Here in the second half of 2022, companies are facing several well-documented economic headwinds. However, your revenue targets are probably unchanged, or if you’re lucky, tempered, but still not easy to achieve. In this environment, you need to do more than cut costs to achieve your goals. You need to make smart investments in growth, including having the best marketing and sales leaders who can quickly evolve your growth plans and do more with less. However, finding these people is harder than you might think.
Great People Solve Tough Problems
As executive coach JP Flaum once shared with Graham Weaver, the founder of Alpine Investments, “Are you going to get to your goals with B or C CEOs running your portfolio companies? If you’re not building a suite of A leaders, Graham, how would you rate yourself as a CEO?”
The same thing is true for your Marketing and Sales Leaders and their direct reports – it’s more important than ever to have strong A+ marketing and sales leaders and teams in place. The demand for this key talent is still extremely tight. The difference between good and great in Marketing and Sales is 10X.
Why do companies fail to hire the best people quickly, putting growth goals at risk?
1. It’s Still a Tight Talent Market.
With a handful of high-profile companies doing layoffs in the last few months, it’s easy to think there are more people looking for jobs like yours. It’s still tough out there – ask any in-house recruiter or hiring manager. Here’s why:
2. In-house Recruiting Teams Are Spread Too Thin
Many think that an in-house recruiter they are already paying can get the job done. As great as they may be, they still face many challenges.
3. Recruiters don’t intimately understand the Marketing and Sales functions and skills they are hiring for.
Generalist recruiters are less effective with marketing roles because marketing is changing faster than any other function in the company, people are specializing to stay more current, marketing is getting more technical and analytical yet often requires creativity, the channels and techniques that work change quickly, and even at the top, different personas have emerged.
It takes either a marketer or someone with marketing expertise to identify the best candidates for your role, but also to “pressure test” them. Marketers are good at marketing themselves, know the right buzzwords, and can talk, but they may not be hands-on, or launched new programs from scratch, or scaled existing channels and initiatives. Without this specialization and expertise, how can a recruiter go a few levels deeper to see if they were simply “in the room where it happened,” or led it and drove impact?
4. There’s a real cost in lost time, wasted effort, and delayed impact on the business.
Whether you are trying to fill a role with in-house and/or contingency recruiters, or even generalist retained firms, all of the above applies – with painful consequences:
RevelOne was created by Marketers to solve exactly these problems.
We put a three-person team on every search. The recruiter leading your search only does 5 to 6 searches at any time. You benefit from us knowing and being able to reach a massive network of 130,000+ marketing and salespeople. We understand and help you refine your requirements, then identify the 100 to 300 best candidates for your role, and then we get in touch with them and present your opportunity to these almost always passive candidates. We pressure-test them so you only spend time interviewing the best candidates and end up hiring a great person quickly.
We can pierce through all of the issues above – the tight talent market and all of those challenges faced by in-house recruiters. The result? We’re still successfully closing out searches in 3 months on average and a third of the time in 5 to 8 weeks.
If you’re a VC or PE-backed tech company needing to hire great marketing and sales talent – contact us and one of our co-founders or VPs would be glad to help.
As former CMOs, we know the first 100 days are critical for any marketing leader in a new role, especially at high-growth tech companies. Whether they are the marketing executive running the whole department or in charge of an important part of the marketing function, senior executives expect them to make an impact quickly. However, obstacles and challenges will inevitably stand in their way, and create risk.
To help our newly-placed marketing leaders address their challenges, hit their goals, and execute quickly, we created the RevelUp Success Program, now fully integrated with RevelOne’s executive search services.
We’d like to share what we’ve learned from over 150 marketing leaders who’ve benefited from this program – to help other hiring managers and new hires anticipate these challenges and address them head-on.
Below, we share the 10 most common challenges faced by newly-placed marketing leaders.
Challenge #1: Building their team quickly
CMOs and senior-level marketing leaders are often expected to uplevel executional sophistication, expand into new channels and growth strategies, and evaluate and grow their team. In all these cases, hiring manager or director-level talent to develop and execute against immediate initiatives, and supplement talent or resource gaps become a new marketing leader’s priority. But, finding experienced, top-tier talent (particularly in a hot, candidates’ market) is a significant challenge while also executing your marketing plan. It can take months of calendar time to find and hire the right people, even when leveraging their own networks. Sound org design, effective role scoping, and an efficient search process are critical to addressing this challenge quickly.
