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Tips & Guides — 27 Jun 2022
Evolution of Partner Marketing
As a concept, partner marketing seemed to have emerged out of thin air a few years ago. However, there are still ongoing debates about whether it is any different from well-known affiliate marketing.
Has the business really shifted to partner marketing or is it just a “mission drift”? Is traditional affiliate marketing, the one that started with coupons, cashback, and loyalty sites, long gone?
With the variety of questions, it might be hard to find uniform answers among industry players. For a better understanding of the much-debated “Partner or Affiliate” discussion, let’s take a quick journey through the evolution of affiliate and digital marketing.
There is a popular, yet misleading opinion that affiliate marketing started with the Amazon affiliate program. In reality, while Amazon definitely remains among the prominent founding members, they were not the first ones. It all started with the founder of PC Flowers & Gifts, William J. Tobin, whose brand was the first to introduce an affiliate program in 1989. Tobin’s affiliate program created the core concept of affiliate marketing, which obviously underwent a certain transformation through the years, but preserved its basic principle.
Later on, Amazon came along and set the start point for affiliate marketing. If not for the business development that Amazon brought in its own way, affiliate marketing may not be such a massive industry as it is today.
Along with Amazon, the other two big-name companies come along with: Commission Junctions and the Clickbank Network, the affiliate networks that remain among the most popular to this day. By facilitating exchanges between affiliates and merchants they allowed smaller retailers outside of Amazon to get involved with affiliate marketing as well.
The invention of cookies, eCommerce deployment, expansion of online publishing, and the rise of influencers made the idea of performance-based marketing more legitimate than ever before. Different industries were lured to try affiliate marketing as the promotion strategy, and it worked.
By 2006, affiliate networks were reported to be turning in with worldwide revenues of approximately $6.5 billion. By 2012 – app. $12 billion, according to a study by the Internet Advisory Bureau (IAB). This revenue came mainly from gambling, travel, personal finance, telecommunications, gaming, retail, and lead generation.
From 2006 till 2009, Facebook and popular at that time MySpace were starting to change the landscape of the Internet and the way people connect with each other. The ability to target a wide range of users on one website platform opened up a whole new world of opportunities for online brands and affiliate marketers.
Marketing strategies of many companies underwent a certain digital transformation. Since then one would always find ads and promotions on social media channels. Thereby, we see in 2010 attention started to be drawn to Instagram, a young but yet rapidly gaining momentum social networking service.
In 2011 Google Panda triggered many changes to Google’s search results, which resulted negatively on the low-quality website and subsequently rose the need for high-quality content. Owing to the Google Panda algorithm changes, the year 2012 became a year of content marketing skyrocketing.
In 2015 Pinterest drew huge attention and strengthened eCommerce programs by rolling out its buyable pins. They attracted even more traffic to the website, as many publishers and distributors saw it as a great opportunity to promote a product. According to Pinterest, with Buyable Pins being used for Shopify merchants they saw the conversion rates increased at least twice.
Affiliate marketing programs evolved dramatically also with the developments in the tech industry. Thus, as the result of the growing popularity of mobile apps, in 2014 mobile affiliate programs exceeded and took over the desktop.
As with all, the growth of the industry revenue inevitably attracted online scammers looking for easy and fast money. Cookie stuffing, black hat SEO tactics, fraudulent traffic cost advertisers millions of dollars, having compromised the reputation of affiliate marketing for quite a while. Affiliate networks were subject to considerable losses and were forced to reconsider the payout policies which resulted in the overall turnover decrease.
After several unfortunate experiences, brands no longer wanted to manage affiliate programs in the blind, inviting every more or less relevant affiliate to join the program. Being very selective in choosing business partners for affiliate programs brands made a huge contribution toward the shift to partnerships marketing and partner programs.
The year 2016 saw a huge rise among influencers, which drastically changed the paradigm of affiliate marketing. It proved that contrary to the established convictions it is not solely built around rewarding the last player who delivers the final click before a conversion. It grew into a long process of partnering, communicating, introducing, and persuading new customers.
Influencers were the first ones to change not only the common remuneration scheme, but also make a step towards building long-lasting partner relationships based on trust and mutual benefit. The nature of influencer marketing activities, where influencers stand behind products or services they trust, superseded affiliates which drive tons of (not always high-quality) traffic. Trust and credibility that influencers gained among their audience bring them closer to channel partners.
Along the way, it became clear that affiliate marketing needed stronger and smarter technology that would enable working on performance-based conditions, collect data about consumer journey, automate affiliate validation processes, set personalized advertising, prevent fraud etc.
And the tech industry responded to that request. Technology made partnerships a measurable marketing channel. It allowed marketers to track performance-based events, measure relevant metrics, and remunerate their partners accordingly. The new technologies helped to control all the performance channels and manage partnerships with affiliates, publishers, influencers, and agencies in one place.
The fraud prevention industry came up with various solutions to detect and block fraud on click and conversion levels. It helped industry players to derive partners who bring real value from those one-day affiliates who are there just for quick money.
The last, but not least breaking point in the evolution of partner marketing was the rise of automation and machine learning technologies. This made it possible to get rid of the majority of manual and routine work of marketers, helping them to focus on real business growth and nurturing mutually beneficial long-lasting relations with the partners.
From then on, the marketing partnerships transformed into a sustainable and profitable growth channel. This long-term view on partnerships translates into a customer-focused, reliable, and forward-thinking business model. Because in this scenario all parts win.
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