Are retail media networks in affiliate’s future?
Written by Brook Schaaf
It was wonderful to go back to Santa Barbara for the first CJU since Covid — always a well organized show. I had to leave early for another trip and chanced upon the sagacious Dan Sweeney (formerly of CJ and Groupon) at the airport.
He has temporarily left our channel (“temporarily” because everyone returns to affiliate, you know) and is now with big data company LiveRamp. He talked of retail media networks (RMNs), which reminded me of an excellent thought piece from earlier this year by Michael Jaconi, Button’s CEO.
Jaconi’s thesis is that “retail media is a way for affiliate companies to escape the enterprise value smurfdom they’ve faced by incorporating their media and shopping intent into a retail media offering.” He cites that affiliate networks trade in the 2-10X revenue range compared to 15-20x for commerce advertising companies like Shopify.
The idea here is that RMNS and affiliate sites are strongly associated with purchases, which keeps funding ongoing. Affiliate, however, is difficult to scale because affiliates don’t necessarily have more traffic to send, but . . . what if they tapped into RMN demand-side inventory looking for supply?
In a roundabout way, this is kind of already happening with shadow networks paying supplemental commissions for Amazon purchases. As a case in point, Refersion just announced “Amazon Affiliate Marketing by Refersion.”
Affiliate shows no signs of slowing down. In fact, with so much likely to come, perhaps Dan will be drawn back in sooner rather than later.