Striving for Inefficiency

Written by Brook Schaaf

My old sales coach would often say, “There’s no such thing as an efficient human relationship.” I often think of this phrase in the context of affiliate marketing, our giant, tech-enabled web of inefficiency. For better and for worse, relationships and their associated emotions, like frustration and pleasure, are necessary for comprehension and decision-making in our space — what is this model? What are the engagement opportunities? What are the terms? What else can we do?

This reality extends beyond business development. It takes some amount of time for an affiliate to create content, especially if it is custom and extensive, but even scaled sites like coupon and reward pages require effort. This is not the case with walled gardens, retail media networks (a type of walled garden), and open-web programmatic advertising, where efficiency rules. Not coincidentally, dollar flow through these channels is much higher relative to associated outcomes.

Some industry leaders bemoan this constraint as a hindrance to growth. Some call acknowledgment of this reality either a benefit (what a great thing to have) or a cope (don’t pretend this isn’t a burden). Others, myself included, worry that we’ll continue to miss critical opportunities. 

As Mike McNerney wrote this week, “The big question (for this audience) is if the affiliate industry as we know it will be solving these big questions and innovating in a much bigger sandbox than it is used to, or sitting on the sidelines watching others build a new partnership model.”

This is an ongoing concern because, while we are well-networked within affiliate marketing, we struggle to get a seat at the grown-ups’ table when it comes to advertising allocations. Ironically, we abruptly find ourselves lacking relationships outside the channel. And, correspondingly and perversely, we have difficulty demonstrating the trust within our networks. I say perversely because affiliate marketing is actually the most accountable channel over which the advertiser has the greatest control and can best audit metrics. 

So what follows? 

1. Accept the nature of affiliate marketing. It simply demands more time and effort than other channels. (You know it’s true.)
2. Lean into our strengths. Our interpersonal trust, technical flexibility, accountability, transparency, and content capacity are powerful tools for reaching new audiences and expanding into other channels. 
3. Measure success differently. The dialogue itself is a win, regardless of the outcome.

And it’s not always no. Just this week, McNerney’s question was answered favorably. Per Hello Partner, “PayPal Honey Brings Its Deals to AI Search, Starting with ChatGPT.”

So the next time you hear someone lament the inefficiency of the space, remember that it’s a part of our nature, what sets us apart and makes us special, not something we want to fix. And if Honey’s win is anything to go by, we can take inspiration that players in the space will continue to form relationships, large and small.