Dr. Jeremy Weisz: 16:32
Yeah. Let’s talk about I wanted to get into I’ll get into some of those other questions, like, you know, compliance regulation. But I know there are different types of affiliate partnerships. I don’t know if you want to walk us through some of those, because I know there are a lot of misconceptions out there. When they heard people hear the term affiliate and what that is.
So what are some of the types? And we can maybe talk through some examples?
Rick Gardiner: 16:58
Yeah. Affiliate is a very broad term, depending on the industry you’re working in. But you know, as it relates to our universe, I think a lot of people are familiar with kind of the foundational affiliates, you know, deal sites, loyalty, cash back content, coupons. You know, where we really get excited and are really on some of these emerging and growth partnerships. That’s what we call them. And those tend to be some of the influencers, you know, technology partners, on-site technology partners, strategic B2B partnerships. So, really, tapping into working with another brand to tap into a shared audience or customer segment.
Dr. Jeremy Weisz: 17:43
What does that look like typically?
Rick Gardiner: 17:45
Well, an example would be we worked with a VPN brand very early on in agency Anchorfree, and we did a cross promotion with Malwarebytes, where basically we did an email exchange where we did some cross promotion of email sends. So, you know, that’s one example. You know, we can do different brand bundles and things like that collaboratively.
You know, at the end of the day, affiliate marketing is really a payment model and a payment method. So it’s all performance-based and easily trackable and attributable to revenue. And so really it’s the sky’s the limit in terms of the types of B2B partnerships you can do. The most important thing is that it’s relevant to your tapping into the right customer segments and audiences.
Dr. Jeremy Weisz: 18:41
Are there certain segments that you’re focused on? I remember like to your point, I think it’s like the smartest thing someone could do, like because I don’t remember which product it was because I buy a lot of protein related products, but I don’t remember it was Magic Spoon, like the cereal or three wishes or something, but I definitely got some marketing material from another like protein chip company, and I’m like, oh, I was interested in it because, you know.
I was a customer of his other company. I wasn’t like, why are they sending this to me? I was actually interested in the, in the, those types of products. So I think it’s a smart move. And they probably spent a lot of money acquiring those customers, and they could probably make some money back up promoting a similar, you know, type of product. And I’m sure that that company is doing the same for them. So it seems like a smart move.
Rick Gardiner: 19:28
Yeah, we see this a lot in the software space too. I mean, health, the health and wellness space is super competitive, and everybody’s looking for that edge and way to kind of break out of the noise. So there’s a lot of collaboration, and especially if you have two different brands that are really kind of helping support a specific goal or health initiative, you can create some really good momentum. But, you know, for software on the digital side, free products, you know, using the free version of an app, you know, you may see ads for other brands or merchants.
Sometimes those are, you know, affiliate links that are being used so they can generate revenue passively through the channel. But, you know, it’s very low risk. You know, you only pay for the actions and conversions you’re looking to drive. So it is surprising that more brands aren’t doing it. But we’ve definitely seen significant growth just with increasing ad spend costs, you know, paid costs going through the roof. Having less ability to target through some of the different social media platforms, things of that nature.
So it’s definitely getting more attention and getting a bigger seat at the marketing table.
Dr. Jeremy Weisz: 20:46
Rick, talk about the evolution of your type of client from when you started. What were some of the milestone-type clients you worked with, and then what type of clients do you work with now?
Rick Gardiner: 20:56
Yeah, one of our first kind of lighthouse clients was Groupon, when they were just launching an affiliate program, and I was introduced to them through a salesperson that I worked with at a startup right out of college, and they were just looking for help of, you know, how do we do this? How do we set it up? And so their.
Dr. Jeremy Weisz: 21:15
The whole model is that, I mean, you know, being in Chicago, I saw when Groupon first was putting out their first few deals, I mean, even their partnerships are affiliate. I mean, they’re promoting their whole model as affiliates essentially.
Rick Gardiner: 21:29
So yeah, they they were kind of a trailblazer into the whole retail media segment, too, when they started promoting other brands. And it wasn’t necessarily a Groupon because it’s kind of separate channels within their business, or at least it was at the time. You know, where they have, you know, their daily deals, local deals that are, you know, kind of brokered specifically through the platform. But then they were also offering other discounts and deals, you know, as basically an affiliate of these other merchants. So, yeah, they were one of the first and kind of led the way in that whole retail media space.
Dr. Jeremy Weisz: 22:09
What kind of things were you advising them?