Challenge #2: Managing expectations
Newly placed marketing leaders – particularly those in newly-created senior roles – are expected to have a significant impact on the trajectory of an already fast-growing startup. Managing these high expectations is challenging to do while also learning the company and its people, establishing trust in their own ability, showing progress, and persistently tackling resource challenges. Per the first challenge, new marketing leaders often don’t yet have the team to deliver on these expectations, they may not have the tech stack to efficiently build upon, or the data insights to inform decisions. Also, most new growth strategies just take time to develop, execute and gain traction. Marketers need effective expectation management strategies and strong relationships with their leadership team in order to address this challenge.
Challenge #3: Lack of Resources
New marketing leaders often face other resource constraints like lack of HR/talent support in hiring (or even getting approval for headcount), lack of internal resource support like developers, engineers, and data scientists, or budget for technology, media/advertising, and agencies. This challenge, in large part, drives the need to manage expectations (#2 above). Marketers in new roles must effectively evaluate and prioritize these resource requirements, adopt scrappy out-of-the-box execution methods, and just get the job done while securing these resources. The right experience, strategy, and network support are extremely helpful.
Challenge #4: New to an Industry or Target Customer
Every newly-placed marketing leader brings with them experience, skills, and abilities that will help them succeed. But when they are entering an industry that is new to them, or marketing to a target customer segment they have never marketed to before, the learning curve can be steep. For example, if a marketing leader has never had to abide by healthcare advertising restrictions or has never marketed to young adults under 17, they must somehow get up to speed quickly or risk making mistakes that can be costly. Through our RevelUp Success Program, we help these new hires uplevel their knowledge in these areas quickly with the right network and resources to tap into.
Challenge #5: Limited data and analytics
Even at an advanced public company, data and analytics are likely to be far from perfect. At high-growth VC/PE-backed companies, marketers often inherit limited business intelligence (BI) and analytics resources, incomplete customer data, and a sparse tech stack. As marketing becomes ever more data-driven, the right data and customer tracking are critical for insights and decision-making. But, it doesn’t make sense for most companies to jump right into multi-million dollar tech stacks and full BI teams to support marketing. There is an art to “rightsizing,” then building out the data science – it’s critical to evaluate your immediate and most impactful insight requirements, identify the most critical resources needed, find the right tech and vendor partners, and implement the optimal roadmap.
Challenge #6: Lack of processes and organization
Early-stage startups need to constantly try new things, pivot quickly, and not be afraid to take chances or lean into change – this is an environment where order and process can sometimes slow things down. However, once they start to gain traction, understand their customer, and discover the most important growth levers, they need to focus on what’s working and build a reliable foundation that can take them through the next 3-5 years of growth. This inflection point is where marketing leaders need to harness what may feel like organized chaos into an agile process and organization that can enable a business to scale. This entails the monumental challenge of changing long-standing behavior, which requires a strategic, insightful, and cross-functional approach.
Challenge #7: Showing impact quickly
Marketing leaders in a new role are expected to deliver results – quickly – or risk losing credibility and future support. Some leaders can deliver at least an initial impact with minimal difficulty, which is why this falls in the second half of our list. For those facing several of the above or below challenges, however, this becomes more difficult. Regardless, marketing leaders can’t fly underneath the radar as they are the single point of accountability for marketing (or their function) and are expected to show how their efforts impact key business KPIs. They need to develop a strategic and effective plan that will allow them to navigate and address challenges, delivering “quick wins” while spinning up initiatives and laying the foundation that will drive medium to long-term impact. Leaders that do this well, leverage relationships with freelancers, agencies, martech vendors, and expert advisers from their network to plan and execute.
Challenge #8: Changing internal thinking and direction
New marketing leaders are often brought in to be a ‘change agent’. This could be expanding your target market and rethinking your product strategy or GTM positioning, changing the brand strategy to compete in an increasingly saturated market, or changing the culture. Since high-growth businesses have already done well with the approach they’ve been taking, many employees – and even leadership – can be resistant to the idea of substantial ‘change’ even if it is now required to get to the next level of growth. Three-quarters of CMOs and marketing leaders consider driving substantial change in an organization one of their biggest challenges. When this is a core requirement, it is critical for a hiring manager and newly placed marketing leader to make sure they have the right united approach to inspire leadership, cross-functional teams, and the marketing org to ‘change’.
