If you are an SME you will understand that as your business grows you will start to be hounded by advertisers to buy their advertising space. This will be magazines, newspapers, websites, outdoor advertisers and events.
The conversation often is unsolicited and even if its requested, the response looks a lot like this:
We have been following your “company/ Instagram/ Facebook” and wanted to reach out to share a huge opportunity.
Our publication “insert name” is the leading in the category XY and we wanted to share with you more about our platform to bring massive traction to your brand!
The stats are rolled off and the company then asks for you to drop your details, or simply attaches their advertising deck for further information.
Needless to say, what they have to offer does sound simply amazing to a small and growing business. The idea jumps into your mind that perhaps you are one advert away from that illusive breakthrough, but in reality, the rates on offer are simply out of your budget.
So, you have an ingenious idea.
How about offering a special rate on your established Affiliate Program?
You craft the email explaining that you are impressed by the numbers and it certainly would make a big difference for your company, however your limited by budget. So the solution you have is a WIN-WIN. How about they sign up as an Affiliate to your Affiliate Program and;
– Their readers will get a discount
– They will get a % commission on all sales
– And you will get the advertising you really need!
Did we say WIN-WIN, how about triple-WIN!
The email is sent and a week later the advertiser writes back a simple one line:
“Sorry we don’t do Affiliate Marketing – please contact us again when you are able to look at the advertising rates.”
This is the step that has always baffled me as a small business owner. Why would a publication not want to draw revenue from sales? If their publication/ platform is as good as they say it is, then they stand to make a LOT MORE MONEY than if you simply took the advert. Heck, if Nike, Apple and a Bubble Tea company came in here offering 10% discount and 10% on referred sales, the advertising company would be quicker to sign the deal, than Trump coming up with a potential Covid vaccine!
What we have here is a broken system which is based upon gouging and a lack of confidence.
Firstly, lets address the confidence
If an advertiser was SURE they would be adding more VALUE to your company than their advertisement costs, then they would gladly work on an Affiliate basis. Simply put, they will make more money over time as an Affiliate than they would taking cash for placements.
They say the truth hurts and the truth of the situation is that they ARE NOT confident.
No matter how good their stats look, they are not confident they can convert sales for you. So ALL of the risk needs to be borne by you, the advertiser. If looked at the other way, they simply do not believe in their own hype and bull-sh*t.
So they gouge the market.
Big established companies know that they DO NOT want to offer Affiliate programs, because they can make lots more money if they do not give a % of every sale to someone else.
Let’s take a major company like Nike mentioned above. It is far smarter for Nike to spend $250,000 on a major national campaign, to net $25 million in sales. If Nike worked on an Affiliate based commission model, they would be giving out $2.5million in commission sales!
So, it makes sense for large brands to NOT HAVE affiliate programs and not offer publishers a cut of earnings on a cost per acquisition (CPA) model. Rather, to use their size to monopolize advertising space keeping a broken industry alive. For now.
This is a sliver lining here.
The reason why SME’s can now grow faster than any other time is history is due to the fact that Affiliate Marketing, combined with the internet and social media services, can inspire, engage and uplift faster than ever before. Companies that have Affiliate Marketing programs who are ok to work with micro-influencers or other partners, can leverage networks and cause a network effect. By the time a small brand becomes big, Advertisers know they have ‘missed the boat’ and will only get the crumbs of potential sales.
The biggest winners are those who want to participate early. Those who jump on the programs as they start and ride the wave of a brand. Helping it to become HUGE!
The Affiliate Marketing movement is so large that is may fully overtake traditional advertising in the next 20 years. Advertising platforms stuck in ‘old school’ business models will be forced to change models or risk being overtaken by thousands of willing Affiliates.
Will your company be part of the solution or part of the problem?