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Few areas of digital marketing have exploded in recent years as much as affiliate marketing. What\u2019s more, it\u2019s actually proving effective: eMarketer in September said that affiliate marketing would drive more than $210 billion in U.S. e-commerce sales that year. By 2028, that figure is expected to hit over $287 billion.<\/p>\n
But with that growth comes a myriad of questions about implementation and how brands can actually get results.<\/p>\n
This week on the Modern Retail Podcast, co-hosts Gabriela Barkho and Melissa Daniels answer listener questions about affiliate best practices and how they\u2019re changing amid shifts in shopper behavior and media consumption.<\/p>\n
Here\u2019s a breakdown of the conversation. <\/p>\n
How to ensure authenticity in partners <\/p>\n
One of the primary goals that teams embarking on affiliate say is important is ensuring there\u2019s a natural connection between the product and the creator or publisher who is speaking about it.<\/p>\n
\u201cOne thing we hear a lot about is that Gen Z, and really just generally young people, are basically immune to marketing or advertising. They can sniff out an inauthentic campaign pretty easily. To me, that really starts with seeking people who are already a fan of the brand,\u201d Barkho said. <\/p>\n
How AI is reshaping affiliate marketing <\/p>\n
Our team received multiple questions about how AI is reshaping affiliate marketing, from how it\u2019s impacting discovery journeys to how brands show up in LLMs compared to traditional search engines. While it\u2019s still quite nascent, there\u2019s reason to believe that affiliate marketing could help brands show in AI search results based on where they\u2019re getting mentions and recommendations.<\/p>\n
\u201cIt\u2019s pulling from organic voices on Reddit, on Instagram, across social and on forums, because the agents deem those to be the most authentic,\u201d Barkho said. \u201cWhen brands are talking about themselves, that\u2019s at the bottom of the priority list.\u201d<\/p>\n
But the rise of AI-generated recommendations is changing the way brands present their products online, and that means publishers or affiliates are getting locked out of the equation.<\/p>\n
\u201cBecause AI has collapsed the middle of the customer journey, that experimentation, discovery and look-around phase is now all happening in one prompt and one answer, instead of someone going to multiple sites,\u201d Daniels said. \u201cThat is shrinking the opportunity that brands have to make affiliate matter in other places.\u201d<\/p>\n
Some marketers are wondering how to pitch Substackers or other creators on new platforms instead of traditional publishers. Daniels spoke with Delaney Del Mundo, an svp at marketing agency Pltfrm, who said that Substack could be a burgeoning place for the affiliate model, given that it has around 35 million users, and it tends to have higher open rates than traditional marketing emails.<\/p>\n
\u201cThat\u2019s more eyeballs than you might get through traditional marketing, and there\u2019s an inherent trust in the person who\u2019s making the recommendation,\u201d Daniels said.<\/p>\n
Barkho spoke about how the footwear brand Memphisto worked with the popular Substacker Jake Woolf and gave a promo code for a specific color of the shoe. \u201cThey ended up selling out of that product because so many people clicked through. It was the right creator reaching the right audience.\u201d <\/p>\n
Balancing workload across channels <\/p>\n
Like any marketing channel, companies looking to develop affiliate have to be careful about where to balance their resources. Our team received a question about whether a single team can handle managing affiliate across channels like creator, publisher and deals. While it depends on the resources involved, Daniels and Barkho said they\u2019ve heard more success stories from brands based on how well they\u2019re able to narrow their focus to one particular area.<\/p>\n
\u201cIf you can afford to retain two different agencies or have two people in-house to run these programs separately, that\u2019s probably ideal,\u201d Barkho said. \u201cBut a lot of brands treat them in the same bucket. One person might be sourcing creators, seeding product and also pitching editors. It really depends on the budget and how big your program is.\u201d<\/p>\n