Making it as a start-up is tough on the best of days, but the affiliate industry can provide a genuine opportunity for success in digital.
By its very nature the affiliate industry encourages creativity and boasts an inherent need to organically adapt one’s offering to maximise performance; and without the desired end result, the industry’s service providers do not get paid. And that is the crux of it – the need to innovate is what keeps the industry fresh and vibrant.
As a breeding ground for innovation, there are inevitable opportunities out there for new services and technologies to prove themselves and their value in a sales and marketing context.
Across the industry, these new products are presented to a variety of merchants, but all too often the focus is on the tier one/big brands/household names of this world.
The affiliate ‘publishers’ are keen to get the big brands on their marketing material and the networks often over-service these clients, as they are expected to.
This can be a risky strategy, particularly for the publishers that may end up being too reliant on one or two big clients.
With the right type of product offering, it is possible to build a strong and healthy business in the affiliate industry without approaching those tier one clients. At GDM, we believe many networks and publishers are missing a trick.
Small and medium-sized enterprises (SMEs) are often more receptive to new ideas, more willing to be flexible and often put up less resistance to change in the form of red tape.
The network model is, for the most part, very good at facilitating this type of approach. It centralises the client management and the otherwise time consuming invoicing (sending out individual invoices to all of our 900-plus clients per month would be a significant drag on resources, if not fatal to our business).
Having a large number of smaller clients also spreads the financial risk significantly, which is essential for a small business.
It provides a valuable breadth of experience across a variety of sectors, demographics and geographical regions and a good selection of possible case studies with which to win more business. This variety helps to shape the best direction for the company in terms of the most profitable model and ‘sweet spot’ in terms of the service.
Another benefit of working with smaller clients is the potential for growth. Bigger brands and household names will have much more mature marketing programmes and higher market saturation, which makes significant growth very difficult.
One of the best parts of my job is seeing the positive effect our service has for so many of our SME clients.
The Affiliate Desk at GDM is responsible for trading our affiliate-based campaigns. We use various demand-side technologies to interface with biddable media through market places that resemble stock exchanges. These ‘Ad Exchanges’ allow us to engage in seriously sophisticated stuff.
We find new customers through our pre-targeting campaigns, we re-engage lost traffic through our re-targeting campaigns and revive past customers through our post-targeting campaigns.
We are constantly seeking out the latest technologies to engage in this, and package it for the affiliate industry.
Best of all, we offer all of this on a cost per acquisition (CPA) basis, without commitment or minimum requirement: we’re plug in and play.
Technology like this requires large commitments in terms of spend, operational expertise and a deep understanding of its connectivity to the wider landscape. Unfortunately, these barriers to accessibility make this type of technology largely unavailable to SMEs.
Fortunately, the affiliate industry has enabled us to provide a premium product built on market leading technology to these clients. On the merit of this we have been able to build out an entirely new side of our business based largely
on packaging our technology for SMEs on a performance basis.
Don’t get me wrong – I am not under the illusion that we are an exception to the rule in working with these merchants. Many of the top tier publishers are now brands in their own right (Vouchercodes.co.uk, Quidco, TopCashback
and uSwitch to name but a few) and they work with a huge variety of merchants. It’s just that very few up-and-coming publishers seem to make the SMEs their primary focus – they are often an afterthought for those businesses.
If you recall the cover story of Marketing Week’s 30 January issue (SMEs: flex your marketing muscle, page 10), you will know that the SME market is a great example of strength in numbers.
It is a booming sector, with £14bn worth of sales reported in the PwC Performance Marketing Report last year, which is impossible to ignore. A small percentage growth of the whole SME market is arguably more important than an
equal growth in just the ‘tier one’ bracket.
With the support of a few forward thinking networks, we are lucky enough to be one of the affiliate publishers that has benefitted from the opportunity provided by working with SMEs in affiliate marketing.
We are confident that with good ideas, efficient tech and most importantly an entrepreneurial spirit, many more budding technology companies will find their ‘sweet spot’ through affiliate marketing.