Challenge #9: New to leadership in general
For new managers and superstar ICs stepping into their first leadership position, it can be daunting to manage people, serve on the executive team, and juggle increased responsibility – not to mention accountability – often for the first time. As head of marketing or an important marketing function, they are also expected to shift from mid-level execution experts (with which they are comfortable) to strategic leaders who can still somehow get the execution done. The right internal relationships, outside networks, and mentor support are important to help them navigate this new terrain.
Challenge #10: Launching and testing new channels
While almost every marketing leader in a new role faces this challenge, it falls at the end of our list because good marketing leaders excel at channel expansion, and most have a certain comfort level when addressing it. But no marketer is an expert in every marketing channel – consider PR, social, SEM, partnerships, and influencer marketing as a few examples. Access to the right information – in order to choose the right testing strategy or the right partner to execute – can result in saved budget, precious calendar time, and greater impact.
Anticipating these challenges is critical.
The RevelUp Success Program is included in all of our executive searches and supports our newly placed marketing leaders in just this way, however, if you or your new marketing leader is struggling with any of the above challenges, please contact us directly, and we would be happy to help.
About RevelOne
RevelOne is a leading marketing advisory and recruiting firm. We do 300+ searches a year in Marketing and Go-to-Market roles from C-level on down for some of the most recognized names in tech. For custom org design, role scoping, and retained search, contact us.
For B2B SaaS companies with self-serve, product-led, or marketing-led go-to-market (GTM) motions, marketing strategies and channels play an even more significant role as compared to Enterprise B2B offerings that are more sales-driven. At RevelOne, we place hundreds of marketers every year at some of the fastest-growing companies in the country and we see first-hand the best marketing org designs that drive growth. You can explore our B2B SaaS Org Chart, to view a snapshot of the most frequently used org design in well-developed B2B SaaS companies. But each product and organization is different, so in this article, we lay out five key considerations to think about when designing your own company’s specific marketing org structure.
1. Some business models may require investing more, and earlier, in Product Marketing
If your product has high complexity, multiple product tiers, or is sold from the start to distinct customer segments, it likely requires greater investment in product marketing. With more variance in needs across customer segments, a Product Marketer can help connect the value of the product to each of these segments, identifying key target personas, each of their unique pain points, and how your product solves them. This can include developing selling points against alternatives and your competition. For instance, in its B2B SaaS motion, Grammarly sells its AI-driven writing assistant to corporations, educational institutions, and government customers, each of which has very different needs and buying processes. Their product marketing team has specialists aligned against each of these segments who develop targeted messaging and value propositions that are used in both marketing channels and by the sales teams as they follow up.
Product Marketing is also more important if you are creating a new category where more effort and granularity are needed on education around the product and value proposition and messaging on how it solves pain points. This also ties to a greater need for PR and corporate branding (see more on that below), and product marketing then works in concert with those efforts to more directly support GTM efforts.
2. The “virality” of your product may mean a more substantial focus on growth marketing
Some products have viral features that organically sell themselves because collaboration or sharing is core to their use and drives adoption across shared users and groups. For example, Slack is one of the fastest-growing SaaS companies because the product’s natural virality allowed the tool to spread from one advocate to a team, small teams to ancillary teams, across large enterprises, and between companies. This “viral” or “product-led” growth suggests that growth marketing may be a greater part of your marketing motion and calls for growth marketers, and even cross-functional UX or engineering resources, to be added to your team.
Growth marketers come in many shapes and sizes. For viral B2B SaaS products, a growth marketer that will integrate growth tactics and strategies with product enhancements and features will have the most impact. Their focus is on finding incremental customer and revenue opportunities through product-led changes and product-level optimization, so for a naturally viral product, this can be key to driving new customers at scale.
A B2B SaaS company with a product that has network effects is best served by hiring this growth marketer earlier and integrating them into the team. In fact, it should be one of the first marketing hires. That’s because once a growth marketing strategy kicks in, virality will organically add new customers at a brisk pace.
3. When creating a new category consider investing more in PR/communications and content marketing
Companies entering or creating a new category, have their work cut out for them as they seek to define the category and their place within it, educate consumers, and raise awareness. In addition to investing in product marketing, consider scaling your communications and content market teams as well.