Rick Gardiner: 22:14
We were advising them against it, actually, initially because of just the leakage of, you know, you have somebody coming to our site through maybe an affiliate link, and then they’re going to click through an affiliate link on Groupon and go to a different brand that cuts the affiliate out so it can make some waves and and not the good ones. So you know that that was kind of our, our thought at the time.
And we started testing it and started to see some decent traction. And it definitely built momentum over time. It wasn’t an overnight hit, but I think a lot more, you know, what you see with like Best Buy and Walmart and some of these retailers doing on-site promoting other merchants that, you know, they may not be selling in-store, but they get a ton of traffic to their site. They’re working on the publisher’s side as an affiliate. And it’s, again, a nice supplemental revenue stream for the business.
Dr. Jeremy Weisz: 23:11
I mean, this is everywhere, right? And I’m not sure you ever work with, maybe you work with brands for like credit card companies, but like, I, you know, sign up for an American Express credit card. And there’s if you buy this from Dunkin Donuts, right, you get X amount free through, you know, through rewards or points or things like that. So there are so many of these like type of partnerships.
Rick Gardiner: 23:36
Yeah. Card-linked offers have definitely come in heavy within the industry. You know, the nice thing with the card-linked offer aspect, too, is you know, it kind of breaks away from just the e-commerce business, too. You can start getting into retail and brick-and-mortar. And so yeah, we help brands get set up with Amex, Capital One, Chase, some of the big publishers in the card networks and the the beauty there is, they have a ton of shopping data where you can do some really targeted campaigns to, you know, people that have never bought from a brand, people that haven’t bought in six, 12, 18 months, whatever that may be. You can get really granular, so you can do some really cool things with those card-linked offer partnerships.
Dr. Jeremy Weisz: 24:26
It’s also, I think, high trust, right? It’s like, oh, it’s on Amex. Then it must be a decent brand, right? Even though I’ve never heard of it before.
Rick Gardiner: 24:35
Exactly. Yeah. No, there’s definitely that trust and kind of association of being on an Amex, you know, being a merchant on Amex that, you know, creates trust, and even for, you know, a consumer that’s never bought from a brand before, they’ll offer an incentive to kick the tires, try a product. So yeah, it can be a great new customer acquisition partnership.
Dr. Jeremy Weisz: 25:02
So Groupon was an early customer client. What were some of the other types of clients?
Rick Gardiner: 25:12
Some of them aren’t even around anymore. We had, you know, software clients that specialized in DVD conversion software. I don’t think anybody. I don’t own a DVD player anymore. But, you know, we had a lot of different, you know, AV software, internet security. That space has evolved quite a bit. And, you know, I think we started to expand into some more apparel brands, you know, home goods, outdoor subscription, you know, Home Chef and other great Chicago brands. They were a long-time client and a great partner. So yeah, we just started.
Dr. Jeremy Weisz: 25:55
On your site. Oh, they’re huge. Yeah.
Rick Gardiner: 25:58
Yeah. They’re great. Great clients love working with their team. And yeah, we just started working with a few more household name brands, which is more fun, right? I mean, internet security and software are great. It serves its function. But most people are shopping because, you know, they have an issue. Their computer got hacked or their identity got stolen. Whereas, you know, OXO, Hydro Flask, Ping Golf, all of these brands. This is something that brings people joy and pleasure. It’s a passion. And the types of partners that come along with that, you know, they tend to be more enthusiastic. So that’s where creators and influencers start to come into play. And yeah, it’s just been really it’s been a fun evolution. And, you know, we’ve got a great portfolio of clients and a great team to help support them.
Dr. Jeremy Weisz: 26:47
So when people are thinking of the types of affiliate partnerships, maybe talk about Hydro Flask for a second and what you did with them.
Rick Gardiner: 26:55
Yeah, no. We’ve done a lot of different partnerships with Hydro Flask. I think one of the things that, you know, they’ve struggled with is just, you know, it’s a very competitive market. It’s very saturated. There’s a lot of noise, there’s a lot of products that are similar. And so what we did with them was more, you know, working with their PR team. So one thing that we’ve found, you know, with the evolution of the industry is just kind of either cross-agency collaboration or interdepartmental collaboration between internal marketing teams. Kind of early on, it was either you had an outsourced agency or you did it in-house.
And with Hydro Flask, we worked with their PR team to build out a strategy and just help them gain more market share through some content placements on food and wine and some other publications that, you know, drive significant revenue and volume and also have an incredible return on ad spend. So yeah, it’s especially with those saturated markets or commodity-type products, you know, having the right partners is, you know, almost a competitive differentiation or, or moat, if you will. People can’t easily recreate those partnerships. And for them, for Hydro Flask, it worked really well.
