Gen3 Takes Over Affiliate Program in Q3, Grows Q4 Results 74% While Decreasing Costs

In late Q3, Gen3 took over the management of a home furnishing company’s affiliate program from a competing agency. With the pending holiday season quickly approaching, it was critical that we hit the ground running and be fully prepared for the surges of traffic retailers typically see in Q4. Moreover, it was important that make large strides in growing topline while simultaneously reducing affiliate dependence, lowering costs and increasing visibility on key publisher destinations.

Gen3 quickly identified gaps in the advertiser’s active publisher lineup by analyzing current program performance against relevant historical data. Once we understood which publishers were under-performing and which were not affiliated with the program at all, we then launched outreach campaigns to ensure the advertiser was maximizing all potential relationships. As a result of these efforts, by the end of Q4, the number of traffic-driving publishers had doubled compared to Q4 of the prior year, with sale active publishers up 40% within the same timeframe.

The success of these efforts also folded into another main objective of the advertiser: increase program diversity and decrease reliance on a top publisher that was driving the largest percentage of total sales. By expanding our publisher base and driving sales via new affiliate partners, the overall contribution of that publisher decreased dramatically as a percent of total, though the affiliate still was able to grow sales from a pure dollars perspective.

In addition to growing the program, Gen3 also reviewed current program payouts and identified a number cost-saving opportunities that would have little negative effect on top-line revenue. To better incentivize ongoing affiliate engagement (and to ensure that partner sites were being paid in accordance with their true value), we revised the baseline payment from a flat percentage to a tiered payout that was based on monthly publisher performance. We also reserved extra commission for publishers that were providing extra exposure, bonus placements, or those that warranted a deeper relationship.

Gen3 also saw a firm opportunity to provide channel offers that would be enticing to publishers and their audiences while being sensitive to the retailer’s margins. Through working closely with the retailer’s merchandising team, we were able to secure a regular flow of products with best-of-web pricing that strongly resonated with deal sites (a previously untapped revenue stream for the advertiser), enabling new customer acquisition as well as a halo effect that fostered customers purchasing full-priced product in addition to the discounted item that initially attracted them.

When Q4 concluded, the advertiser was thrilled with program performance, as all four aforementioned goals were achieved. Overall sales were up 74% year-over-year, affiliate dependence narrowed, cost as a percentage of marketing fell from 9.5% to 5.4%, and we had a clear blueprint for program success moving forward.

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