Why the smartest brands are investing in affiliate marketing

Speaker A: I love the Charlie Munger comment. Show me the incentive and I'll show you the outcome.

Speaker B: If you have the right inputs for the affiliate program, including that in something like a marketing mix model makes a ton of sense that to get nearly

Speaker A: a 50% increase on the core North Star metric, where the data tells a

Speaker B: story that's gotta be told.

Speaker A: It's the art and the science getting the numbers right.

Speaker B: Brandformance. Uh, hey everyone and welcome to another episode of Brandformance. Today is another live session replay with Ty DeGranche, who's the CEO of Roundbar Labs and he has specialized in performance marketing, but more specifically affiliate marketing. Across ebay, Amazon and Commission Junction. Tai has personally built and scaled partner programs for companies like Atlassian Grammarly, Remote, oculus and even TikTok, generating more than $500 million in attributed revenue for those clients. So I'm super excited about this. A lot of things to learn in affiliate marketing. Let's dive in. Welcome everybody to these office hours with Paramarch. So every month we try and do one of these with somebody who is a, uh, known quantity in their space. And so I'm excited to welcome Ty degrange. Did I pronounce that correctly? Ty, did I get your last name correct?

Speaker A: Nailed it.

Speaker B: All right. Ty and I have gotten to know each other over the last year or two I think and we've talked a lot about affiliate measuring affiliate. It's not always easy. And so today's conversation is going to be about sort of affiliate in general and that channel and what is its place in the modern sort of media mix, how some top brands are leveraging it to drive growth. We'll talk about all the measurement challenges. It's like I said, not easy. And uh, if you have any questions, please put them in the Q and A box, uh, or the chat and we will kick it off. So tell me Ty, do you want to add a quick intro on yourself and then we'll jump in?

Speaker A: Thank you so much Pranav. It's awesome to be here. Thanks for having me. It's been a pleasure to get to know you over the years and obviously love what you're doing with all things measurement. M and Paramark PI to Grange, CEO and founder of Round Barn Labs. We are one of the leading partner marketing agencies out there. I've been in the business for just over 20 years. I was fortunate to work with places like Commission Junction, some of the first ad networks. So we've had a multi channel marketing background but really where I'm deepest at is in the partner affiliate marketing world and had the pleasure to help ebay with their partner marketing program, which was one of the more sophisticated ones, uh, many, many years ago and still today got the pleasure to work with the StubHub program in my early days of my career and grow that one significantly. And we've had the pleasure to just build some really, really exciting quality programs as a team, from Atlassian. Atlassian to Oculus to TikTok. So that's our background and my background a bit.

Speaker B: Wait, hang on. So you worked with Oculus? That's interesting. And even TikTok. What did that look like?

Speaker A: Yeah, those are, those are past ones which are really fascinating. So I think we were working with Oculus for about three years. We essentially had kind of almost like a hybrid piece where it was nearly embedded. I mean it was a very in depth program that had launched, but we really took it to a whole new level, essentially tripling Oculus. We also promoted their portal device, which is no longer a focus of theirs, which is just kind of a trivia. But, but it was so fun working closely with that team. A lot of just people deep in ad tech and performance experience, a lot of analytical rigor, a lot of smart people going onto their campus quite a bit and really being. Serving as an extension of their team. It was great to see and just a phenomenal experience seeing that, that grow and build. It's been. It was a lot of fun. TikTok was similar where we got to. We massively improved their performance of recruitment and just bringing on new partners and team, just thinking about quality and content as opposed to kind of the typical out of the box affiliate plays. It was, it was a lot of fun.

Speaker B: Awesome. Okay, so we have a packed agenda. We're going to start by talking about the why now of affiliate. And I know you have some strong points of views on that. We'll talk about incentivization, we'll talk about what it looks like when it's right. I know you have a couple of examples here, a little bit about tracking and measurement and then, you know, Q and A and misconceptions that people have about affiliates. So I, I'll kick it over to you and yeah, tell us about why now. Why. Why is this top of mind for, for, for everybody?