Dr. Jeremy Weisz: 28:24
What type of you know what you do kind of crosses over different departments in a company. What kind of departments? I don’t know, maybe you start with one, you start working with others. But what departments are you typically working with when you go into a brand?
Rick Gardiner: 28:39
I would say it’s primarily the growth or customer acquisition, you know, e-commerce team. I would say the collaboration tends to happen most with the PR just because, you know, they’re working on, you know, they have relationships with some of the mass media companies that we work with. I think the main difference between PR teams and affiliates is that PR tends to be more editorial driven, whereas affiliate, we tend to work more with the commerce and partnership teams.
Once brands have been vetted or products have been vetted by editorial, you know, we engage with them on a more regular cadence, just, you know, have more coverage organically. But I think PR, you know, sometimes we’ll work with the paid search team depending on what their paid search strategy is. If there’s anything we can do to help, do to help support them. And yeah, as long as we don’t have to deal with their legal team outside of contract negotiations, it’s a good, good deal.
Dr. Jeremy Weisz: 29:44
What about Savory Spice? What did you do with them?
Rick Gardiner: 29:47
Yeah, Savory Spice was an interesting story. They’re a very niche spice company out of Colorado, and we helped get them featured on the Today show. And you know, they have you know, again, there’s some really big players in the space. And when we started working with them, they hadn’t had the best luck working with affiliates historically. And so it took.
I don’t know exactly oftentimes well Sometimes if brands just kind of auto approve affiliates that apply to the program, you don’t really know who’s working.
You know who’s promoting the brand. I don’t remember the specific use case there. But, you know, if the affiliate program wasn’t as, you know, as productive or effective as it could be. And so we kind of came in and shifted the focus more on quality partnerships versus just quantity and, you know, started getting them featured and building partnerships with some pretty high-end mass media publications, content, and food creators. You know, their seasonality is a little bit different, especially with the barbecue season in the summer. Typically, that’s a slowdown for a lot of, you know.
Dr. Jeremy Weisz: 31:09
eCommerce site, because it’s making me hungry here.
Rick Gardiner: 31:12
So they have some great recipes, and their products are amazing. We got a couple of good gift baskets from them, I’m sure.
Dr. Jeremy Weisz: 31:19
I’m curious about. Is there a formula for the percentage of what people should be paying? Because I imagine that some of the like the software companies have more margin than obviously, you know, a spice or a water bottle or something like that. Is there some kind of formula there? Like, hey, Rick, I have no idea. What should I be paying my affiliates here? Like what percentage?
Rick Gardiner: 31:47
Yeah, it truly varies. You know, our approach is we do some competitive benchmarking, seeing what their competitors are paying. And then, you know, we’re a very numbers-driven, metrics-driven organization. So at the end of the day, it comes down to making sure we’re hitting their ROI and margin goals. And so we can do some, you know, reverse engineering of some math to make sure that the commissions are aligned with their, their customer acquisition cost goals. And even with that, you know, that may vary by SKU, by product, by vertical category, product category.
We can do specific commissions by SKU or product. So it may not be a blended, you know, 10% or 5% across the board. It may be at a skew level and also pay out differently for a net new or new to file customer versus a returning or existing customer, because, you know, those new customers are definitely more valuable. But also retaining customers is incredibly valuable, so it’s important to maintain those relationships and compensate partners accordingly.
Dr. Jeremy Weisz: 32:59
I’m wondering, best practice? I’m sure it depends. But you know, you mentioned net new, okay, they drive someone, and if they stumble across someone who’s already a current client, maybe they’ll get paid a certain percentage. Are there best practices on how long? So this person comes back, they buy something, and they come back in like two weeks, and they buy, you know, $500 worth of spices or something. Does the partner typically get credit for that? Just one of the best practices of time frame. Or maybe they only get it on initial sale for click-through. How do you think about those things?
Rick Gardiner: 33:41
Yeah, that’s a great question. You know it. We’ve done a lot of research into click-to-conversion timelines. And frankly, most transactions do take place within 24 or 48 hours. But you know, it’s nice, it makes affiliates feel good when they know that, hey, even if they don’t buy something. Day one, you know, two weeks, 30 days after, they’ll still get credit for that transaction.
So I think, you know, it’s pretty common to see referral windows between seven days and 30 days. Once you start getting much beyond that, it gets a little mucky because it starts to, you know, other channels may be involved for retargeting and things of that nature. But I would say most of the programs we manage range from a seven-day window to maybe a 3045 day.