Disruptive, earlier stage startups pioneering a new category are faced with the challenge of having to educate people about a new solution, how it solves their problems, and gain attention for something they’ve never heard of. These companies will have to invest in ongoing educational efforts like blogs, articles, whitepapers, and newsletters, as well as awareness efforts like media and press coverage and analyst relations. For companies in more established categories, content can fall under the Head of Acquisition/Growth, but for category pioneers, it can be more effective to have these marketers report to a Head of Comms/PR earlier on so they can work in unison. An example is e-commerce platform CommerceIQ, which helps major brands manage their activities on third-party services like Amazon and Instacart. Those platforms are relatively new among distribution channels and it’s only in the last few years that they reached the scale and complexity to require a separate platform to manage them. For these big brands, the pain point now exists, but PR, comms, and content marketing are needed to build on the narrative of this need and articulate how there is a new category of SaaS software to address it.
For companies entering or creating a new category, investing heavier in content will also take pressure off your product marketer so they focus on staying close to the market and developing customer insights – rather than writing content.
4. For companies in well-established categories, consider investing more in paid marketing support
In “bottoms up” B2B SaaS businesses, self-service sales is the major revenue driver – so marketing typically drives sales. In contrast to the examples above, if companies are in established categories, customers already know and are looking for solutions like yours, and there is already a breadth and depth of conversation on the subject. Therefore, focusing on paid marketing channels where you can intercept and capture existing demand and interest is a common approach to quickly gobble up market share.
Whether you utilize channels like Linkedin and Google to target defined prospect segments, engage with prospects while they are consuming content related to your product or category, or capture demand of prospects searching for solutions like yours on search engines, paid marketing strategies are a great way to capitalize on the intrinsic demand already available within established categories.
A paid marketing leader will likely be your first investment in this case. Channel managers will be your next investment both to support your leader and test into new channels, but then serve as single-channel experts to lend the needed channel-specific expertise and focus to take it to a more sophisticated level and drive scale.
5. Some companies may start out with BDRs in the Marketing Org while GTM motions are still being refined
Earlier stage, marketing-driven B2B SaaS companies with upsell opportunities, high-priced premium offerings, or customer segments they are still trying to identify and refine, sometimes start with their business development representative (BDR) group within the marketing organization. The same is true for customer success when there is the opportunity to arm CS managers with talking points to upsell or sell a premium tier of your product.
For these earlier stage companies, there is often not yet a Head of Sales to manage these efforts, or the company is still trying to figure out which customer segments are their most relevant and which product features or selling approaches are most effective. By homing BDRs within marketing, product marketing and marketing leadership can quickly learn, iterate, and roll out alternative GTM motions.
Some companies want to test BDRs as a cold outreach prospecting tactic. Similar to sending out an email blast, high-volume cold calling can also be managed by marketing while still in the testing phase.
Every business is different and has its own nuances around customer segments, product offerings, and market maturity. Our B2B SaaS Marketing Org Chart is a great tool to start with as you embark on building out your marketing org, and the above 5 key considerations are a good way to think about how it should be customized for your unique company and growth needs. If you still have questions or are looking for more support, however, feel free to contact us directly for custom org design advice.
About RevelOne
RevelOne is a leading marketing advisory and recruiting firm. We do 300+ searches a year in Marketing and Go-to-Market roles from C-level on down for some of the most recognized names in tech. For custom org design, role scoping, and retained search, contact us.
If you are a Founder, CEO, or Marketing leader of a B2C e-commerce company, after making your first 3-5 marketing hires and as the business scales, you’ll need to expand the team. This is the perfect time to think through the design of a marketing organization that’s tailored to your business.
Designing the right marketing org requires careful consideration of not just the business’s needs today, but what will be needed in 12-18 months. It takes time to find the right marketers, based on both their specialties and fit with the company’s business model and life stage, so you need to make sure to plan ahead.
At RevelOne, we have placed over 1,000 marketers at some of the fastest-growing companies in the country. We’ve seen some of the most successful models and advised on the best org designs to drive growth.
There is no one “standard” marketing org chart, but there are some common structures used in the most successful companies. The RevelOne Marketing Org Chart for B2C E-Commerce represents a snapshot of frequently used org design in a well-developed e-commerce business. While not the exact model for everyone, it can be a useful baseline or starting point.
But, organizing your department(s) is as much an art as a science, and there are special considerations to keep in mind as you finalize an org design that’s right for you. Below we share five top considerations to think about when designing a marketing organization and building out the team.
