Affiliate marketing may be decades old, but it is still a challenge—even for the savviest e-commerce leaders.

Marketers struggle to decipher affiliate performance. Maximizing campaigns to boost an organization's bottom line can seem like a pipe dream to a marketer.

Moreover, identifying and securing high-performing affiliate relationships often prove to be labor-intensive. Analyzing campaign effectiveness is an even more daunting beast.

Until recently, brands have had only one option for affiliate marketing: partner with a network and hand over big cash for the privilege.

Big Data is changing the game, however.

Businesses hungry for real-time, multidimensional insights now have access to the information they need to empower smarter decisions. Big Data analytics help affiliate marketers intelligently credit every conversion, understand the consumer journey, and identify the partners that play a role in every purchase. Big Data puts performance front and center, and enables marketers to reassess their programs for added growth and profitability.

After reading this article, you will have a clear picture of the problematic legacy-network approach with its lack of control, siloed network data, and inadequate analysis capabilities.

You’ll also see that there's no need to panic. Big Data provides a welcome disruption to the old-school model, and good program-management solutions deliver the tracking and reporting information needed to reveal what’s working and what needs to be optimized.

Yesterday's Legacy Affiliate Approach

Think back to the 1990s... Retailers and budding e-commerce providers turned to affiliate marketing for access to big-reputation, high-performing partners that could help them navigate a new digital channel. Affiliate marketing seemed like a natural—even smart—marketing investment.

The big promise of affiliate marketing came with a big cost.

No matter how much money marketers fed the affiliate machine, advertisers constantly hit the wall regarding accessible, transparent, and comprehensive data to track the effectiveness of a campaign or partnership.

Legacy networks owned the data and enacted rigid controls, so customers could only see a narrow and subjective view of their own conversion and performance information. Customers were locked out of asking the smart questions and into inaccurate cost-per-action (CPA) contracts. Marketers were in the dark—and paid for it.

When you fast forward to today, the amount of data points has expanded, but affiliate networks have failed to evolve along with the data. Though the network strategy can sometimes provide enough ROI and reach to justify the spend, the model still keeps the marketer on the outside. The network owns the data and the partner relationships, providing little transparency. The lack of control and clarity leaves marketers with data that is either inaccessible or so ambiguous that it is virtually useless.

Do you think there must be a better way to do affiliate marketing? There is: Big Data analytics.

A Shift to Performance

To reap the greatest value from marketing data, organizations must be able to track the specific source of each lead, inbound call, download, and sale across every channel, platform, medium, and point of contact. That is admittedly no small feat, but well worth the work to deliver real results.

Big Data can help reveal the answers to key questions on hot topics such as mobile-device sales, coupon code usage, media partner value, and the affect of social media on conversions.

Having the data is not enough. You also need innovative tools that can take Big Data and hone in on the information marketers want. That's where Web-based Big Data analytics come into play. Advanced SaaS technology, for example, allows advertisers to leverage Big Data to accurately report, forecast, and reward partners.

An integrated Big Data platform opens the door to previously untapped opportunities associated with buyer behavior patterns, campaign performance, and the true value of any given partner in several ways, including:

  • Tracking relevant data about a specific partner's impact on a sale
  • Customizing how data is tracked, consolidated, and reported
  • Quickly alerting organizations to critical changes in performance factors
  • Providing deep visibility into affiliates producing the greatest value
  • Implementing incentive plans that align with corporate marketing objectives

Those platforms put the advertiser in the driver seat. You can use the information to change how you negotiate contracts—moving from crediting partners that did not provide real value to a system that rewards and motivates top performers. When compensation is more closely aligned to actual performance, marketers can make informed decisions that directly affect return-on-ad spend.

Only by adopting a Big Data performance marketing approach can an organization make sense of fractured intelligence to elicit real-time, multidimensional insight that helps form intelligent, profit-driving decisions.

Toss aside your old-school notions of how to assess and optimize your marketing efforts and relationships. Apply Big Data analytics, and make the most of your channel investment while increasing your operating margins.

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Big Data Is Shaking Up Old-School Affiliate Marketing

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image of Per Pettersen

Per Pettersen is co-founder and CEO of Impact Radius, a provider of marketing attribution and analytics platform for digital brands.

LinkedIn: Per Pettersen 

Twitter: @perpettersen