Awin Thoughts: The ironic value of affiliates in the growing DTC market

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Among the trends that have resonated in marketing circles over the last 18 months, the DTC or direct-to-consumer phenomenon has gained particular prominence.

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Thanks to the meteoric rise of DTC brands like Harry’s or Dollar Shave Club, an array of similar businesses have popped up in the last few years, leveraging the direct connections with individual consumers that ecommerce and digital advertising afford.

The allure of this model is easy to see. Direct connections between brands and consumers cut out the often expensive and complicated dynamics that have traditionally sat between the two.

Whether it be in selling their goods via retailers sat on high streets or in shopping malls, or in promoting those products to audiences via an increasingly opaque digital advertising supply chain, the loss of control brands suffer in terms of budgets, branding or the customer experience is a factor many are keen to minimise. Direct relationships with the consumer avoid many of these risks.

DTC brands now operate across a vast range of sectors. From beauty (Birchbox & Glossier) and clothing (Everlane), to home cooking (Blue Apron) and furniture (Burrow). The choice is rapidly increasing as consumer demand has grown.

Taking their cue from that popularity, even some legacy brands are emulating the approach.  

FMCG behemoth Procter & Gamble have experimented with the tactic for some of its skincare brands, shunning the traditional mass marketing levers of television or out-of-home, in favour of social marketing that is directed at specific and relevant niche audiences.

P&G’s CMO Marc Pritchard has made a big play out of the fact that the organisation is increasingly shifting its marketing in-house too. In retrospect, his now infamous speech from 2017, damning the digital ad system for being “murky at best, and fraudulent at worst” clearly signposted its desire to take back control.

So where do such trends leave affiliate marketing? Surely, affiliates represent exactly the kind of mediators that this vanguard eschews. Just another obstacle to a “constant connection with consumers” that brand marketers like Pritchard aspire to establish

But then again, perhaps not.

Whilst early adopters of the DTC model have successfully acquired customers and made a name for themselves independently through guerrilla marketing tactics and viral videos, that novelty factor is wearing off as the model matures.

With increasing competition arising from new DTC entrants, as well as traditional brands adopting the strategy, the volume of consumer choice in the arena has flourished.

This competition demands the need for curated mediation. Consumers require help in understanding the benefits of choosing one competing DTC brand over another. Why choose this monthly coffee bean subscription brand instead of that one? 

Affiliate businesses provide that support to consumers around the world every day. If, in researching a product, a consumer prioritises price (cashback or discount codes), ratings (comparison sites), reviews (editorial publishers), recommendations (social/blogs/content) or any variety of other distinguishing factors, affiliates help provide that information.

Affiliates also successfully straddle the very impulses that have propelled DTC to the forefront of current advertising strategy. Their diversity means they provide access to any niche audience online. The direct nature of the brand-affiliate relationship ensures control over all promotional messaging, and, this partnership is coordinated on a performance-based model that transparently ties investment to sales.

Two successful DTC brands operating in the mattress space, eve and Casper, both work with Awin’s affiliates. A variety of publishers support the marketing of their products online, and serve as an illustrative demonstration of the evolving nature of the model.    

Alanis Morissette would undoubtedly find all this incredibly ironic. The popularity of a business model that ostensibly does away with intermediaries, subsequently stimulating the need for precisely those same intermediaries to help brands distinguish themselves and connect them with the right individual customers.

Admittedly, that doesn’t quite have the same ring to it as being “like ten thousand spoons when all you need is a knife”, but the sentiment, from a marketing perspective, is not entirely dissimilar.

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