Can Affiliate Marketing Bridge the AI Gap?

Affiliate marketing is in a state of flux – threatened by AI, bots and Google ads. Now is the time for the industry to work together and share information, writes Paul Skeldon

Affiliate marketing is changing. Where once it was an add on, it soon became a key part of how to market Value Added Services (VAS). As its popularity grew, so too did the fraud and hijacking and, almost inevitably, it is now starting to wane.

However, this doesn’t spell the end of affiliate marketing: it still has a key role to play, it just needs to be run differently – the industry needs to talk.

The challenges facing affiliate marketing are myriad. “The challenge from AI [artificial intelligence]and bots are lowering pay-out rates, big media companies are looking elsewhere for revenue and fraud is still an issue,” says Muhammed I Fareed, Head Of Carrier & Business Development, at MessageCloud.

According to Fareed and many others in the affiliate and VAS markets, there is a growing disconnect between affiliate networks, advertisers and VAS providers.

“We’ve tried to do more with reporting tools to help share data and knowledge,” says Fareed. “It is crucial that the whole value chain share information – and we need a body to help achieve this.”

James McAteer, CEO, at Cosmik agrees. “I think even the name ‘affiliate’ fills people with fear. There is a lot of distance between networks too. There will always be a rogue that slips through – but if we share and publicise that information then the industry can shut down those rogues faster.”

Both McAteer and Fareed join a growing number of voices across marketing, affiliate, publishers and VAS providers calling for an independent body so that no one player has to share that data themselves, but can anonymously share it with such as body and it can help spread the word.

“We have seen whole countries disappear and it’s such a complex food chain of operator, service provider, VAS, publishers and affiliates that there is an inevitable disconnect in information – it is about time that this trend was reversed and information starts to be fed back up the value chain so that problems can be identified quickly and dealt with,” says Jason Kilby, Founder and CRO, Aragon Advertising.

“As an affiliate network we do all sorts of checks, pre-checks and process checks on an ongoing basis, but I don’t think much of that information goes back up the value chain,” he says.

Next steps

Kilby is keen to get a body that can help handle this flow of information up and running to give affiliate marketing a new boost. Having spent a lot of time in talks with affiliate networks, MNOs, aggregators and services providers, he wants to try and get such an independent body up and running by World Telemedia Marbella on 7-9 October 2019.

“We want to open up countries not just keep them closed and sharing information is going to make this happen,” he says.

However, while there is an argument to clean up affiliate marketing through this sharing of information, there is another threat to it that is harder to tackle: Google.

“Affiliate traffic is dropping as Google ad traffic grows,” says Toby Padgham, Co-Founder & Director, MCP. “Google can effectively scan out 98% of bad traffic and block ads and, because it works so well, Google ad traffic has consolidated and grown.”

But Google sees things differently, keen to be part of the whole burgeoning world of VAS advertising, rather than being seen as an affiliate-killer.

“The industry is changing,” says Josep Maria Avila, Business Development Manager, at Google. “I think that the industry needs to change to be more customer-centric and that is what Google is offering. Users are changing – they are researching more, even for the smallest purchases, they are more demanding and want it to be personal and the want it instantly. mVAS has to recognise that. What is the value-add? The industry really needs to understand that.”

Avila believes that Google needs to help mVAS providers change. “We need to help them focus more on their customers and to develop more of what we call ‘life time value’,” he says. “We want to help them develop their business and grow, we want them to focus on long-term goals and that is what Google can do to help.”

So, with the affiliate industry again in a state of flux, could Google’s view be the one that changes everything – and does that mean the death of affiliate marketing? It’s unlikely, but Google advertising is certainly changing things. Developing an industry wide body to feed information up and down the affiliate food chain is more important now than ever – not least to rise to the challenge set by Google.