How COVID-19 Is Reshaping Affiliate Partnerships
Over the past two decades, companies of all stripes have embraced affiliate marketing as a way to drive quality sales, attract new customers, and generate high-value leads. What's more is that the model's pay-on-performance compensation structure has made it possible for brands to cost-effectively test campaigns with a variety of affiliates and optimize these partnerships to realize more incremental value.
The partners that brands are paying on performance include bloggers, influencers, mass media publishers, review and coupon sites — even other brands.
While affiliate marketing continues to be one of the most valuable channels for brands, it's proven to be particularly valuable during these challenging times. The drastic changes with the economy and consumer behavior have led many brands to reexamine not only their marketing spend, but the channels to which they are allocating their resources and budget.
Although there are many brands that have significantly shifted their budgets toward their affiliate programs and pay-on-performance partnerships during the COVID-19 crisis, there are also brands that have taken short-term actions within their programs that are likely to have negative repercussions long after the economy recovers.
The Impact on Partnerships
As some brands have had to close their brick-and-mortar stores and quickly pivot their product or service offerings, they've looked for cost-reduction opportunities anywhere they could be found. For some, this included compensation to affiliate partners, including publishers.
Brands have made the decision to delay, cut, and even stop commissions to the affiliates in their program. In some instances, their rationale was to conserve costs; in others, the brand felt that the heightened demand for their products meant that there would be less incremental value from their affiliate partners.
Amazon's decision to drastically cut commission rates to the affiliates within its Amazon Associates program is an example of this. Many large publishers rely heavily or exclusively on Amazon for their business, so this news came as quite a shock on short notice.
Still, other brands abruptly shut down their affiliate programs — often with little to no explanation to their affiliate partners.
In terms of revenue, cash flow, and long-term business health, many in the affiliate space are of the opinion that these decisions are short-sighted. Many valuable affiliates quickly pivoted their businesses by redirecting their promotional efforts to other brands who are treating them well and support the channel. In some cases, these other brands are competitors to the brands that shut down their program and set commissions to zero.
Leaning into Affiliates
Not all brands are taking this approach, however. Many are leaning into their affiliate partnerships to connect more efficiently and effectively with consumers who are actively looking for deals, coupons, and loyalty-based incentives.
The brands who are realizing the most impressive performance during these challenging economic times are brands who are keeping communications open and commission levels the same — or even increasing them — and prioritizing their relationships with their partners.
For affiliate partners who are wanting to develop high-value relationships with brands who treat their partners well and communicate with respect and transparency, here are some things to keep in mind:
Seek out brands that have a strong reputation for recognizing the work their affiliate partners do and have demonstrated their ability to communicate effectively and respectfully to their partners – even in difficult times. Brands that send an email or call to express a simple "thank you for all you've done," even if they need to pause their program or lower commissions, demonstrate that they value their publisher partners and the work they have done for their business.
You may benefit from communicating with brand partners and asking them if they can share their short- and long-term plans for the affiliate channel and your partnership. Consider their response and whether it is informative, empathetic, and indicates that they value your relationship.
Now is an excellent time for publishers to test new brand partnerships. Most of the brands who are successfully navigating these uncertain times have opened their doors to all sorts of new partners, some of whom they wouldn't have considered working with previously, such as coupon and deal sites. Partners that are open to working with new brands and trying different strategies can increase their customer reach and publishers' profits.
For example, a brand may need to move inventory, such as seasonal products. They can leverage deal partners who develop content and promote specific items or categories to their user base, creating a viral want/need for consumers. These publishers should emphasize that they have loyal users who rely on their sites for not only deals but content and recommendations. Remember that communication is key – brands will want to share their goals with partners to ensure they can plan and execute successful campaigns.
Plan ahead and collaborate with your brand partners to hit the ground running together when business begins to rebound. Expect brands to have multiple initiatives that they are implementing to respond to growing consumer demand.
It can be helpful to schedule a regular check-in with brand partners to discuss their current and long-term plans and brainstorm how their capabilities or initiatives can help them. For example, if a clothing and apparel retailer is expecting to reopen their brick and mortar store locations, promote buying online or curbside pick-up.
Gone are the days when brands and affiliates had more of a transactional relationship. The way brands treat their affiliate partners will have a lasting impact long after the pandemic subsides. Publishers are focusing on those brands that show empathy and respect and genuinely want to be a good partner over the long-term.
Robert Glazer is the founder and CEO of Acceleration Partners, a global partner marketing agency and the recipient of numerous industry and company culture awards, including Glassdoor’s Employees’ Choice Awards two years in a row. He is the author of the inspirational newsletter Friday Forward, author the Wall Street Journal and USA Today bestseller, Elevate, and of the international bestselling book, Performance Partnerships. He is a sought-after speaker by companies and organizations around the world and is the host of The Elevate Podcast.