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April 16, 2020

As Mega-Retailers Scale Back Affiliate, Smaller Brands MUST Seize the Opportunity

Craig McGlynn

For those of you in the performance marketing industry (brands, publishers, agencies, interested parties), you have likely seen large programs like Amazon, Walmart and others pause, retract programs or zero out commissions entirely in the channel. Having been on every side of the industry, these moves don’t surprise me. 

Retailer programs the size of Amazon and Walmart are very opportunistic, and at a time like this, where necessity products go in the cart immediately, and elective products are put on the wish list indefinitely, consumer demand is 100% need-driven, and not necessarily inspired by meaningful content. So it makes sense that those companies where consumer product journeys begin will exploit this situation to their benefit.

If you are a retailer who is not named Amazon, Walmart or you don’t appear on a Fortune 500 list, this has to be a moment of reckoning, where you heed the advice of a recent McKinsey report which stated as a primary takeaway that as a retailer, you must, “Put digital at the center of your operating model.”

So what does opportunity within the affiliate channel look like these days? I have seen from the inside that downward commission movement by Amazon, Walmart and other major retailers is immediately followed by an uptick in SMB, startup and niche merchant discovery by the consumer, and for the retailer there is new customer acquisition and taking of market share. 

Take advantage of growth-hacking methods and manage that growth with these tips:

Experiment with paid placements

  • Established publishers with a huge gate fee like Buzzfeed, Wirecutter, and other influential pubs have lost significant revenue from the commission moves of major online retailers since the Coronavirus arrived, and this is the opportunity of a lifetime for smaller brands to finally have a seat at the table with great exposure. Think about last minute placements and pre-booking future placements, and your negotiating skills will pay off. 

Experiment with adjusting commissions across the click funnel, dynamic pricing and enhancing ranking on comparison shopping and product review sites

  • This can involve anything from providing free products for review to publishers, talking to publishers about how to rank higher in their reviews and recommendations, allowing better cash back on loyalty sites, and pay-to-play scenarios on highly productive publishers.

Monitor low quality actions

  • The big programs pausing will create a “Wild West” mentality for some publishers who are taking a hit, meaning there will be publishers that will most definitely loosen up on being good citizens. Be on the lookout for brand bidding, click hijacks, bot farms, and other low quality actions. If you are on an affiliate platform, talk to them about compliance and fraud tools, and by all means, have someone in your organization monitor every transaction to make sure your T’s and C’s are being followed.

This is an unprecedented time and with an indefinite recovery timeline, but there are opportunities for brands to seize now in order to survive and thrive during this time and in a post-Covid world. Want to chat more? Please get in touch.