Social Media: Affiliate Marketing

Making friends and affiliations

Social media is a minefield for unsuspecting brands, but affiliate agencies are especially well placed to take advantage, says Nathalie Kilby

Affiliate marketing is growing in popularity. It is worth over £2bn in revenue (and rising) and more brands are using the channel as part of their online marketing mix. Recent research from E-consultancy and affiliate network BuyAt shows that 85% of agencies say they now manage more affiliate marketing for clients than they did two years ago.

Rob Kelly, publisher manager at TradeDoubler, which has over 1,500 advertisers and 118,000 active publishers says there is much to be gained from incorporating social media into the affiliate channel: “Social networking offers a great opportunity for affiliate marketing organisations. The peer groups present within social networks represents a channel to areas of genuine shared interest. Through identification of these interests, such as travel, fashion, entertainment and so on, advertisers could potentially reach a new, disparate but still a large group of selfselecting audience members. The methods cur-rently remain crude but will undoubtedly improve given the large amount of potential revenue that could be earned.

“We are also seeing with the launch of ventures such as Osoyou.com, commercially focused sites that will depend on a high level of user interactivity based on large scale social networking activity. Here the site and the social network are built around specific interest areas – in Osoyou’s case, women’s fashion. I am confident that we will see more ventures such as these launched in the near future. Of course many will fall by the wayside, but others will provide important new shop windows for advertisers.”

Join the social club
Donald Hamilton managing director at Wunderloop, says the affiliate sector would be foolish to ignore the growth of interest in social media. “Some observers are concerned that getting involved in social media is intrusive, invading private spaces. But advertising has always invaded; television advertising intruded into
the private living space but became perfectly acceptable. But, of course, you have to understand the audience. It is interesting that some brands are cautious, yet that’s where their consumers are. Merchants and affiliates must follow those eyeballs if they are to increase traffic and in turn revenue.”

So far, however, it has just been the affiliates not merchants that have embraced social media, according to Fiona MacPherson at affiliate and media manager Equator. “Many affiliates are already using it and have been doing so for some time, whether it’s social networks, forums or blogs. Affiliates have always been very good at picking a niche or latching on to something they are passionate about, and they can use blogs or networks in the same way they have built relevant content into their sites. 

Credible connections
“Affiliates need to engage and make a genuine connection in order to build trust and credibility. Blogs can be very personal, while forums and social networks extend the community. They can have a dialogue with and get feedback from their users in this environment.” She says certain sectors can make obvious and relevant uses of social media, for instance the travel sector could make good use of photo and video-sharing sites, and she points to website holidaywatchdog.co.uk as an example of how an affiliate can use social media platforms effectively.

Anna Gracie, head of international digital at Media Contacts, part of the Media Planning Group, says forward-thinking affiliates have been quick to jump on board, and cites another example of successfully deploying Web 2.0 techniques in the affiliate space: “One strong example of how an affiliate has used Web 2.0 is the “I Saved Cashback” (isavedcashback.com) application on Facebook – once you’ve added the application to your profile, you can make purchases from a number of branded retailers and keep a track of how much money has been rewarded back to you via your Facebook profile. Other affiliates have built profile pages around brands in order to gain awareness and popularity.

“Having updates, discounts and promotions makes for appealing viral threads which can be used on affiliate blogs; affiliates often write on their blogs about their experiences with merchants, noting if the campaign converts well along with general updates. A merchant is far more likely to feature on an affiliate blog if they have an offer or discount, hence pushing affiliate exclusive vouchers and promotions is going to increase their chances of exposure through social media.

Affiliate Window communications director David Hall says the use of social media will be a driving force behind further growth in the affiliate marketing channel, but he says it “will not be a revolution over night”, adding that merchants, affiliates and social media networks are still working out the best strategy. “There is money to be made by serving the right ads to the right social profile on social networking sites,” he says.

Play by their rules
Hall gives the example of how a dance music enthusiast with 100,000 visitors a month to his MySpace profile would be able to strike a costper- acquisition deal with, say Play.com, to sell dance CDs via his page. “It’s the perfect content for the perfect niche. This affiliate may be tiny, but put together all the different small affiliates and the numbers are potentially huge. This is all about the long tail,” he says. And developments are moving fast. Just last week affiliate network BuyAt announced a deal that means members of the WAYN UK site can develop customisable “Web shops” as part of their advanced profile. Members use a wizard to create wish lists of the products they would like to own or recommend to others and these are then displayed in their profile. When contacts or random browsers buy from their Web shop the member will receive commission from WAYN.

Buy At chief executive Kevin Cornil said of the WAYN launch: “Social networks have been extremely successful at increasing their member base but sites like WAYN are reluctant to overly commercialise the experience and drive users away. This deal empowers WAYN members to profit from their profiles with contextually relevant advertising, which also creates a deeper engagement with members and assists with retention, as well as attracting more people to join WAYN.

Commission capabilities
“We are putting affiliate marketing where the traffic is, which will increase sales for the merchants we work with as well as increasing the lifetime value of WAYN’s members. Advertisers pay Buy.At a commission on each sale generated and we will pass this back to WAYN to allocate to its members.”

Hall also sees networks as a great revenue stream and he too cites I Saved Cashback as an innovative way to use the Facebook platform. It is an application created by developer Toby Beresford, which uses Affiliate Window to reach his audience. The application allows Facebook users to save money on their online shopping by finding the best prices without leaving the Facebook user interface. It is APIs (application programming interfaces) such Beresford’s which are driving use within the networks. Google’s OpenSocial, which aims to allow developers to create widgets that can cross networks, will serve to increase these applications’ potential
even further.

But Harvest Digital planning director Mike Teasdale sounds a note of caution. He says there is a lot of hype around social networking sites: “A lot of the buzz is around widgets and applications. But as time goes on, we will quickly hit saturation point in terms of screen real estate – there’s only so much space on a webpage to place widgets. So every successful, buzzy widget on Facebook will displace someone else’s widget.

“The more practical opportunities are around media buying – social networks offer fantastic targeting opportunities. Almost every network can target by age and location. Facebook also offers the chance to data mine into users’ likes and dislikes. Unfortunately, people are happy to say that they like Bon Jovi, less likely to say that they like car insurance, so building effective propensity models from this data may be a challenge.

Feed the people
“One benefit of apps and widgets is that they create entries into a user’s news feed. Facebook’s new ‘social actions’ advertising will place ads into that feed – which may create a bit of a backlash from users.”

Jon Bains, chairman of digital agency Lateral, agrees there are pitfalls: “One of the key parts to engagement is understanding the social contract you are making with your consumer. Much of the 2.0 world is one of service – I feed you / you talk to me / we are happy together. If you over-commit early on and don’t manage consumer expectations, they will revolt further down the line. It’s exactly the same principles as the good old days of digital when everyone wanted to start a community (as opposed to the current vogue of joining communities) and then turned them off the second they were bored.

The old adage ‘Communities aren’t just for Christmas’ is still very true today.” For many brands, affiliate marketing has proved a challenging, but highly successful channel. The best affiliations are built on good relationships – key to success in the social media arena. There can be little doubt that the affiliate channel is well placed to mine this rich seam.