Build an affiliate marketing strategy Nothing new for digitally native brands. Many online retailers, like musical instrument retailer sweetwaterAn internal department was established to manage editors and creators to promote their affiliate links and help generate sales. However, this growth is particularly evident among direct-to-consumer brands, many of which are trying to diversify their digital ad budgets in the wake of iOS14 privacy changes and the looming death of third-party cookies. In turn, some DTC brands — and the PR agencies they work with — are dedicating more resources to affiliate marketing.
Affiliate marketing is any strategy in which a third party (such as a publisher or influencer) shares a link to a branded product and subsequently takes a cut of each sale. Historically, affiliate marketing has had a bad reputation for primarily targeting customers looking for promo codes and coupons who are unlikely to have high lifetime value. That perception has changed over the past decade, however, with the rise of better-known review sites like The New York Times-owned Wirecutter. But today’s affiliate marketing programs tend to include multiple channels. This includes discount and coupon sites, as well as so-called “premium publications” like referral channels The Strategist and Buzzfeed Reviews, and finally, members dealing with content creators and influencers.
Pay more attention to influencers
DTC jewelry brand Dorsey, a brand that has built a solid revenue stream from affiliate marketing, first started focusing on the channel last summer.
Dorsey founder and CEO Meg Strachan told Modern Retail, “From a creative standpoint, people aren’t responding to the kind of overproduced ideas that converted customers five years ago.” Instead, today’s editorial gift guide, reviews and influencers Recommendations resonate more with younger digital shoppers than overly groomed Instagram posts.
“We’ve seen our affiliate advertising partners drive up to 35% of total sales,” she said. “It’s not going to replace paid media spending, but it’s clear that over the next few years, affiliate advertisers will replace a lot of the revenue that used to be driven by Facebook and Instagram ads.”
Today, membership-related sales account for nearly 25% of Dorsey’s annual revenue. “I think affiliate marketing is less of a way to acquire cheap customers and more of a way to target a strong community of potential customers who might like our products,” Strachan said.
In the past, affiliate marketing often referred to agencies promoting products to media editors for inclusion in listings and reviews. Today, building an affiliate marketing program also requires working with a large number of social media creators—both major and micro-influencers. For example, Dorsey’s current affiliate strategy primarily entails long-term partnerships with influencers with strong and niche Instagram or TikTok followings. “We found that affiliate advertisers with more than 500,000 followers didn’t convert customers,” Strachan said. These creators typically feature Dorsey’s flair for products in their content and feature the brand’s lab-grown gems in their unboxing videos and posts. “We’re really leaning towards partnerships with micro-influencers and medium followers.”
Chili crisp brand Fly by Jing is also developing its affiliate marketing program.
Justin Chan, growth director at Fly by Jing, told Modern Retail that the brand started rolling out affiliate links last August, focusing on online publications covering food and lifestyle.
Fly by Jing works with performance marketing agency Dreamday PR to use coupons and loyalty partners such as Honey, Refermate and Capital One. “In terms of top publisher performance, we’re seeing a lot of traffic and sales from Wirecutter, Apartment Therapy and Strategist,” Chan said.
Affiliate links naturally perform especially well when companies release new products or collaborate to get a lot of press coverage, Chen said. A recent example is the Fly by Jing x Fishwife collaboration, which gained 23 articles in affiliated media, including The New York Times and Business Insider. “We saw a 300 percent increase that week, and the collaboration sold out within three days,” Chan said.
Over the past year, Fly By Jing’s affiliate program has grown 121% month-over-month, bringing their affiliate-derived revenue to about $22,000 per month. “We’re also currently exploring more ways to expand our loyalty program, such as initiatives such as credit card partnerships,” Chan said.
Since affiliate marketing often involves promoting news sites that also have an e-commerce arm, like CNN or The New York Times, more PR firms are also building affiliate businesses to better work with retail startups.
Dreamday PR has grown its business by partnering with multiple brands for performance marketing as more and more brands are asking to roll out programs. Dreamday founder Lauren Kleinman attributes the growth to a growing e-commerce business that has become more challenging. Dreamday’s current 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,” says Kleinman. “We’ve helped them generate over $1 million in affiliate revenue and over 300,000 clicks since January,” Likewise, Oui the People’s affiliate program has generated $86,000 in revenue since January, averaging That’s a 37 percent sequential increase, Kleinman said.
“Affiliate links affect some brands more than others,” Kleiman said. Generally, if a brand’s web traffic is already strong, there is more opportunity for awareness and conversions. “It can be challenging for smaller, less well-known start-up brands,” adds Kleinman.
However, Kleinman points out that the channel also has drawbacks, as it is not as simple as paid advertising on platforms like Facebook and Instagram. “You don’t get X sales for X dollars,” she said. Much of its success still hinges on media trends and relationships between agencies, editorials, and now creators. “But we’ve seen our demand rise over the past year as part of a larger trend in PR.”
In turn, other public relations agencies are capitalizing on client demand for affiliate marketing.
Jennifer Bett Communications, which represents brands such as 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 news coverage the agency is trying to secure for its brand.
“Through this division, we advise clients and work with media interested in business-driven 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 players from PR agencies to news sites get into the affiliate marketing game, brands are constantly re-evaluating their strategies in this space. For example, DTC cleaning brand Branch Basics has built its business primarily through affiliate marketing since it launched in 2017.
In the early days, the company worked with lifestyle bloggers who tested and reviewed Branch Basics cleaning products, CEO Tim Murphy said. Today, the company focuses on partnering with health and wellness experts to promote the brand’s line of non-toxic formulas that boast its gentleness on the skin.
That slow-and-steady strategy has paid off, Murphy said, especially as other digital advertising methods become more expensive. Affiliate channels now account for 33% of Branch Basics spending, and ROAS is three times as high, Murphy said.
The company plans to increase its affiliate marketing budget this year, including investing more in small and medium influencers. “This year, we’re allocating more of our budget to affiliate marketing because it’s our best-performing channel,” Murphy said.