In January 2013, a joint report published by the IAB (Internet Advertising Bureau) and PwC (Price Waterhouse Coopers) revealed that the affiliate marketing industry in the UK generated around £9bn worth of sales in 2012. Roughly speaking, this means that 6% of all online sales in the UK were a result of affiliate marketing activity, figures which surely only the most foolhardy brands would ignore yet that’s exactly what luxury brands have tended to do.
Signaling a new attitude however is a raft of premium and luxe brands who’ve realized that, in today’s ultra-competitive online environment, it simply doesn’t make sense to steer clear of a tool, used intelligently and appropriately, can bring a wealth of benefits. Ralph Lauren, Harrods, Fortnum & Mason and Belstaff are just a few of the brands redefining the future of affiliate marketing.
What does using affiliate intelligently, appropriately or even strategically entail though? To find out, The Future of Luxury spoke to Matt Brown, Founder and Director of digital business consultancy Hatmatic who revealed the 5 most important guidelines for luxury brands to follow when incorporating affiliate in their future marketing plans.
1. Protect Brand Identity
I’ve worked with a number of luxury brands and the question of brand protection always comes up early. I recommend starting any affiliate campaign small, working with trusted publishers who understand the sector and are sympathetic to the need to follow brand guidelines strictly and at all times, even if this reduces the sale opportunity to begin with. Initially it’s more important to focus on generating traffic and click through rates after this, it’s a process of test, evaluate, repeat.
It’s important to work with good quality affiliates who can demonstrate experience of representing luxury brands, tailored programs do exist and have been rolled out for people such as Burberry, Liberty, Matches, BOSS, My Wardrobe, Tommy Hilfiger amongst others.
2. Incorporate Affiliates as Part of the Customer Journey
Affiliates are a key driver in the overall customer journey from initial interest to ultimate purchase, which in turn offers brands the opportunity to extend their message across multiple sites leading to increased reach. This is why handpicking the right affiliates can add real value to partnerships and even be considered an extension of your direct sales team.
With online stores open 24/7 and consumers able to purchase products via multiple devices across platforms, it’s the responsibility of all brands and affiliates to cooperate to ensure consistency in the customer journey and experience.
3. Team Up With the Right Tech Partner
There are over 30 affiliate networks and platforms in the UK market which is why it’s vital luxury brands team up with a technology partner who understands their core objectives. Simply pushing a luxury brand program through the usual affiliate suspects will create trouble. Working with a platform-only solution allows brand owners to manage affiliate relationships themselves, allowing more control but also calling for more resources client side.
My advice is to get a strict SLA in place when working with an affiliate network, this will ensure they promote and recruit affiliates around your objectives, as well as adhere to your brand guidelines at all times. You may find the fee structure more weighted to a fixed-fee than a performance-based fee as protecting your brand will come at a cost to revenue, which is what networks traditionally base their fees on.
4. Use Affiliates to Add Value to Brand Objectives
Affiliates have demonstrated time and again that they possess the business credentials, and the entrepreneurial flair, to build robust businesses adding real value to brands’ objectives to drive sales, a trend which is set only to grow. I’ve worked with many new affiliates entering the sector who’ve added significant incremental traffic, awareness and sales volume for our clients. My advice here is to embrace the opportunity, research the space and understand the core affiliate sectors that have the potential to work for the luxury sector. These include content creators and curators, blogs and forums, shopping and style hubs as well as advice and review sites.
5. Consider Affiliate Marketing an Extension of Digital PR
Lastly, affiliates have evolved. Long gone are the days when affiliates were simply static websites looking to sell to their user base on the cheap. Proof of the industry’s evolution came last year with the introduction and universal acceptance of a new name – Perfomance Marketing and it really is just that.
Think of your affiliate base as an extension of your digital PR activity, websites who talk favourably about your brand are remunerated on sale, rather than on exposure. With that in mind, the exposure on the majority of affiliate sites is a ‘free’ extra.
The increased usage of mobile devices to access sites means that affiliates have had to adapt, adjust and improve their consumer offering accordingly – a simple text link re-directing users to a luxury brand home page simply doesn’t cut it anymore. This gives brands the chance to immerse users in their world on a variety of sites, platforms and devices which, when done effectively, can revolutionise a brand’s ROI.