die.
As David states, “Scarcity was at its height in the early days of SEM, when SEM was still a ‘nice to have’ for most companies…” So, the real question to ask is why hasn’t this dynamic taken off in affiliate marketing yet? Why have we not seen a wave of consolidation of OPMs akin to the holding company feeding frenzy on SEM agencies over a decade ago?
It’s not as Moore’s article suggests, because we are putting “affiliate marketing programs in the marketing bucket,” or because “keywords don’t have feelings, but partners do.” It is because affiliate marketing has historically failed to address the core challenges that today’s marketer faces.
That is ironically, a problem perpetuated by legacy affiliate providers. Because of that bias, affiliate marketing simply hasn’t yet earned its uncontested right to ascend in the marketing category (or any other for that matter).
Among numerous failures of inaction, our legacy network incumbents have largely failed to address the partner diversification challenge at scale, effectively hindering innovation as larger corporate parents siphon off cash flow for other operating businesses.
They are holding steadfast against opening up the black box of attribution, and reluctant to provide both supply chain transparency and brand safety and compliance solutions on par with what has been achieved in other paid marketing channels.
Conversely, companies like the author’s have focused solely on software as the catalyst for change, emphasizing shiny product features and marketing narratives that portend a new category, without any measurable commitment to the transitional work that must be done to elevate the category from “nice to have” to this mythic visionary “promised land.”
Learning from past mistakes
The key point that Moore’s article misses is that you don’t just get to skip over the inherent obligation to do the hard work along the way by recasting a value proposition to appeal to the CEO. There are no shortcuts and the ecosystem will not be fooled into believing otherwise.
We can’t just pen bylines to attempt to divert attention away from prior failures. As evolution in our space persists, that won’t age well. And, it does the modern marketer a disservice. Owning historic failures and the learnings they deliver are the key to overcoming them.
Expanding the addressable market, opening up larger budgets, shifting the vision forward over the horizon away from shortcomings for which we haven’t made contrition is on some level very smart. It’s a big idea and big ideas certainly matter.
In time, with hard work, we agree that those markets will ultimately be activated. But, the unapologetic attempt to shift the category away from the marketing discipline, the very discipline and budget that underpins their livelihood and future growth opportunities, does damage because, quite simply, it hinders progress.
What matters are the results themselves and earning the right to appeal credibly for market expansion that is predicated on a foundation of repeatable, scalable, and verifiable success in our core market.
Final thoughts
So what does that mean? The CMOs I know (and Chief Growth Officers or Digital Officers for the matter) understand the need to create operating leverage in their unit economics, and know that the place that occurs is at the intersection of scale, automation, and outcome- based commercial models.
What they seek is an affiliate channel that allows them to accomplish that through transparency, automation, and service, not to mention actually solving the business problem not just blatantly changing the industry narrative.
Not one of them has ever expressed particular concern over the semantics of category naming conventions that Moore seems to unduly rail against. Our chief marketers need help and our collective opportunity is to finally deliver on our potential.
Afterall, as Forrester states in its recent 2021 predictions, “Strong CMOs Will Own Their Companies’ Regrowth.”
The 2021 CMO is exactly where this category should be focused. According to Forrester, “CMO leaders don’t supervise from afar. They don’t hope that tools, processes, and structures set up for another time with a different economy will get them through. And they don’t wait for someone else at their company to figure out the answers.”
What that means is that businesses need to be omni-present. Every opportunity to convey a brand impression integrated with a performance opportunity must be capitalized upon. This is an expensive proposition and our category is perfectly positioned to deliver a critical subsidy to other primary sales and marketing channels.
We should worry less about recasting a narrative and much more about demonstrating that we are a rock solid strategic category built on integrity, having learned from our history and the history of other channels, that is ready to elevate and become the partner that CEOs, CMOs, Chief Growth Officers, Chief Partnership Officers and anyone facing and marketing to the consumer can count on to create operating leverage and fuel sustainable growth around the world.
That is the enduring partnership ecosystem vision and practical application on which we should all unite and aspire to deliver.
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