An affiliate or a partner? Is there any difference between the two? Well, that’s what we’re going to evaluate by comparing affiliate marketing with partner marketing. But no matter which term we use, both are about mutually beneficial collaboration between two parties. Either between a business and an individual marketer or sometimes between two businesses.
Distinctive features of affiliate and partner marketing
If we were to agree on a common denominator for affiliate and partner marketing, it would most likely be that the relationship is monetized by a performance-based compensation from the merchant to the partner/affiliate.
When we talk about affiliate marketing, we’re mostly referring to a compensation model where affiliates get paid for conversions. In a wider sense, affiliate marketing can also cover other CPA-based partnerships, where the merchant pays for other actions than just conversions.
Cost per action marketing (CPA) refers to a type of compensation model used in affiliate marketing. The merchant pays a commission to the affiliate when a specific action is completed. These actions can include filling out a form, bringing in leads, or watching a video, for example.
Partner marketing, on the other hand, can involve compensation that isn’t performance-based. For example, an influencer who receives a flat fee for creating a social media campaign or a promotional article for a brand. The influencer gets paid without giving any guarantee of the results. This type of collaboration would still fall into the partner marketing category.
In fact, we can go as far as define partner marketing as a wider category of business collaboration. This includes affiliate marketing, influencer marketing, co-promotion and co-creating, event sponsorship, licensing agreements, distribution partnerships etc.
In short, affiliate marketing is a subcategory of partner marketing. It can be divided further into different subtypes such as content, PPC, email, and social media -based affiliate marketing.
What about referral marketing?
Referral marketing is closely related to affiliate and partner marketing. It’s like a light version of affiliate marketing that usually occurs in the form of word of mouth marketing. It’s mostly limited to the merchant’s customers who recommend the product to friends, family, and acquaintances.
The major difference is therefore in the relationship that exists between the referrer and the referred person. In affiliate marketing, there doesn’t need to be any relationship between the two parties. And in referral marketing, one customer rarely brings more than a couple of referrals.
The scale is smaller and we’re not necessarily talking about a partnership in that sense. Even though referral marketing can be lumped in with the wider category of partner marketing.
Coupon and cashback websites
Coupon and cashback websites are partly to blame for the dent in the affiliate industry’s reputation. Together with the “get rich quick” schemes, they’ve added a negative connotation to the word “affiliate.” Some marketers could be put off from being called affiliates and opt out of joining any such program.
Now, what if all the conditions remain the same but the merchant decides to call it a partner program? Would those same people repelled by anything affiliate-related be more likely to join? Well, some merchants have tried that. But it also seems like the use of coupons, cashbacks, and other shady practices has started to decline. Many brands prefer not to use them at all. And those who offer coupons, for example, usually forbid the use of coupon keywords online. This of course means they will not partner with coupon websites that rely on those keywords.
The only value coupon and cashback sites contribute to the channel is a discount or cashback to the end customer. They’re strictly about revenue sharing without adding any real value to the channel.
Coupon and cashback websites could be grouped together with price comparison sites and considered a subcategory of affiliate marketing. As the most obvious group of last-click contributors, they’re distinct from partners who can sit almost anywhere in the funnel.
Bloggers and influencers
When does a blogger become an influencer? That’s a question that has no straightforward answer. Many content affiliates who promote affiliate products on their blog or social media are also micro- or nano-influencers. Even consultants and analysts who use a certain product and recommend it to their network can be considered influencers. The reason we call them affiliates is because they must join affiliate programs or networks to get paid for their recommendations.
Those bloggers with a larger following and traffic can get paid through other partner agreements as well. For example, a popular blogger could sell link placements or product reviews to brands. In these agreements, there’s usually no guarantee of anything. Brands are willing to pay a lump sum for the exposure and awareness. This is ideal for the blogger since it’s guaranteed money and it’s much easier than driving actual sales.
Can we then make a distinction between bloggers who get paid for conversions only and those who make other, non-performance-based partnership agreements? Not really, since influencers promote offers on a pay per conversion basis, too. And it’s not even all that clear what the difference is between an influencer, blogger, niche expert, and key opinion leader. All of them could be involved in affiliate programs and other partnerships at the same time.