1. Companies are increasingly Splitting Apart Creative/Brand and Growth Responsibilities Resulting in 2 Marketing Leaders
It can be tempting to try to find a single leader that excels at both the creative/brand and growth elements of marketing. These rare dual-skilled leaders can be challenging to find. Instead, we have seen many companies successfully split these responsibilities into two distinct leadership roles, each reporting directly to the CEO, president, or co-founder. In this instance, you’d have a Brand leader who’s in charge of messaging, positioning, content, PR/communications, visual identity, and all things creative. And, you’d hire a Growth leader who leads acquisition and retention, tasked with the responsibility of driving revenue by acquiring customers and improving repeat business and loyalty. The level of these roles typically ranges from Senior Director/“Head of” to VP/executive level, depending on the stage of the company and level of experience required.
When the roles exist separately, however, it can be easy for the two teams to operate out of sync. For example, the analytical, performance marketing strategy that’s focused on short-term metrics might deviate from the long-term brand strategy, or the brand team may not be incorporating quantitative learnings from the performance team into its overall understanding of the customer. They can compete for budget or resources, too. Separating the two areas of focus under unique leaders means a CEO or Co-founder will need to devote more time to contention management between the two and will have more direct reports to manage.
2. Separating E-Commerce From Marketing Altogether Can Benefit Product Focused Companies
Often the Director of E-commerce (sometimes called the Director of Product) will fall under the purview of Marketing and answer to the CMO/VP of Marketing. We’ve seen companies with more complex products and buying experiences spin the e-commerce team out of marketing altogether so that it can be managed and optimized independently. In this situation, marketing will focus on awareness, driving traffic, new customers, and retention, while onsite functionality, product merchandising, user experience, and revenue will be managed by a separate e-commerce leader.
We see this most often when the selling experience is more technically complex, or when the site itself functions as the product. In order to then develop an optimal, efficient and effective user experience, an E-commerce or Product leader who specializes in these more complex areas is often the best solution. When pulling E-commerce out of Marketing, however, extra effort will be required to ensure that the visions of your Marketing and E-commerce leaders are well aligned.
In a traditional e-commerce business that sells physical SKUs like apparel or shoes, including your e-commerce team under your overall marketing umbrella may make sense. A relatively straightforward shopping flow getting merchandise into shopping carts may involve more off-the-shelf e-commerce tools that require less technical product sophistication. This model enables a single leader (CMO or VP of Marketing) to have a view and vision over the entire customer journey as well as remain responsible for all things revenue.
3. Breaking Out Analytics into an Independent Department Can Drive Greater Impact
Depending on your e-commerce business, you might be best served by breaking out analytics into its own independent group. Having analytics under the marketing umbrella allows marketing to develop integrated and focused marketing-specific analytics, but it won’t provide an “outside” perspective as it lives within the marketing team. Breaking out analytics so that it operates independently can put the analytics department in a position to serve the entire business (e.g., product/e-commerce, finance) and has the added benefit of providing a more objective audit on marketing spend. They will be able to view marketing’s impact on the larger business as well as provide larger business intelligence that can inform both organization-level strategy and marketing direction.
When operating an independent analytics department you’ll have to make sure that all marketing groups, including performance, brand, and e-commerce are working with analytics using the same data, dashboards, metrics, insights, and interpreting all of this information consistently. Failing to do so will see individual teams coming to the table with different ideas and initiatives on how to use resources that will be in conflict with the other teams’ strategies and initiatives.
4. When to Hire for Brand Strategy Often Correlates to Company Growth Stage
It’s common for brand to be owned by founders early in their growth cycle of a company. After all, in the launch and early growth stages of a company, it’s the founders who are closest to understanding the market, seeing a customer need, and creating a new story, product, and brand to meet it. They become heavily invested in how their product is shaped, presented, and perceived and it’s common for those founders to hold on to these brand responsibilities even after the company has meaningfully expanded. This happens most in brand-forward e-commerce companies where the company’s success and the brand story are deeply intertwined. In these cases, the founder may continue to be the owner of the brand strategy and creative, while hiring mid-level brand managers to help with execution and programs.
When a company reaches a more advanced growth stage, however, its audience often evolves, and growth begins to happen in new markets and through new channels. In these cases, brand strategy should evolve with it. In addition, a founder’s focus at this stage will naturally expand to a much larger and broader set of responsibilities, so they may not be able to give an evolving ‘brand’ the attention and energy that it needs. At this point, there is value in hiring a Director or VP of Brand to take over both strategy and execution. This will allow the founders to focus on other concerns, while also providing a new and fresh approach to brand strategy and execution from a leader who specializes in it. Like with many activities in a company as it scales, there’s value in more structure and process at this point as well.
