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Why affiliates aren’t always your best bet for promoting your brand at scale

by John Wheeler
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    As Seth Godin once put it, A brand is the set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another.” But with the rapid rise of online coupon and discount affiliate marketing programs to drive ecommerce, the conversation around “what it means” to be a brand is shifting - and not necessarily for the better.

    Here’s how affiliate marketing ought to work: Brands and retailers often rely on coupons to meet their quarterly sales goals. Consumers need coupons to meet their monthly budgets. By running promotional deals on well-known affiliate coupon sites, brands increase their chances of being discovered by new audiences - and increase their sales figures if these new audiences decide to take the promotional offer the brand is selling. In return, the affiliate site takes a small “cut” of the sale for having successfully promoted the brand.

    In some cases, that is how it works. It creates a win-win-win virtuous cycle for a brand, affiliate and consumer alike. Unfortunately, that isn’t the golden rule, for a number of reasons.

    For starters, affiliate sites can damage your brand, especially when you’re looking to solidify long-term relationships with your most influential consumers. They give you little control over the other brands you’re associated with online. If you’re a heritage brand that is trying to “age itself down” and become more relevant to Gen Z, being merchandised alongside other baby boomer-esque brands isn’t going to help your case. Furthermore, if your brand objective is to reach more Gen Zers, a standalone coupon code next to your brand’s name isn’t really going to do much to tell your story.

    Second, you’re promoting your brand to a sea of deal-hunters, who aren’t necessarily looking to be true brand advocates or loyalists: They’re looking for discounts. And last but not least, you’re training new consumers to only buy when your brand is on sale or promotion. You have no control over the types of consumers you’re going after or who you are bringing into your fold.

    Don't dismiss affiliate marketing entirely

    Make no mistake: This isn’t an argument against couponing. Affiliate coupons and discounts have long been a part of corporate marketing strategies since the 19th century (for as long as Coca-Cola’s been sold). At scale, affiliate marketing can be a good thing. The internet’s an endless, exhausting place for a brand to promote itself across. Most brands don’t have the bandwidth - let alone the budget - to do it all by themselves.

    Moreover, couponing is the driving force behind ecommerce. A recent survey found that fully 68 percent of U.S. and Canadian shoppers “wouldn’t shop online without coupon codes.” That’s an astonishing figure, considering that North American B2C ecommerce sales stacked up to something like $660.4 billion in 2017. Imagine 68 percent of North American ecommerce purchases - roughly $450 billion - never having been made for lack of discount pricing. That’s more than abandoned shopping-carts. That’s the entire annual GDP of Thailand. Those sales figures couldn’t be met without the help of affiliate marketers.

    And with Generation Z coming of age, these trends are only going to accelerate. According to a study by the National Retail Federation, 65 percent of Gen Zers “want to get a lot for their money with discounts, coupons and a rewards program.” Gen Z - already famous for its meticulous cyber-thrift - is all about the couponing. By 2019, 31 billion digital coupons will be redeemed per year in global ecommerce transactions, according to Statista.

    How to take advantage of the “economic superpower” of online couponing without risking your brand’s reputation?

    Replacing affiliate marketing with affinity marketing

    The answer might be simpler than you’re thinking. Instead of doing business with affiliate networks that play fast and loose with promotional discounts, why not strike up new relationships with “closed” affinity marketing networks?

    Affinity networks are here to co-partner with you by supporting and amplifying your brand message, place you with like-minded brands catering to the same market as well as showcase your brand story, imagery and content. And they have the same scalability and technology options that open affiliate networks offer.

    Their promo codes are single-use and can’t be “poached,” repurposed and spammed across the universe by affiliate marketing platforms. In short, they offer a whole new experience not offered elsewhere with typical affiliates.

    A final advantage of affinity networks is their reliability and functionality. Gen Zers are enthusiastic about saving money, but many are frustrated with the process of finding coupons on the internet. It’s hard to blame them. Who wants to spend hours of their day searching for coupons and promos online, only to find that they’ve expired or aren’t valid in their own circumstances?

    Affiliate coupon sites bring considerable advantages to ecommerce merchants. Companies that ignore the “growth-hacking” superpower of coupons risk becoming “nonprofits” overnight. And CEOs who try weeding coupons from their company’s marketing mixes risk losing their jobs for their troubles.

    That said, there comes a moment when it stops making sense to do business with an affiliate partner that’s putting its bottom-line sales over your brand’s reputation. Marketers: There’s a better way.

      Download the report: Gen Z spending habits before and during COVID-19

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