Speaker A: Yeah, it's kind of wild looking through a lot of data and, and some of the historicals. I, I was a, you know, armchair historian in, you know, college and high school. I enjoy that world. Probably nerd, uh, out a bit too much on it. Sometimes. But if you look at the landscape, it's. Unfortunately we live in a bit of a trust gap, right? If you think about from government to media to M marketing to business to how people perceive CEOs and leaders, uh, sadly, uh, many times the trust isn't what it used to be. You know, Edelman and other data sources talk about this trust, how it's evolved over time and where there is a lot of lack of trust in terms of messaging, in terms of policy. And so you know, as a result of that there's this confluence of events. You have so much access to technology, so much reliance on peer discovery, so much digital self serve ability for people on the consumer and the side to really understand and evaluate any kind of marketing solution, any kind of consumer solution before they even get in a call, before they even land on the website. So that trust gap we're finding, the hypotheses is that there's certainly an opportunity for partners to step into that. Obviously ads exist, they're, they're important, they're needed, they're part of the playbook. But how do you start to think about introducing something that complements the ads and perhaps enlists other trusted third parties, other authentic other relevant part parties to say, hey, here's why you need to think about this particular consumer brand, this particular SaaS brand differently. And so our thesis is that a partnerships, partner marketing, affiliate, influencer done the right way can really bridge the gap and fill this trust gap a little bit.

Speaker B: Okay, this is an interesting point and let me, let me push back against, I hope you don't mind, it's going to be a spicy take.

Speaker A: No, but that's what it's all about.

Speaker B: There's also this perception on the affiliate stuff is like, it's obviously, you know, the words pay for play will get thrown around, right? Like do you feel that, you know, and maybe help me also understand like how do you think about the affiliate ecosystem? Like you mentioned a few things, you mentioned influencer in affiliate, was that by design? Like do you think that those two things are the same? Are they different? Because some people manage influencer completely different from what they call traditional affiliate. How do you think about defining what is affiliate and why do you believe that that doesn't come across as low trust? Like what is it about affiliate that makes it higher trust than the alternatives?

Speaker A: And you even argue that each marketing lever done really well will, will increase and improve and kind of fill that trust gap. The thing that I would also share is that affiliate, uh, has had its checkered Past, no doubt, absolutely 100% and if anything, you know it, it deserves some level of that scrutiny. My hypothesis is that, that you have the nature of it being very much a third party speaking about the brand as opposed to the brand speaking about themselves, themselves. It doesn't mean you can't get aspects of that in other channels. But what, what, what is interesting is like I think it's doing it the right way and doing it very much aligning with that audience, with that quality and with that reliant on quality third party messaging. Where it does go wrong is there's plenty of ways I can list where it does, you know, where it goes wrong. You've got, you know, some sometimes misaligned incentives which we'll talk about. You have fraud, which we'll talk about. You have over reliance on kind of legacy players or, or a last click piece. So if we can avoid a lot of those pitfalls and do it really the right way at a high quality way, then you're sort of moving beyond a lot of the somewhat fair and somewhat unfair misconceptions about affiliate and partner and influencer. I think of them as very similar from like a structural payment mechanism place. When you get down to the detail of like a scope of work or who's doing it for you, you definitely, you're probably going to look at kind of breaking those out at different things in terms of influencer and affiliate in particular on the consumer side. So I do want to call that out with you as well. Cool.

Speaker B: And on that definition, like are there different types of affiliates? Should we talk about that? And maybe incentivization is a good uh, thing to talk about in that segue.

Speaker A: Yeah, I think that's an interesting question. Before we get into kind of the incentivization and the incentives. I think it's kind of exciting to hear about, you know, starting with the partner level because they are really the, the currency of the ecosystem. As I say, some folks say it's like the R and D of the ecosystem. A lot of them are entrepreneurial. A lot of them have done a lot of interesting things. Some of them are one off individuals to multimillion dollar corporations. You might have Rolling Stone, Entrepreneur, USA Today be considered an affiliate or a publisher in this context. You might have uh, in the SaaS landscape I almost think of like G2 crowd as like the, the head of the tail where a lot of well run SaaS partner programs can be essentially this, you know, head, medium and long tail of review sites where you're getting candid descriptions of why am I choosing this SaaS product over another. You've got if there's a place for coupon and deal at times there's a, there's a place for loyalty. In different times there's gated communities where you can be part of a membership and then maybe offer them something special or unique from your brand where it's not going to leak and get everywhere. There are podcast, connected tv, newsletter can be part of affiliate so, so sometimes we refer to it as less of a channel and more of like a multichannel lever where you can pay more on a performance basis and get access to hundreds or thousands of partner type uh, partners and maybe 15 flavors or partner types and there could even be media buying involved there. So, so there's a lot to throw at the wall. I don't want to you know, try to get too far afield here but for me it's exciting to think about. This is almost like a multi channel layer if it's managed appropriately. But that's gotta be, that's a big if at times.

