Affiliate marketing programs are often stuck in the past, with companies sending out an endless number of coupons. Adidas Group wanted to get past that and realized the quality of its program was only as good as the publishers it paid.
Brands that want to improve their affiliate marketing programming will need to focus on quality, not quality, according to an adidas Group marketing executive.
Nicholas Lamothe, senior manager of CRM with Reebok, spoke at the 2016 Internet Retailer Conference and Exhibition in Chicago about how adidas Group (parent company of Reebok) took its affiliate marketing program to the next level.
Lamothe, who was senior manager of Adidas Group’s retention marketing from 2014-16, says “At the heart of it, the quality of your program is only as good as the publishers within that program.”
Affiliate marketing, in which a business rewards its affiliates for bringing new customers, has been evolving at a rapid pace with the growth of the internet. Customers are more easily reached, but that creates something of a quality issue.
However, the future is bright. According to a recent study from Rakuten Marketing and Forrester Consulting, the industry is expected to grow 10% each year from 2015 to 2020 to be valued at $6.8 billion by 2020.
New Opportunities in Affiliate Marketing
The first decision for adidas, Lamothe says, was to ensure the proper resources were dedicated to and within the program. Prior to 2012, Adidas was working with too many companies that weren’t worried about efficiency in the same way it was, so the company had to make some changes. In addition, adidas cut the number of affiliates it worked with at any given time from 50 down to five or 10.
“The biggest effort is right at the outset, the beginning,” Lamothe says of weeding out lower-quality publishers. “You have to clean up all the publishers you have now. That’s the biggest effort. If you put the right measurements in place, it’s easier going forward.”
Adidas was also watchful of what it paid out to affiliates. Instead of giving every affiliate an 8-10% commission for posting, affiliates who came in closer to midway through a campaign would get closer to 1% or 2%.
Adidas’s move toward affiliate marketing improvement is not surprising, according to Robert Glazer, founder and managing director of Acceleration Partners, who spoke at the same session at ICRE 2016. More brands want end-to-end control of their affiliate marketing program, but many end up getting stuck in the old, less efficient generation of affiliate marketing, riddled by affiliates that bomb consumers with coupons, some of which are fraudulent.
“I think there are some structural issues with the model, but exciting new opportunities,” Glazer says. “Retailers want more measurement across all channels.”
Finding adidas’ Niche
Adidas found many of its new partners by searching for publishers that were already writing about the company by looking at its list of referral URLs leading to the adidas website, Lamothe says. When an event like the World Cup or a major mixed martial arts fight would happen, major spikes would occur. Adidas took note of where traffic came from and cultivated relationships with those publishers to drive traffic across the year.
By tracking who was talking about adidas and making contact, as well as cutting out dead weight, Lamothe says adidas’ affiliate marketing value went up approximately 60% and the conversion rate was up 57% year-over-year. The company was able to add more than 150 new affiliates to its lineup over a couple of months.
Some examples of affiliate marketing work by adidas Group included:
Putting retail offers on affiliate websites to drive people to bricks-and-mortar stores.
Giving a welcome gift to new affiliate marketers, whether they came to adidas or adidas found them.
Rolling out storefronts managed by Reebok on CrossFit gym websites, equipping gym owners with the ability to offer free shipping and setting up the brand page for them.
Taking over 20-30 websites with avid soccer audiences during the World Cup and paying them on a performance basis.
The last example may seem small in nature, Lamonte says, especially when compared with affiliate marketing programs that would take over a larger website, such as ESPN.com. However, despite the smaller volume, Lamothe says using multiple, focused websites gave better performance, ROI and more media partners.
Adidas also looked to form more partnerships with gyms and athletes. This included a store on former UFC champion Ronda Rousey’s website, which was hosted by a third-party partner and Reebok (a company owned by adidas). Rousey’s “pop star” status, helped drive traffic from Rousey’s website to adidas’ website, where fans con buy gear.
By having access to Rousey’s page, Lamothe says Adidas was able to direct consumers to a country-specific adidas site to make sure products could be easily ordered and shipped.
“At the end of the day,” Lamothe says, “it was all about making sure the experience for the costumer was the best.”
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