Dr. Jeremy Weisz: 34:37
So, back to types of affiliate partnerships. Which ones should we talk about that we haven’t hit on? That would be interesting for people to think about.
Rick Gardiner: 34:45
I think we’ve talked about quite a few. I think, you know, the ones that we’re really focused on this year anyway are some of those on-site technology partners. A lot of brands have on-site technology that helps with retention, you know, increasing AOV or basket size. And so we look at it as, you know, a company or client will have their own tech stack and a great way to test and, you know, test or plug a gap would be to bring in a technology affiliate to fill that gap. There are a number of partners out there, like upsell it increasingly, that do a really good job. You know, either recovering, you know, somebody who abandoned cart, or just keeping the consumer engaged on site. But what we found to be most successful or work be most effectively is when there’s a goal or outcome in mind, or focusing the partnership based on a specific goal.
So, for example, if we want to, you know, target new to file customers, people that have never purchased from the brand before, you know, having those on-site technology partners engage with those consumers only to help just kind of ramp and lean into converting those customers. I think sometimes people get a little bit hesitant with on site technology partnerships because one, they may already have something that’s working okay or fairly well already, or, you know, they don’t want to deal with the the integration or, you know, there’s just a lot of uncertainty around how it could impact conversion or potentially have a downside. And so we like to kind of walk before we run, you know, do some split testing or multi-variant testing to just kind of see which, if there’s an affiliate partner that’s going to outperform what their existing tech stack is. Let’s lean into that.
Or in some cases, maybe they aren’t. You know, they’re already doing it better than the partner. So then let’s just kind of leave what’s in place alone. But I think the technology space is always evolving. You know, AI tools, things of that nature, to help with consumer engagement. We use it, you know, from a partnership perspective, being able to identify partners that will help brands show up in the different language learning models. But technology is definitely always at the forefront. But I think the content creator space is just booming. And so that’s really where a lot of our clients are looking for help, just, you know, leveraging those relationships that we’ve built over the years with, you know, top influencers, top creators, and mass media publications.
Dr. Jeremy Weisz: 37:43
I mean, I can imagine, Rick, if I’m a, you know, someone that I’m going to promote a brand and they have a pop-up that has get a percentage off, enter email, get a percentage off, enter your text. To me, that’s attractive because it’s like it’s capturing their information. So it will, you know, offer them and market to them.
Rick Gardiner: 38:04
But you’ve probably also had a bad experience with that, where it’s very obnoxious and in your face. And so yeah, yeah, when done well.
Dr. Jeremy Weisz: 38:12
Like, I mean, I guess for me, I just, if I don’t want it, I just like exit out. It’s, I mean, maybe I’m just not, I don’t get mad at those things, but, you know, it’s just my personality. But that stuff doesn’t bother me personally. You know, if it’s something I want to get again, I almost want them to retarget me because I’m like, oh, I don’t have time to buy it now. I hope they retarget me. So I like that they follow me around.
Rick Gardiner: 38:35
And I mean, you’re gonna, it’s about client education too, right? Or customer education, something you bought. Maybe they have something new coming out, or just learn how to use their product better, more effectively. There’s a lot of value there. I think, you know, what brands are afraid of is that it’s going to create a kind of negative experience for the consumer. And obviously, we work with reputable partners. And, you know, we have full control over, you know, how we integrate and make sure that they’re adding value and not kind of rubbing people the wrong way.
Dr. Jeremy Weisz: 39:11
You know, on the types of, you know, affiliates. I know before we hit record, we were talking, I don’t know how it works as far as like retailer you mentioned, like Ulta and Sephora. How do those types of partnerships work?
Rick Gardiner: 39:25
Yeah. So, you know, traditionally, affiliate has always been very much focused on, you know, companies that have a B2C e-commerce presence. You know, Amazon and Walmart are now opening up their marketplaces, allowing tracking platforms like Levanta to come in and have more, you know, more visibility and control of how they’re working with affiliates that are driving traffic to their marketplace stores, Sephora and Ulta and, you know, Best Buy and some of these other retailers, you know, the retail media side of things. So is also kind of along that same vein of Amazon marketplaces where, you know, essentially, you know, you can drive traffic to their their site or in some cases.
These brands are now opening up their affiliate programs, their partnerships for brands that they may sell in store or that they may be testing as a potential in-store product to kind of invest in and work with the brand to help, you know, increase sales and sell more products. But leveraging the brand’s affiliate program without having to go and build the brand, having to go and build their own. So it’s pretty unique. It’s definitely kind of on the tip of the spear of the industry of, you know, the retail media side of it. But it’s pretty exciting. I mean, you think about, you know, Sephora, Alta, these brands are they’ve been around forever. They have very robust affiliate partnerships. And to be for a product brand come in and be able to tap into that is a pretty powerful partnership.
