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Affiliate Marketing For Shareholders – What Matters? (Case study 2020)

Unfortunately, confidence in marketing leaves something to be desired. Year after year, in the poll of the market research firm GfK, marketers end up in the bottom echelons regarding the trust people have in professional groups. Many organizations feed this result with their practices.

Food watchdog Foodwatch has even created its own Wheel of Five variants for this purpose, namely that of deception. Number 1 is ‘nonsense marketing’. It often goes further than deception, such as deliberately avoiding agreements. 

For example, some food companies evade advertising agreements about unhealthy food targeting children by petting them in with computer games. But adults too fall prey to misleading affiliate marketing. Think of customers who are persuaded to purchase complex financial products that they do not understand and of which they cannot foresee the consequences.

Is fair affiliate marketing – an illusion?

In many of these cases, affiliate marketing is still mainly seen as an instrument to make a product or service known to communicate to stimulate sales. It is not without reason that affiliate marketing evokes the association with advertising and sales in many people. Although we all know that this is too limited a conception of marketing, it does color the image. 

The examples cited make critics wonder whether fair affiliate marketing is an illusion. In many cases, affiliate marketing is also aimed at the short term, and its effects are not or insufficiently demonstrated. Related to this, the marketing function appears to be relatively limited at the top of organizations.

The marketer threatens to end up in a vicious circle: because he adds too little value, he is seen as less valuable, which reduces his impact and allows him to add less value. And voilà, the critics are right: affiliate marketing has little or no value. Even reputable companies with a lot of marketing expertise fall into this trap.

Think Starbucks. Until 2007 a very successful company and very popular among investors. Until it went wrong. Starbucks had become more and more a sales-driven organization in order to please the investors. This resulted in “over-marketing,” whereby the primary focus on the customer was lost, as well as the value that Starbucks initially wanted to offer it: a nice cup of coffee in a pleasant environment. Coffee making was no longer traditional but automated. And the place where it was consumed was more a shop aimed at selling all kinds of stuff than a pleasant meeting space. The magic was gone, and customers turned their backs on the company. 

affiliate marketing

Only after Howard Schultz returned the company to the focus with which it had grown big was that success returned. The Starbucks case illustrates that too narrow a view of affiliate marketing — focusing more on communication and sales than offering and realizing value — leaves the long-term value of affiliate marketing untapped. Opportunities are missed. Even after initial success, as we saw at Starbucks.

As a result, affiliate marketing doesn’t matter. 

That is why it is important for marketers and those affected by affiliate marketing — whether as consumers or as stakeholders — to understand how marketing has value. What does that value mean, for whom, and how can it be realized? As we saw at Starbucks. As a result, marketing doesn’t matter.

Value to all stakeholders

Consumers pay a fair price for ‘real food’, and suppliers receive fair compensation. No price pressure and the associated “squeezing” of the chain. This vision, which goes beyond value for the customer and the own organization, is in line with the increasing importance of systems thinking. After all, value is increasingly created in and through a network of stakeholders.

It is not without reason that the authoritative institute American Marketing Association  defines marketing as:

Activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large

Marketing today creates and realizes demonstrable value for all its stakeholders. It does this in close collaboration with all parties, internal and external, that are necessary for this.

Companies such as Home Depot in the United States and Woolworths in South Africa set explicit goals that they want to achieve among their stakeholders and report annually on their progress towards achieving them. The value that Starbucks delivers to customers cannot be without an eye for supplier, shareholder, and employee.

Thus, the focus of affiliate marketing has broadened considerably, and the marketing function is no longer limited to a single department. That department can indeed steer value creation and value realization, but the underlying processes’ actual implementation affects all those involved. Therefore, affiliate marketing has become too important to be left to the marketer alone but must be done together with that marketer.

This requires the marketer and organization to transcend the level of flat marketing, as demonstrated by the examples as mentioned earlier. And the short-term focus must be exchanged for a longer-term vision on value creation and value realization for all stakeholders.