5. Competitors, Budget, and Growth Strategy Can Indicate How Many to Hire
Every Founder or CEO wonders whether their company is under or over-investing in marketing spend, and marketing talent. As the company grows, it’s a challenge to determine when, and how large to scale your marketing team. There’s no single answer or formula here, so a natural reference point is looking at peer companies in similar markets and growth phases. We’d also suggest three broad drivers that may influence the scale and type of resources you need.
First, if you are creating a new category, you may need a bigger budget to drive awareness, educate consumers and generate demand, as well as more marketing talent to create and manage it. Another scenario is when your product is particularly complex or a high-consideration purchase. This requires more investment to move customers through a longer purchase funnel, and the marketing talent to create the materials and the media needed to do it.
Second, as a general rule, you should not spend more on headcount than you do on media or than you are driving in revenue. The size of your department should grow with the size of your budgets, the success of your business, and new hires should always align with strategic initiatives. Key initiatives we see marketing leaders hire for most often include: expanding or scaling new channels (see our article here for 4 ways to resource the testing of new channels), driving greater efficiency from media spend, increasing conversion rates throughout the sales funnel (also driving down customer acquisition costs), building the brand to drive awareness and/or support other acquisition efforts, or enhancing foundational capabilities (e.g., analytics) that power the growth of the business.
Finally, there are certain types of businesses and offerings that are naturally more social or viral and rely more heavily on product-led growth. These require a more sophisticated, multi-disciplinary team made up of product, marketing, analytics, design, and engineering to develop and deploy a blend of product features, marketing, and growth hacking approaches to test and discover continued growth opportunities. It’s important to note that in early to mid-stage startups where this may make sense to invest in, the fully-loaded costs of these multi-disciplinary growth teams could exceed early media budgets, and so should be carefully considered.
Every business is unique, so every founder, CEO, and Marketing leader will need to decide how best to structure their marketing team to drive revenue for their business. We’ve created our free E-commerce Marketing Org Chart to get you started, and included these and other considerations you can use in your org design.
About RevelOne
RevelOne is a leading marketing advisory and recruiting firm. We do 300+ searches a year in Marketing and Go-to-Market roles from C-level on down for some of the most recognized names in tech. For custom org design, role scoping, and retained search, contact us.
As Facebook and Google advertising costs continue to rise, marketers are looking for additional cost-effective and ROI-consistent channels. Affiliate marketing has become one of those key channels, offering excellent results for fast-growing B2C and B2B tech companies. With an ever-changing ecosystem of small and large influencers, content leaders, and media outlets, a single channel that can span all these opportunities is enticing and powerful.
It’s best to consider Affiliate marketing once you have found product-market fit and your margins are clearly defined and predictable. In this guide to Affiliate marketing, we’ve put together the important insights every marketing leader needs to know before deciding to pilot an affiliate program. We include what media and advertising opportunities an Affiliate program might entail, what you need in order to test this channel, how programs typically function, and the networks, technology platforms, and agencies that will help you be most successful. We’ve tapped our own expertise as marketing operators and our insights working with the top marketers in tech to create this Marketers Guide to Affiliate marketing.
Traditionally, Affiliate marketing consisted of transactional affiliate marketplaces and management platforms that served as a single source for publishers (typically content and coupon sites) to easily connect with advertisers. These platforms make it easy to establish business relationships, share creative assets, track revenue and even handle payouts between the publisher and the advertiser. Two major platforms that are still highly used today include Rakuten and CJ. Today, Affiliate marketing is more broadly and holistically defined as any kind of partnership that can deliver a sizable audience to drive new prospects or new or repeat customers on a pay-for-performance model.
Affiliate partnerships exist in a wide range of categories including content creators, online and offline mass media publishers (e.g. Forbes, CNN, NBC Universal), influencers (large and small), loyalty sites, coupon and deal sites, podcasts, review sites, shopping sites, benefits/rewards/loyalty providers, mobile apps, other brands/companies, registries, referral programs, search affiliates, business development deals, and even online learning platforms and schools.
