10X Less Clicking Is Not Clickless

Written by Brook Schaaf

The keynote panel at PI Live was well represented by Adam Ross of Awin, Santi Pierini of CJ, Sean Sewell of Partnerize, and Todd Crawford of impact.com. 

As it happens, the title about 10xing the industry was an echo of my own presentation two years earlier. This is, admittedly, a fairly generic exponential-growth theme, but mine had a special provenance, which is worth recounting. In brief, in the 1990s, the CEO of Mastercard realized his competitor was not so much American Express or Visa but cash payments. He went on to push for the usage of credit cards everywhere possible and saw a 10x jump in his company’s valuation. Were the headwinds not also at his back with the internet? Sure, but so are they for affiliate marketing now, which, correspondingly, should seek to kill the non-monetized commercial link. 

As I argue in The Affiliate Hypothesis, if value is received by the destination site, it is generally fair that remuneration goes the other direction. Moreover, affiliate-style commission-based compensation may be the best or even only way to provide said remuneration. With disclosure, this is fully ethical and has ancillary benefits of accountability and signal capture.

You might say that this point is quickly becoming moot as click volume drops, but I would counter that: 

1) even if there are fewer clicks, they are not ever going away entirely as long as there is an internet 

2) the value of the content actually could increase because clicks are lost to AI answers, which depend on quality (i.e., human-written) content for inference. 

In this context, we might—counterintuitively—be better positioned to 10X the space than we were before AI. Here the panelists seemed sober and optimistic, if also a touch w(e)ary. 

As the panelists said (forgive my Zagat/Chatham House anonymous mash-up), the key to getting there is “value capture,” leveraging AI as a “force multiplier” based on linking evidence to outcomes as opposed to just “logo swapping.”

 It was observed that the channel built its own “ceiling” or “prison” on a powerful unique selling proposition that necessarily and ironically also foreshortened its own growth. I would characterize this as a double-edged sword, but the point is basically the same. Because of this, we can’t spend money quickly enough. This may sound crazy to a performance-hearted marketer, but it’s more or less true and not a challenge the other channels battle with.

It was pointed out that if affiliate marketing as a channel is ballpark about 25 billion dollars globally (about 2.5% of a trillion in annual spend), then 10X in ten years means 26% compounded year-over-year growth, which would make the channel Google- or Meta-sized. Right now that’s very, very far away, but if we got credit for all influence and all touches, a path emerges. A study out of Germany found that affiliate touches about 25% of transactions in their area: 25% of a trillion is the 250 billion number. Does that mean it should be recognized at this level? Probably not, but you’re kidding yourself if you think other channels aren’t getting away with this when they “grade their own homework,” another phrase I was pleased to hear on stage.

One of moderator Jen Goodwin’s excellent questions was how affiliate would spend a hundred million dollars offered by a major brand. Unfortunately, in my own humble opinion, no one had a crisp answer to this, though directionally “full funnel… GEO… incremental contributions… manufacturer brand payments” all seem pretty solid. Should affiliate make a big push for, say, impression tracking? It was pointed out that it was there from the get-go, but affiliates usually stripped out tracking pixels, not wanting to weigh their pages down for zero compensation. Could we bring them back? Sure, but they’d still be lost among AI overviews, so why bother?

On the after-action panel, Steven Brown of Moonpull and I took a little time to discuss the history of MMM vs. MTA, which I don’t think most marketers are well familiar with. Mixed Media Modeling (or whatever the abbreviation stands for) is a massive math equation that requires time and holdouts. Multi-Touch Attribution, an alternative to single-touch models like last-click, was considered a wonderful new technology upon its advent. While it has its problems, so does MMM, especially with recognizing affiliate channel contributions. MMM’s revitalization seems to be, in part, an attempt to salvage dubious economics of other channels. I’m not saying it’s bad, per se, but as an affiliate marketer, it might be bad for you. Years ago, CJ was the first to observe that GA4 undercounted affiliate traffic. Do you doubt that Google’s free new Meridian MMM will do otherwise? Be aware, be wary.

A panelist said we ultimately need a “new baseline measurement.” Steven and I agreed. My own suggestion here is that affiliate marketing should push for a joint deterministic (click/coupon/page/number) and probabilistic number pairing. Steven has similar views. 

The tracking platform can offer different methodologies and corresponding derivative ratios for the merchant to choose from, which can be compared to other channels on an apples-to-apples basis and (this part is key) can then be communicated to the affiliate. Right now, this communication is basically a missing link in the space. Soon I’ll say more about its importance.