Dr. Jeremy Weisz: 41:14
And what size does a company have to be? To work with someone like you is a certain revenue. They have to be at or how does it work?
Rick Gardiner: 41:24
Yeah, typically our clients are generating somewhere between 10 and 20 million in B2C e-commerce revenue. You know, we’ve worked with emerging or high-growth brands that are, you know, may have some VC funding or whatnot behind them that are on a good growth trajectory, but that tends to be or has been kind of our guide on that. There are some other metrics in terms of site traffic, you know, are they generating 100,000 uniques a month? Things of that nature that can be helpful. But when you start looking at programs that are on Amazon, and some of these marketplaces, some of those metrics aren’t available. Or, you know, it’s not as easy to decipher. And so we try to really understand what the goals and outcomes are of the brand and look at whether we can help them or not.
And, you know, we can build. We have the playbooks. We can focus on outcomes and goals. And, you know, we tend to be realistic when it comes to building out forecasts and revenue projections of what this affiliate channel or affiliate program can do, because it is an investment and it does take time to build those partnerships, get them onboarded, and get them driving traffic and sales for brands. But, you know, it’s a mix of short term kind of lift and also long term just strategic growth for the business and kind of fitting into the full suite, you know, the full marketing mix and, You know, again it’s, it’s it’s been a evolution and you know with the, the click costs and ad spend being what it is, it’s definitely getting more attention as and becoming more attractive for brands.
Dr. Jeremy Weisz: 43:20
You know, I know that with what you do, relationships are kind of the foundational piece. So I’m wondering what you’ve learned in forming amazing and sustainable relationships with, you know, companies or companies and individuals.
Rick Gardiner: 43:39
Yeah, a couple of things come to mind. I think, you know, personal connection is always, you know, important to me. And just getting to know the whoever, you know, our point of contact is or the team that we’re working with, you know, business is great, but I think, you know, the the where I find most value or I get is most fulfilling for me is, you know, former clients that we may not even be working with, but, you know, we’re still staying in touch. We’re, you know, asking how our kids and families are doing what they’re doing for the holidays, things of that nature. That’s always been really important and again, fulfilling from my end.
And kind of to your point, too, I think, you know, there’s a lot of agencies out there. And, you know, sometimes it’s hard to differentiate. So having that personal connection or that relationship can really be a big point of differentiation and building trust. And so, you know, there are creative ways I always, you know, like to find creative gifts and things to share with new clients and just create a positive experience for them, you know, working with us and, you know, even after the fact, continuing to stay in touch has always been great.
Dr. Jeremy Weisz: 44:57
Is there an interesting, most interesting gift you sent to someone over the years that sticks out or that you’ve received?
Rick Gardiner: 45:05
We used to send money trees to all of our new clients. So they’re like a little bonsai tree. And we stopped after. I could not keep one alive for more than 3 or 6 months. I’m like, and I’m not.
You want to.
Dr. Jeremy Weisz: 45:19
Kill the money.
Rick Gardiner: 45:19
Tree? Yeah. It’s just like a bad omen or something, I don’t know.
Dr. Jeremy Weisz: 45:24
Just get someone make a plastic one or something. You can’t kill it.
Rick Gardiner: 45:28
But now what we’ve been doing, and this is a new initiative. We’ve been partnering with another brand, Woodchuck USA, in town. And with their Buy One Plant One initiative. So we’ve been starting to use this where we’ll be planting trees here in Minnesota.
Dr. Jeremy Weisz: 45:47
And the ones you killed, you’re planting new ones.
Rick Gardiner: 45:49
Yeah, we’re trying to we’re trying to make good here. But you know, I think it’s a little bit unique. It’s a little bit different. It’s, you know, making the world a better place and, you know, outside of just the trees to just the habitats. So for the animals and all that good stuff.
But yeah, we’re always trying to find unique ways to connect. And you know this is another example.
Dr. Jeremy Weisz: 46:15
I love it, Rick. First of all, thank you. I mean, I love hearing your thoughts, your journey, your evolution, and all about I mean, really, the foundational thing is helping individuals or companies help build better relationships and more customers. So thank you. Everyone can check out iaffiliatemanagement.com to learn more. And we’ll see everyone next time. Rick. Thanks so much.
Rick Gardiner: 46:41
Thanks, Jeremy.
