Debunking Myths: Why Publishers Need to Rethink Their Affiliate Monetization Strategies

July 19, 2024

4 min read

Saurabh Mishra

Annually affiliate publishers from the world over assemble to be a part of one of the most awaited affiliate events, which goes by the name of Affiliate Huddle. The event is organized by James Little (TopCashback UK) and team and this blog explores insights from one of the many panel discussions organized at Affiliate Huddle in April 2024.

On an almost-sunny day at Brighton, Team NucleusLinks assembled some of the sharpest affiliate experts in a pre-battle huddle.

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It’s increasingly clear that the old playbook affiliate publishers are operating on is no longer sufficient. As team sizes shrink and advertiser budgets shift, publishers must reassess their affiliate-led monetization strategies. The landscape has significantly evolved, and holding onto outdated beliefs is like trying to win a drag race with a horse and buggy. The panel aims to debunk some fairy tales, such as:

The best monetization for each merchant is only possible through its primary affiliate network
Holding on to manual decisions in managing affiliate links and merchant x network combinations
Lacking competition between networks for highest EPCs

The esteemed panel delved in-depth into the affiliate space and the recurrent issues braved by affiliate gladiators the world over. Each panelist was asked a set of 5 questions: -

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Below are the key takeaways from the panel discussion:

Industry Changes and Pain Points

Evolving Challenges: Over the past year, the affiliate marketing industry has faced changes that have shifted the pain points for publishers. These include the impact of the pandemic, cost of living crises, and evolving technology and privacy regulations.

Monetization Strategies

Hybrid Models: Publishers are increasingly adopting hybrid monetization models combining CPA (Cost Per Acquisition), tenancy packages, CPC (Cost Per Click), and licensing models. This flexibility helps adapt to market changes and maximize revenue.
Subscription Models: Some publishers, like Heather from Reward Gateway, have introduced annual subscription models to attract smaller brands and educate them about the affiliate space, which has proven beneficial for long-term relationships and revenue growth.

Dependency on Google

Varied Dependence: Dependence on Google for traffic varies significantly among publishers. While some, like Trusted Reviews, rely heavily on Google (8 out of 10), others like Reward Gateway report zero dependence, indicating diverse traffic acquisition strategies.

Transparency and Measurement

Need for Transparency: Publishers face challenges with the lack of transparency from advertisers and networks, especially concerning the reasons for declined sales or returns. There's a call for more open communication and detailed reporting to help publishers understand and validate these actions.
Impact of Privacy Regulations: Privacy regulations and consent management platforms (CMPs) pose challenges in tracking affiliate sales, especially when users decline cookies. Publishers are encouraged to have conversations with their merchants to understand and mitigate these impacts.

Focus on Mid to Long Tail Merchants

Value in Diversity: Despite the natural focus on top-performing merchants, there's potential value in mid to long-tail merchants. Seasonal trends and niche markets can uncover "hidden gems" that may become significant revenue sources with the right attention and strategy.
Relationship Building: Affiliate marketing is heavily reliant on building strong relationships with advertisers. Personalizing approaches and understanding mutual objectives can unlock significant value, especially with smaller or niche merchants.

Beyond the known

It's a common misconception that affiliate revenue can only come from CPA/CPS. Publishers are successfully exploring and implementing various models like CPL (Cost Per Lead), CPC, hybrid models, and subscription-based models.
Technology vs. Relationships: While technology is crucial, the misconception that it alone can drive success in affiliate marketing is debunked. Relationship-building and a deep understanding of both advertiser and publisher needs are key to thriving in this space.

Key Takeaways

Adaptability and Innovation: Publishers need to be adaptable and innovative in their monetization strategies, leveraging hybrid models and exploring new revenue streams.
Importance of Transparency and Data: Increased transparency and better data sharing from networks and advertisers can significantly improve publisher performance and trust.
Resource Allocation: While focusing on top-performing merchants is important, dedicating time and resources on mid and long-tail merchants can uncover new opportunities and diversify revenue streams.

These insights highlight the dynamic nature of the affiliate marketing industry and the importance of flexibility, transparency, and strong relationships in navigating its challenges.

Author

Saurabh Mishra

Saurabh looks into partnerships at NucleusLinks by day and talks to Godard and DeSica by night. Rumor has it, if you throw a stone at him at any point of the day, you'll hit him in the middle of a keyboard battle, crafting his next piece of writing.