Affiliate Marketing needs to be more automated

I presented recently at Affiliate Huddle on a subject that's gnawed away at the back of my mind for a few years now...the need for greater automation in affiliate marketing.

It’s been a constant source of frustration for me that other digital marketing channels have used a lack of automation and sophistication to beat my beloved Affiliate. It’s made even worse because I know those other channels are right.

I challenged the room at Huddle with this question: how many times have you as Affiliate marketers here today heard or used the phrase: “we are a relationships industry”. The response was unequivocal. A lot! It had to be 80% plus of attendees.

On face value there’s nothing wrong with this. As an Affiliate marketer myself I’ve forged long-standing working relationships with so many great people in the industry. But we Affiliate marketers cling to this “relationships industry” tagline like it’s our mantra for doing business. And over the years it has become Affiliate’s defence mechanism against criticisms that the channel hasn’t used technology to deliver greater efficiency and effectiveness.

No channel should be damned by what the others do. But the Affiliate channel could attract higher spend, deliver greater efficiency and become more effective by investing in automation. Only those with sepia-tinted memories of Affiliate’s bygone era would disagree.

This isn’t a new debate. I started hearing demands for Affiliate to ‘be more automated’ years ago. Back then, I never had a clear view of what this meant, and I often derided the claims as miss-informed people wanting the channel to be more like Display because ‘programmatic’ had gained Bradley Cooper-esque sex appeal.

A few years on, and I can see automation opening up numerous options for the Affiliate channel. AI might be a sweeping buzzword, but in the form of chatbots to answer basic queries for entry level merchants/publishers and predictive forecasting I can see it having practical uses. The cumbersome way merchants and publishers find each other, by searching directories and appearing in tired ‘Partner of the Month’ campaigns could be automated with algorithms to match the two sides of the Affiliate marketplace. Approving publishers – one of the most manual and tedious processes in Affiliate marketing – should not need to be touched by a human, with approvals happening automatically based on predefined criteria.

But there are two more fundamental areas of Affiliate where automation can no longer be seen as a nice to have, but an absolutely vital change for the channel’s long-term viability. It was these topics that I focused on at Affiliate Huddle: campaign management and more intelligent advertising. Let’s look at these in more detail.

Campaign management is a bit of a catch-all term. What I mean by this is the nuts and bolts of how we do affiliate marketing, an incredibly manual, time consuming process that is very ‘relationships’ focused. I presented this slide below to show the difference between the way Display on the left uses automation to negotiate price, set rates and deliver advertising with almost no human intervention, while on the right Affiliate requires a myriad of inter-personal steps to achieve the same thing which all rely on people.

Now, there is nothing wrong with lots of people interaction. But it’s hugely inefficient. If a merchant or publisher wants to change commission terms or additional exposure the two parties make contact to negotiate directly. Then there is usually a network involved, potentially mediating and definitely re-configuring the commission terms manually. And then let’s not forget the post-campaign analysis to understand whether the advertising has driven profitable sales or backed out to an acceptable CPA.

If anybody thinks that this isn’t an important issue consider the amount of wasted people hours that could be saved. Lets estimate that each Affiliate campaign management flow like the one above takes 30 minutes of people hours to set-up. If each merchant in the industry did 3 campaign changes/launches each week that's one and a half hours per Affiliate programme. Assuming there are approximately 4,000 live programmes in the UK. That's 6,000 people hours a week to perform campaign management that could easily be automated.

How would that automation look? Consider an Affiliate channel where there is a marketplace for publishers to input their campaigns. That marketplace then allows merchants to bid to be involved in those campaigns, publishers control the negotiation process and the appropriate commission rates are updated automatically with no human effort. And why not take this a step further and think about a world in which commission rates are not fixed arbitrary values or percentages, but dynamically updated rates that are linked directly to the profitability of the activity and change automatically based on campaign performance. Too Total Recall? No, because this kind of marketing automation happens every day in channels like Search and Display.

The second important and infinitely achievable area that Affiliate needs to automate is in ad delivery.