Marketers, therefore, have an important role to play, and that role is changing dramatically.

Affiliate marketing as a director of value

Increasingly, the product or service as a “carrier” of customer experience is central. The product or service itself is only part of that total customer experience. Starbucks understood this all too well when it saw its customers leave in droves after the customer experience was increasingly reduced to a transaction. 

Think of Hilti, which was able to innovate the sale of construction equipment by introducing subscription contracts whereby the professional customer has the latest equipment available at a fixed cost, together with Hilti’s support.

Or in healthcare, where Jan van Bodegom founded the Alexander Monro hospital, which is specialized in breast cancer, based on the needs and experiences of patients.

In these cases, the role of affiliate marketing changes from a consumer-oriented provider of products or services to that of a facilitator of co-creation of customer value. Value is defined based on the intended experience of the customer, and the account is taken of value realization for all interested parties. All parties in the system play an important role.

That is why the marketer must know well, which goals the parties involved are pursuing and evaluate the extent to which these are achieved. To this end, affiliate marketing should have a broader perspective than just a focus on the customer.

Then her role can also be broader. In that case, affiliate marketing is no longer a department that operates fairly isolated from other functions and the top of the organization, but a function that directs the value process (creation and realization) between organization and environment. 

Affiliate marketing is the pivot in the internal web of business functions and the external web of stakeholders and knowledge providers. The logic of value creation and value realization is the basis for the efficient and effective management of these networks. 

The marketer continuously monitors this logic and plays a leading role in it. That is to say that he or she others, internal and external, stimulates, motivates and mobilizes with a view of this process and, where necessary, makes adjustments to achieve the goal of customers, organization, shareholders, and stakeholders.

In this way, it is monitored that activities goal-orientedfor whom these goals are pursued, and the extent to which the organization is on track to realize them. 

This requires a business model that makes the logic of value creation and value realization very transparent. And that is precisely what marketing has an important contribution to make.

Empower marketing at the top

Research shows that an influential marketing department is a good news because it improves business performance. However, the influence of affiliate marketing still focuses mainly on the domain that we traditionally attribute to marketing: target group choice, positioning and communication, and maintaining the customer relationship. 

Nothing wrong with that in itself, but as I said before, that is no longer enough today. Markets are changing too quickly for this, and a number of developments are occurring, including in the technological, social, and cultural fields, which require modern affiliate marketing to take on a new role.

Faced with a new reality, marketing must develop new skills that are more diverse and flexible than before and extend beyond the mere marketing function.

For example, organizations must be increasingly able to deal with complex (big) data, respond to heterogeneous customer requirements, understand and serve complex customer journeys, orchestrate unique customer experiences, monitor and satisfy changing customer needs, anticipate new competitors and offer innovative solutions. 

This requires quick learning and application of knowledge from sometimes completely new angles.

The field of marketing is, therefore, broadening. After all, the customer can enter the organization in many ways and create value with the organization, whether or not in collaboration with its partners. A marketing function that is mainly concerned with communication and sales is missing the boat. Especially when the more strategic aspects of marketing are not or insufficiently covered at the top level.

Ironically, the marketing function has slipped further and further into the organization, while the need for marketing thinking at the top of the organization has only increased. Without a strategic vision on marketing, it cannot fulfill its role in the value creation and value realization process. This is a far cry from the traditional marketing department that mainly deals with marketing tactics.

Modern organizations are embracing marketing as a function that helps guide value creation for its customers and stakeholders and enables it to demonstrate its success in doing so. 

Modern marketing creates value in a way that is accountable, sustainable, and desirable. In many cases, it will not be assigned this role of its own accord, on the contrary. Marketers will have to fight to play that role.

For the sake of their organizations and stakeholders and for themselves. Because if they don’t do it, their position will only come under more pressure, and marketing will eventually become a really dirty word. And that comes at the expense of everyone.