Speaker B: Yep, makes sense. All right, let's, let's now talk about incentivization. Yeah. How does this work and how do you uh, sort of help customers think through how to set it up?

Speaker A: Well I love it. Love uh, the Charlie Munger comment. You know, show me the incentive and I'll show you the outcome. I'm sure you've mentioned that many times. Kind of what I was sharing. The excite and attractiveness of the lever that is affiliate is that you typically are paying on a action or paying on a performance metric. What is your North Star metric? Is it a percentage of a uh, you know, retail transaction or cart size? Is it a flat fee amount for a qualified lead, mql, SQL or revenue action? That's where there's a lot of attractiveness to the model. That's also where sometimes people can get a little bit in trouble if they're not looking through multiple layers of the data. You are going to see the flat fee buys like it almost like an old school media buy if you will. You are going to see cost per click models and some partners moving to more programmatic levers and programmatic payment systems. But what it typically nets out at is erring on the efficiency side of the game and it skews heavily towards a pay for pay per action model which is uh, attractive when people are thinking about their existing program or coming in new. It's obviously important to cater to the partners to an extent just to be at A competitive rate. So if your competitors are out there offering a 10% commission rate, that's probably a good guide of where you want to be at a public offer and at parity so that you can maybe offer special partners, special volume quality partners, something better on the back end. That's an important layer.

Speaker B: Is there, is there a visibility into that, uh, tie on some of the platforms, or is that something that every affiliate partner will just tell you, like, hey, here's what's happening in your category. Like, how do you determine? Like, is, is it opaque or is it transparent?

Speaker A: Yeah, it's a, it's a little bit of both. Right. So the, if you, if you look at the networks, there is a lot of ability to come in and say, okay, as a, as a publisher, I can really review a lot of the offers, details, tangible content payouts, data that a lot of these brands and businesses are sharing. Their offer is now to your point, and what I was sharing earlier was there's sort of like what's publicly available and then there's the, uh, items that are a bit more opaque and that can vary by the brand that's offering and running their program. So talking to partners, not necessarily taking it as gospel, but being thoughtful about learning and understanding them, that's where the relationship play comes in. Understanding what they're seeing out there and kind of knowing how to sniff out what's real and what's not is really a valuable one. I think for the most part the partners are going to want to collaborate and share because if you can, they can empower you to get them better content, get them better landing page, get them better payout, get them better tools they need to succeed. They can go off to the races and say, got your brand guidelines? I've got the payment structures that make sense. I'm competitive versus the other players in the, in the game that are doing affiliate marketing for the brand and they can go off and promote you very effectively.

Speaker B: Got it. Okay. And that was interesting. Right. So when you engage with these partners, like you said, you give them your brand guidelines, you give them sort of the, the ways that you want to show up in the, in the ecosystem. And then they are creating. Sorry if this is like a newbie question. They are creat, uh, custom content that works for their audience based on what they think that their audience is going to like. But then marrying it to that brand guideline that you've provided, how often do you go back and revisit that, you know, content itself? Like how, how do you manage that relationship with those partners and how in the weeds are you or do you not care? Because hey, the, the, the structure is there, the incentive is there. You know, they'll figure it out and it's in there and you know, they're incentivized to figure it out. Or, or do you have to manage the part actively?

