Affiliate marketing has proven to be an incredibly effective way for businesses to expand their reach, increase sales, and generate revenue. This advertising model, in which third-party publishers promote a brand's products or services and earn a commission for conversions generated, continues growing in popularity – here's why.
Research shows that the average return on ad spending (ROAS) in affiliate marketing is 12:1, meaning – for every dollar invested, brands make $12. This explains why 80 percent of brands use this marketing tactic and increase their budgets every year. Affiliate marketing spending in the UK alone reached £79.3 million in 2021, which is up from £73.8 million a year earlier.
“Though, not all of this money is spent efficiently,” stresses David Harris, Tech Team Lead of the affiliate marketing platform ReferOn. The company has developed a technology that helps marketers in the iGaming industry – one of the top industries to make use of affiliate marketing – to ensure efficient spending of their budgets.
We spoke to David to discover the challenges affiliate markers face that result in inefficient use of resources and what features they built to fix it.
Three typical affiliate marketing challenges
Despite the widespread adoption of affiliate marketing in the iGaming industry, there are several challenges affiliate program managers face that can affect the effectiveness of their campaigns.
Here are the most common ones.
- Adapting market vs. non-adapting programs
“The iGaming market is always changing, and so are the needs of users – affiliates, affiliate managers, program admins, etc. There are legacy programs that have been around for a long time but are very restrictive and just don't keep up with this ever-evolving market, latest trends, and even some user demands,” says David.
For example, transparency and access to data are becoming increasingly important for affiliate managers. This helps them make better and more informed decisions, which further allows them to improve the effectiveness of their campaigns.
However, in many platforms, the issue of data visibility is still not solved. For example, the modern user might want their reports to include four different parameters by day, but they only have access to reports that show two parameters by month – just because the platform is built that way and has always worked that way, for example, clicks by geo by affiliate by day.
- High-level analytical skills are required to understand the data
Another challenge many affiliate managers face is not being able to fully understand the data platforms provide. The data is provided in such a complex way that it requires high-level technical and analytical skills to first, retrieve this data and second, make sense of it.
In other words, many platforms are not intuitive enough to be effectively usable for someone with little or no technical background.
“As everyone knows, affiliate managers come from various backgrounds. In some cases, affiliate managers come into this profession with sales experience but have very little technical skills. This leads to the inability to truly understand data or how to use it effectively,” David explains.
This can negatively affect campaign efficiency. After all, you can't improve your campaign if you don't understand what's wrong with it. “It's important that platforms present the data in a user-friendly way. This will improve its users' ability to, for example, drill deep into affiliate revenue and make more effective commercial decisions quickly,” David adds.
- Losing money on prepayments and fixed fees
Another factor that can lead companies to incur losses is through prepayments and listings.
Affiliate marketing, in its essence, is performance marketing – remunerations are paid based on what is brought in. At the same time, it's increasingly becoming common practice for affiliates to request prepayments or fixed fees before anything is done - especially in new markets.
David says that there are cases when affiliates who have requested prepayments don't deliver what is promised. “Prepayments are especially high risk when you're targeting emerging markets or collaborating with new affiliates. There's just no historical data, so you have to take a calculated risk," he notes.
The situation is similar when it comes to fixed fees. “A typical example – a website ranking in the first position on a top site asks for, let's say, €2,000 fixed fee for a particular geo. This may seem worth it – top positions mean more traffic and more traffic means more new customers,” David says, but stresses that website positions can easily change. “So, you can pay €2,000 for the first position, but a week later, the page drops to fifth, which also means a drop in results. Keeping track of these, on top of everything else, is what makes a good affiliate manager into a great affiliate manager.”
ReferOn makes affiliate marketing campaigns more effective
ReferOn, a state-of-the-art affiliate management platform, was launched in February 2023. The company was born out of the need to address the evolving requirements in the affiliate marketing industry, which were no longer adequately met by existing platforms. “At one point, getting support and the reports we needed from these platforms just became too expensive. So, we decided to build our own solution.”
Referon was built from years of extensive experience in managing different affiliate programs and platforms, which helped build a solution that meets the affiliate marketing needs of the fast-paced iGaming industry.
The result is a data-driven affiliate platform that is based on brand-new technology and provides users with a fluid rewarding workflow and flexible reporting. Their technology is built using several third-party solutions and services that are known for their reliability – NestJS, MySQL, ClickHouse, ReactJS, Docker, and Kubernetes.
Here are the key ReferOn features that can improve affiliate marketing campaign efficiency:
Some companies and affiliate marketing networks tend to make multiple accounts on affiliate platforms with a dummy email but with the same name and payment method in order to oversee their campaigns by different parameters – affiliate managers, countries, brands, etc.
This is extremely tiresome for the users. ReferOn built an extra layer into the system that makes it easy for administrators to see how the whole company is doing, with a bird's eye view of all of the parameters of interest. It also lets affiliates have a top-level view of their company with a single login as well in which they can see all their accounts in one place, including all their earnings and payment methods.
Fluid rewarding flow
ReferOn allows users to build reward plans at different levels, whether for the whole company, a specific affiliate, or an individual tracker. This speeds up the process of creating plans and ensures greater accuracy – once again improving campaign efficiency.
ReferOn offers a single report for all activity needs. That allows the user to have all required reporting in a very simple manner, offering a “pivot table” approach, where affiliate managers and affiliates can pick and choose what groupings are needed and by what time split – total, month, or day. In addition, users can also hide data columns that aren't relevant at the moment for a more focused view.
Flexible reporting means that users can easily access different kinds of data and different levels, which allows them to make conclusions about their campaign performance more accurately. This makes it easy for users to spot inefficiencies and where the campaign is leaking money so that they can take the necessary steps to fix it.
In ReferOn, trackers are straightforward: they follow the pattern of “affiliateID_mediaitemID.” These trackers have no encryption, so users can easily extract the final digits with ease. This lets them swiftly find campaign details and statistics.
What's more, any variable can be included in the tracker. All the typical variables, such as Click ID, SubID, and pub ID have dedicated columns in reports. Any additional variables appear in the "Other" column that users can easily access whenever necessary as well.
How to sign up for ReferOn?
Although the affiliate platform space has been getting a bit crowded in recent years, ReferOn aims to stand out from the crowd with its sleek design and user-friendly features.