An effective and profitable affiliate program can consist of 10 of these partners or 10,000. And, while categories of partners may differ, one thing they all have in common is a pay-for-performance model. You can structure these models in many ways — like paying for new vs. returning customers, paying flat rates per lead or customer or a percentage of sales, utilizing sliding scales meant to incentivize volume, and even a custom, tailored rate decided on for each specific affiliate site.
B2C ecommerce brands have led the charge in traditional Affiliate marketing, offering an easy way for publishers and content creators to monetize their audiences with appealing creative options. B2C brands also tend to offer a clear, measurable, and predictable revenue model paying publishers a percentage or flat fee for every product that is purchased as part of the affiliate deal.
But Affiliate isn’t just for B2C. Its coverage across review sites, mass media, and niche publications make it a worthwhile investment for B2B brands as well. Affiliate marketing can also benefit B2B businesses because partnerships can include other B2B businesses who may share the same target audience, but be ancillary (and non-competitive). Or, they can even include business development-type partnerships with industry thought leaders who command sizeable audiences that also match a B2B company’s target customer profile.
Even PR firms are starting to utilize Affiliate marketing. Because of Affiliate marketing’s mass media publisher partnerships, PR firms are now using it as a shortcut, or a supplemental channel for their traditional PR efforts.
A new affiliate program can often take 6–12 months to start seeing meaningful results, so it’s not a channel that can be tested quickly. Companies need to ensure they have an already-established acquisition program in place so the Affiliate campaign can be given the time it needs to prove itself and then grow. But patience can pay off – the affiliate channel often becomes a major contribution to growth for many companies.
Affiliate programs take time to test for two reasons. First, for certain types of partnerships like influencer relationships or niche blog/podcast partnerships, it takes time to identify partners and to engage and develop a relationship with them. Plus, defining a framework and getting a partnership up and running is no easy task. Second, even for turnkey partners, there is a ramp-up period in which new advertisers compete with legacy advertisers (whose products are already proven to drive revenue for the partner) for placement or priority across an affiliate’s assets. In these cases, new advertisers are not prioritized until they prove themselves to be lucrative for an affiliate in a revenue share model.
Understanding the nuance of your company’s acquisition economics is also critical to the success of affiliate marketing as it is based on pay-for-performance models. It’s important to know your lifetime value (LTV) contribution margins and the maximum Customer Acquisition Cost (CAC) you can afford. And, that CAC needs to include not just the payout to affiliates, but also technology fees, publisher fees, and perhaps agency fees as well. Getting this wrong and having to reduce your payouts can demotivate or even burn bridges with early affiliates.
Affiliate marketing started with affiliate networks. These transactional networks serve as a marketplace for advertisers and publishers (typically deal/coupon and content platforms) and a transactional platform for managing affiliate signup, communication, reporting, and payouts. Partnerships tend to be hands-off, large in number, and publishers will typically be signed up with your competitors as well. The biggest networks include:
These platforms are less transactional and more robust than traditional networks and aim to provide personalized, yet easy-to-use experiences across media management, affiliate signup, communications, analytics, and payment. They are best for companies sourcing their own affiliates, developing more meaningful direct relationships, or for their agencies who may be doing this for them. These platforms also provide built-in marketplaces for finding new affiliates. Leaders in the space include:
An affiliate agency provides the manpower, already-established relationships, and expertise that most companies don’t already have in order to make this channel successful. Experienced, in-house, affiliate talent has become limited as the younger generation of marketers chooses to specialize in other channels. Often to their detriment, many companies assign a junior marketer to test or manage this channel but are underestimating the time, expertise, and experience needed to engage, nurture, and design a mutually profitable relationship with various types of partners. Agencies are tool agnostic and the leader in this space is Acceleration Partners.
Affiliates can become a highly impactful channel for any type of business. While it takes time and some investment to prove this channel, Affiliate marketing’s pay-for-performance model with a more predictable ROI makes it a relatively efficient, low-risk channel. Our article on determining the best way to source resources and talent to manage new channels can also help you navigate execution.
For marketing leaders looking for more information on Affiliate marketing, or other resources on which marketing channels you should be adding to your arsenal, check out our other articles below or contact us at marketingteam@revel-one.com and we will be happy to help.
RevelOne is a leading marketing advisory and recruiting firm. We do 300+ searches a year in Marketing and Go-to-Market roles from C-level on down for some of the most recognized names in tech. For custom org design, role scoping, and retained search, contact us.
