Happy Sunday, and happy new year to you and your family! I just arrived back in my apartment after spending the last couple weeks with my family, after not seeing them all year.
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Anyways, onto today's email, I wanted to talk about affiliate marketing, especially as it relates to DTC brands. I have gotten a good amount of requests for this topic, and after putting up a tweet thread yesterday, it became clear people wanted to learn more.
When you think about your marketing stack, a majority of your customers likely come through paid media, where you try to see a directly attributable purchase funnel, whether that's Facebook, Google, Pinterest, etc. If you're selling a set of cookware, those CPAs might become a few hundred dollars, for prospecting campaigns, but that's when affiliates can really help you out.
Side note: let's keep going with this concept of a cookware brand to keep things simple.
So if your AOV is $350, your CPA is $200 on FB, $100 on Google (blended for brand & non-brand), you will likely want to figure out a way to lower your overall CPA. That's where a channel like affiliate marketing can come in, and there are a few ways this becomes helpful.
You might be thinking when I say "Affiliate Marketing" that I am thinking about spam email lists or coupon sites/extensions like RetailMeNot or Honey... no. In fact, I can't stress enough how much of a scam Honey is for retailers. If you have not black-listed Honey from your affiliate program, or set a separate commission at 1%, I suggest you do that now.
When I talk about affiliate marketing, I mean things like influencers/creators/ambassadors with large audiences, publishers with wide reach, and listicles that rank for SEO. Obviously coupon sites and email lists can be useful, but that's not what I want to focus on; there's enough information on how to get those up and running.
Influencers/Creators/Ambassadors
There are two main ways to build an affiliate program around creators or influencers: build an ambassador program (smart way) or find bloggers/influencers/creators with an audience who will post your product, oftentimes with a flat fee and a % of sales generated.
The ambassador option is what will last you a long time. If you release a new pot or pan, a new product line, a new color, or even a new payment method like ShopPay, your ambassadors become an army of marketers for you. In exchange they likely receive a set of pots & pans themselves, and 10-20% of the sales they generate. If your AOV is $350, that might be anywhere between $35-70 PER sale they generate, and that $35-70 could be considered your CPA.
The other option is finding influencers for a one-off, in hopes that their audience converts well when they post, write or email them. In these cases, you will often have to pay a flat fee, which can range from $250 to $5k (in most cases), and then a % of the revenue generated on top. If you have trouble finding these influencers yourself, you can find platforms like RewardStyle, which work with high-end brands to promote brands through their network of creators.
Publishers with Wide Reach
The same way that influencers might charge flat fees and a % of revenue generated, most publishers with wide audiences do the same. Whether they are publishers like BuzzFeed, Refinery29 and TheSkimm, or even lesser known publishers like Babe or Digg, many will require some kind of flat fee in order to justify the social proof that comes along with it, and then a % of the revenue generated.
For example if you want a featured article on Refinery29, you could expect to pay somewhere near $50k for an article (pre-COVID rates), and then 10% of revenue generated. Because of the high cost, in most cases it's better to either find a few publishers who knock it out of the park for you, like TheSkimm, and then focus on listicles for your other affiliate-publisher marketing.
Listicles for SEO from Publishers
If you've ever searched for "The Best Cookware Set" and found yourself scrolling a list of the top 10 cookware sets reviewed by a website, those are what we're talking about.
Those are listicles generated by publishers, and updated very often to try to win the SEO-driven click. Why? For the publisher, it means traffic, for you it means finding a good cookware set, and also for the publisher, it means (maybe) 10% of what you spend. So if you buy the $350 cookware set from an SEO click, they've just made $35 for not doing anything except hosting the article.
The listicles also have great benefits for the brand. They bring incredible brand awareness to a new company, as well as social proof from the publisher. If you're near the top of the listicle, you're most likely to win most of the sales off that page, so aim for that. You also generate SEO backlinks from high domain-authority websites back to your domain. Lastly, especially with higher AOV products, seeing social proof multiple times helps a potential customer to really trust your brand.
While many brand PR teams aim for features on founders, the brand story, or feature articles on products, listicles and roundups have the ability to drive a really good amount of revenue.
One of our fashion clients this past year drove about 40% of their traffic from affiliate, but it was through round-ups on sites like ELLE, VOGUE, and other high-end sites. In addition, their Google branded search and non-brand search numbers were on fire. Why? Because Vogue did the work for them to create top-of-funnel awareness. It all works hand-in-hand.
Brand of the Week:
Three Ships was introduced to me by a friend, Craig Hunter, and when I spoke with the founders, Connie and Laura, I could tell they were onto something special.
The quality of this skincare set is incredible, and if you used it without knowing the price, you'd guess it cost as much as a Tracie Martyn skincare set for $300. I'm especially a big fan of the pineapple lip exfoliator.
Side note: all the ingredients are 100% natural.
Shop it here: ThreeShipsBeauty.com
Software/App of the Week:
If you've followed some of the smartest acquisition marketing by companies like Hubble Contacts or Keeps, you've probably seen them pioneer the concept of quizzes to personalize products and get customers through the funnel quickly.
Octane AI took that concept, and made it easy for ANYONE with a Shopify store to add quizzes to their site. You can add the app to your site via Shopify, try it for 14 days, and see if you can lower your CAC. If it works, the pricing becomes very affordable.
Try Octane AI quizzes, by clicking here.
That's all for today
Hopefully you found today's newsletter valuable. If you did, please do share it with anyone who you think might also enjoy the content.
Have an incredible week, and make sure you start 2021 by getting a proper 9 hours of sleep per night!