Tracking and multi-touch attribution
Thanks to the advancement of tracking technology, we can now understand the full customer journey better than before. And it’s messy, to put it mildly. This has led people to question whether affiliate attribution should move beyond last click. Most conversion paths cover more than one channel or campaign. Here’s an example of a multi-channel conversion visualizer:
So, we’re dealing with multi-touch attribution, where the customer’s journey has various touchpoints. Measuring the impact of each of these touchpoints is complex. It involves plenty of trial and error with different models and relative weights.
Perhaps to make things simple, we should start calling all content-based affiliates partners. Calculating the incremental value of these partners is up to the merchant or affiliate network. And partners can always try to negotiate different agreements if they think they’re not getting fully rewarded for their contribution.
Most affiliate platforms allow some flexibility. Managing both traditional affiliates who get paid for their last click contribution and those partners who prefer flat fees can be done on one platform. Usually even without any additional tweaks.
Publishers and advertisers
If you’re familiar with the affiliate industry, you’ve certainly come across the terms publisher and advertiser. An advertiser is usually a brand who pays to have its ads displayed on different platforms and websites. A publisher is the one who displays those ads on their website or platform and gets paid when a specific action such as conversion or click occurs. A CPA or CPC network usually operates between the two and receives a commission for connecting them.
The use of these terms is therefore more limited. Often, you can hear the terms publisher and affiliate used interchangeably. Even though most affiliates are not involved with display ads and aren’t in fact publishers.
Most affiliate programs have a diverse base of affiliates who use multiple channels to drive sales. Restricting that to a publisher-advertiser relationship doesn’t seem appropriate.
In our partner program at Supermetrics, the majority of our affiliate partners are agency marketers and have nothing to do with being a publisher. Neither are we taking part in any networks or paying affiliates for displaying our ads.
That said, a publisher should be considered an affiliate subcategory, which in turn is a subcategory of a partner.
In-house affiliate programs and affiliate networks
In-house affiliates are mostly recruited by affiliate managers or they’re already loyal customers. They tend to be more selective and choose only quality products that they use themselves. In contrast, network affiliates are more revenue-focused and switch more easily between offers.
This is why especially in in-house affiliate programs, it would seem appropriate to refer to affiliates as partners. The main difference between an in-house program and network is the stronger relationship (partnership) that exists between the company and the in-house affiliate.
Discovering the most relevant partners to their brand and recruiting them is one of the key tasks of an affiliate partner manager. In our affiliate partner program at Supermetrics, most of our promising partners who bring in sales are from our personalized outreach. We touch base with them regularly and update them with the latest company news such as new launches and pricing changes.
Comparing in-house affiliates to a large affiliate publisher such as Rakuten Rewards, formerly known as Ebates, it’s fair to say there’s a wide range of players among affiliates.
While they all serve the same end purpose, they can have very little in common in how they operate. The monetization of the affiliate partnership can also be totally different. Rakuten Rewards operates on a cashback basis, which together with coupons is now on the decline.
Building partnerships with content-based affiliates such as influencers and niche experts is a better long-term strategy for brands who are not looking for quick wins only. While it seems reasonable to describe such affiliates as partners, it’s a bit of a stretch to imagine companies like Amazon or Booking.com having a relationship with any of their individual affiliates.
Due to the obvious crossover between affiliate categories and channels, perhaps the terms affiliate and partner shouldn’t be considered separate at all. Influencers, for example, might receive non-performance-based payments but they also use affiliate links that pay them commissions for conversions. Just like any other affiliate.
Each compensation model simply reflects the partner’s value to the brand. It’s up to the merchant to decide how it wants to measure and reward partner performance. Whether we call them affiliates or partners makes ultimately no difference. Third-party recommendations are such a powerful marketing channel for driving sales and brand awareness that the industry will remain alive and kicking no matter what terms we use.
About Johannes Rastas
A Partner Marketing Manager at Supermetrics, Johannes focuses on expanding the Supermetrics partner program and collaborating with their existing partners. He also works with SEO and content on a daily basis. Feel free to contact him on LinkedIn.