As we end another year, it is an important time to revisit budgets for 2024 and beyond. Whether the plan is to allocate spend according to the financial year or you've decided to set goals based on the calendar year it is wise to check in on budgets across all marketing channels to ensure the business is set up for success.
Unlike other channels, affiliate marketing programs are not regulated by strict set budgets. Being performance-based, the more brands spend, the more sales revenue they receive. So, limiting that spend also limits advertiser’s potential sales revenue. Here are some tips and tools to help brands and agencies manage their program to maximise ROI.
Dive into the data: reflect on reporting and historic performance.
A great place to start is by reflecting on 2023 performance, analysing any KPIs and targets that were in place over the year. Commission Factory offers a comprehensive series of reports that track and measure program performance across several relevant metrics, such as transaction data, affiliate performance and sales revenue. Each report is designed to help advertisers dive deeper into their marketing activity within the channel and make informed decisions about how these metrics can be improved, scaled and optimised. Drilling down into custom time frames using the date picker tool allows brands to compare performance across different key periods. Marketers can also download any relevant data to present it to key stakeholders who may not use Commission Factory in their day-to-day activities.
Using data-driven decisions to shape the budget for the upcoming year is key to setting clear goals and objectives for the channel. Advertisers can automate and elevate their reporting and analysis using Custom Reports, a feature that gives brands the autonomy to track and measure custom data points passed through our robust tracking. This powerful reporting tool can help marketers gain deeper insights into their affiliate program by reporting on unique metrics that are passed through Commission Factory, as well as create and schedule regular automated reports to their teams’ inboxes. For example, a weekly or monthly spend report sent directly to selected emails will help automate a pulse check for next year.
Finally, for those looking to optimise their program in 2024, we are proud to offer Cross-Channel Attribution, a new feature that allows advertisers on our Elevate plan to gain better insights into the consumer journey and understand the value of each marketing channel or touchpoint, in the conversion process. Brands can access insights such as:
- How certain partners directly affect revenue when involved in the journey path
- Which partners drive the most solo conversions
- Which channels perform better when they appear together in a successful purchase
- Which partners increase average order value (AOV) and/or basket size
The above are just some examples of what can be derived from this enhanced reporting suite. To learn more about upgrading to Cross-Channel Attribution get in touch with our experts here.
Leverage a Commission Structure: review default and custom commissions.
The best way to maintain a healthy affiliate partnerships channel is to ensure that default rates for the program are scalable and allow room for movement in performance due to growth and seasonality. A default rate offered to partners should align with the budget, goals and be competitive. However, it may be essential to leave room for short-term commission increases so brands can harness relevant placement opportunities and drive more revenue with their affiliates.
For optimisations and ongoing opportunities, we highly recommend Custom Commissions. This powerful feature rewards affiliates automatically at the point of conversion based on rules the advertiser has set up. Advertisers on Commission Factory can commission and report on limitless custom variables on a product level, including (but not limited to):
- Individual SKU (useful for commissioning on or excluding items such as gift cards)
- Product category and sub-category
- Individual item sale value
- Overall sale value of the order
- Any other custom variable required, for example "Full price” or “Sale Price” options
Brands can also choose to commission based on affiliate or transaction parameters, including (but not limited to):
- Partner type
- Number of transactions
- Traffic source
- Tiered sales targets
- New vs return customers
For 2024, brands may want to focus their commission targets on selected SKUs to protect margin and maximise ROI. By having a bespoke commission for specific items or affiliates, brands can further align commission rules to next year’s KPI’s.
Plan for the right opportunity: be ready for the perfect placement with a tenancy fee budget.
Commissions will make up the majority of the affiliate channel spend. However, we always recommend setting aside a tenancy budget at the start of a new year to allow for the right flat fee, increased commission rate or hybrid opportunities. It may be through direct negotiation, an opportunity in Commission Factory’s placement marketplace, or presented to users by their account manager or agency.
Being aware of spend over previous years on placement fees and using that to plan for 2024 will be key. Snapping these opportunities up with affiliate partners can be the difference between brands or their competitors obtaining that lucrative homepage placement. If brands or agencies have not considered a flat fee budget before, it may be time to approach the relevant stakeholders in the business to understand what the options are and prepare for when that perfect placement comes knocking.
As we approach 2024, refining the affiliate marketing budget is crucial for success in this performance-driven channel. Analysing 2023 data and leveraging tools such as Custom Reports and Cross-Channel Attribution could be the make or break for a brand’s marketing strategy in the coming year. Balancing default commission rates, utilising Custom Commissions, and setting a dedicated tenancy fee budget ensures flexibility and strategic alignment with any 2024 goals prioritising ROI. In essence, a meticulous and data-driven approach to budget planning sets the stage for continued success in the affiliate channel and across all marketing channels next year.