How the Affiliate Marketing Playbook Evolved for DTC Brands

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Build Affiliate Marketing Strategies is not new to digital native brands. Many online retailers, like instrument retailer Sweetwaterhave set up internal departments to manage copywriting and creators who promote their affiliate links and help create sales. The growth, however, is particularly reflected among direct-to-consumer brands, many of which are trying to diversify their digital ad budgets in the wake of iOS14’s privacy changes and the impending death of third-party cookies. In turn, some DTC brands — as well as the PR agencies that work with them — are devoting more resources specifically to affiliate marketing.

Affiliate marketing refers to any tactic in which a third party – like a publisher or influencer – shares links to a brand’s products and then gets a share of each sale. Historically, affiliate marketing got a bad rap because it largely targeted customers looking for promo codes and coupons, which weren’t likely to have a high lifetime value. However, this perception has changed over the past decade with the rise of more reputable review websites like Wirecutter, owned by The New York Times. But today’s affiliate marketing programs tend to span multiple channels. This includes discount and coupon websites, as well as what are considered “high-profile publications” such as The Strategist and Buzzfeed Reviews referral points, and finally, affiliate agreements with content creators. and influencers.

Increased attention to influencers

One brand that has been able to generate a strong revenue stream through affiliate marketing is jewelry brand DTC Dorsey, which began focusing on the chain last summer.

Dorsey founder and CEO Meg Strachan told Modern Retail that “creatively, people aren’t reacting to the same kind of overproduced creation that converted customers five years ago.” Instead, today’s editorial gift guides, reviews, and influencer recommendations resonate more with young digital shoppers, as opposed to overly polished Instagram posts.

“We see our affiliate advertising partners drive up to 35% of total sales,” she said. “This does not replace paid media spend, but it is clear that over the next few years affiliate advertisers will replace a substantial amount of revenue historically generated from Facebook and Instagram ads.”

Today, affiliate sales represent nearly 25% of Dorsey’s annual revenue. “I view affiliation less as a way to acquire cheap customers and more as a way to target powerful communities of potential customers who might like our product,” Strachan said.

In the past, affiliate marketing generally referred to agencies offering media publishers products to include in listings and reviews. Building an affiliate marketing program these days also involves working with the vast number of social media creators, including big and micro influencers. For example, Dorsey’s current affiliate strategy is primarily about working long-term with influencers who have robust but niche Instagram or TikTok followings. “We’ve found that affiliate advertisers with more than 500,000 subscribers don’t convert customers,” Strachan said. These creators typically showcase a gifted Dorsey product in their content and showcase the brand’s lab-grown gemstones throughout their unboxing videos and posts. “We really rely on partnerships with micro-influencers and those with medium-sized followings.”

Crispy chili brand Fly by Jing is also expanding its affiliate marketing program.

Fly by Jing’s chief growth officer, Justin Chan, told Modern Retail that the brand began rolling out affiliate links last August, primarily focusing on online posts that cover food and style. of life.

Fly by Jing, which works with performance marketing agency Dreamday PR, uses a mix of coupon and loyalty partners, such as Honey, Refermate and Capital One. “In terms of top publisher performance, we’re seeing strong traffic and sales from Wirecutter, Apartment Therapy, and Strategist,” Chan said.

Naturally, Chan said, affiliate links work especially well when the company is launching a new product or collaboration that gets a lot of media coverage. A recent example is the Fly by Jing x Fishwife collaboration, which garnered 23 affiliate news articles, including The New York Times and Business Insider. “We saw a 300% increase that week and the collaboration sold out in three days,” Chan said.

Over the past year, Fly By Jing’s affiliate program has grown 121% month over month, bringing its monthly affiliate revenue to around $22,000. “We are also currently exploring other ways to expand our affiliate program, with initiatives such as credit card partnerships,” Chan said.

The push for the press

Because affiliate marketing often involves launching news websites that also have an e-commerce arm, like CNN or The New York Times, more and more PR firms are also developing marketing operations. to better work with retail startups.

Dreamday PR, which works with a number of brands on performance marketing, has seen an increase in business as more brands request program rollouts. Dreamday founder Lauren Kleinman attributed the growth to e-commerce businesses that are becoming harder to scale. Current Dreamday affiliate marketing clients include athleisure brand Girlfriend Collective, razor brand Oui the People and the aforementioned Fly by Jing, among others.

“One of our most successful brands is Girlfriend Collective,” Kleinman said. “Since January, we’ve helped them generate over $1 million in affiliate revenue and over 300,000 clicks,” Kleinman said.

“Affiliate links move the needle for some brands more than others,” Kleinman said. Generally, if a brand’s web traffic is already robust, there are more opportunities for awareness and conversion to be had. “It can be difficult for smaller, starter brands that don’t have a lot of brand awareness yet,” Kleinman added.

Still, Kleinman noted that there are downsides to the channel in that it’s not as straightforward as paid advertising on platforms like Facebook and Instagram. “You don’t get X sales for X dollars,” she said. And much of its success still hinges on media trends and relationships between agencies, editorials and now creators. “But we’ve seen our demand increase over the past year, and that’s part of a larger PR trend.”

In turn, other PR agencies are also capitalizing on client demand for affiliate marketing.

Jennifer Bett Communications, which represents brands like Parachute and Grove Collaborative, launched an affiliate division in April to meet customer demand. Founder Jennifer Bett Meyer said the service is an extension of the media coverage the agency is trying to get for its brands.

“Through this division, we advise our clients and implement collaboration with media interested in trade-focused stories,” Meyer said. “Because affiliate marketing is a pay-for-performance model, it allows us to strategically partner with specific outlets to leverage and grow affiliate revenue.”

As more and more players, from PR agencies to news websites, enter the affiliate marketing game, brands are constantly re-evaluating their strategies in this space. Cleaning brand DTC Branch Basics, for example, has grown its business primarily through affiliate marketing since its launch in 2017.

In its early days, the company worked with lifestyle bloggers who tested and reviewed Branch Basics cleaning products, CEO Tim Murphy said. Today, the company is focused on working with health and wellness experts to promote the brand’s range of non-toxic formulas, touting their gentleness on skin.

The slow and steady tactic paid off, Murphy said, especially as other methods of digital advertising have become more expensive. Affiliate channels now account for 33% of Branch Basics spend and have a 3X ROAS, Murphy said.

The company plans to increase its affiliate marketing budget this year, including greater investment in micro and medium-sized influencers. “This year, we’re allocating more budget to affiliate marketing because it’s our highest performing channel,” Murphy said.

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