Speaker A: It is one of the parts. If you zoom out and think about kind of the elements of a program, there's various pieces of it, right. You've kind of have that tracking foundation. You have going out and finding and identifying and recruiting them. You kind of have the how do we get them into a program at all? There's a lot of layers with that. And then once they're, then are they active? Are they driving leads or revenue? Once they're active, how do we optimize and get them doing more thinking about quality in a different way. Thinking about your new product launch that's coming up, there's a lot of, a lot of stuff there. So to answer your question, for, for partners that have the volume to justify it, absolutely want to be monitoring that content on a regular basis, depending on the brand and size and volume. Is that, you know, monthly, is that quarterly, is that, is that less frequent to evolve on that thought. Right. You know, you do have that 8020 rule on steroids and affiliate where there really is a top tier partner in your program. You know, call it the top 10%, top 20% that are really driving a lot of volume relative to the rest of the business. Now the better the program, the more, more time you have building it and crafting and making it better, the more volume you have. Also a little dependent upon the brand, you're going to hopefully have a lot less diversification, you know, uh, concentration, risk, rather you'll have diversification. Right. So the short answer is you absolutely want to be monitoring that. Now on the long tail where there's less, you know, volume and you're less at risk from a volume and revenue perspective, you're probably not going to be like uber policing those, those content pieces. But if we're talking about, you know, financial verticals, if you're talking about certain catego categories, you actually want to have a mix of human and technology and automation to make sure you are monitoring those. You don't want them claiming the wrong apr, you don't want them targeting a wrong audience type. If you're a 21 category, there's a lot of flavors of that to make sure that you are monitoring that just from what's being put in front of the uh, customer piece. And certainly there's checks and balances at the network level and then also at the partner and hopefully agency or consultant level that is going to look at those things as well just to if they're following any kind of major violation, you want to obviously avoid that.

Speaker B: All right, very cool. Now on the measurement side, this is very timely. We got uh, an inbound inquiry from a major like large, you know, multibillion dollar fitness device company that apparently ended up breaking their affiliate tracking because they were using a Pixel and then they implemented their consent system, you know the cookie consent system and something like just broke completely for affiliate tracking. And I was like, how can this be a multi billion dollar device company not implementing server to server tracking? So break it down for us. Like why is that important and why is that better than Pixel?

Speaker A: Yeah, I mean you've kind of identified it essentially, right? You've got multiple devices, multiple browsers, you've got multiple privacy regulations globally, you've got the app ecosystem. There's so many ways and reasons where it's possible to lose fidelity in a pixel based tracking methodology. Right? It's, it's, there's times when it's going to fire. Was that installed correctly? It's not necessarily the wrong way to track because you can get signal and you can debatable, you know, but from a, an API server to server based way, those of you reasonably, uh, familiar in technology, you're going to know that that's going to make for just a better signal and avoid a lot of the issues that we're seeing in fidelity loss. And you know, there's an unfortunate dynamic where you know, you don't want to, you got to kind of check each other as an industry. Right. You know, sometimes brands will go, well, you know, I'm getting the following and I'm not necessarily going to be crediting that and a pay for performance model, you bet. Better believe it's important to make sure there's accuracy. I mean there's, that's important in every situation but especially in a paper performance model. So the server to server model is fantastic. Especially you know, if we look at the SaaS world which we're seeing such great learnings and growth and excitement around and focus. The CRM integration is just a really good way to validate that piece. And so I would say that setting that up right from the beginning is really, really where I would advise most people. And that's where we, we tend to suggest to your point, okay, I'm going

Speaker B: To ask you a question and tell me if this is too technical or in the weeds. But the server to server integration basically means that if, let's say the affiliate induces a click, right? So some consumer clicks on that affiliate link, lands on your website, there is some type of information passed through, you know, a browser URL, utm, uh, code or what have you, you take that and you as, as the brand, as the owner of that website, you store that information on the server side, associated session id and then you are essentially tracking whether that session or whether that user in a subsequent session took one of the conversion actions and you store that on the server side. So you're not just reliant on what happened in that particular session and then you are sending that over on the back end back to the affiliate network. Did I get that right or is there a, is there a different way to do this service?

Speaker A: No, I think you're describing it correctly. Where you know the, the affiliate network is sort of this record holder referee to kind of say okay, you've this software in between brand and partner and then if you've got that server to server call or that API call that can then more readily, more accurately, more ideally frequently if there's a gap on pixel side, share that data so that that's housed within the network. I think you describe the dynamics of it fairly accurately.

Speaker B: All right, cool. And the last piece is like okay, you say that last click is potentially rewarding the wrong thing. What is a better measurement if it's not last click? Like how else do you track clicks and touches? Or what is your recommendation to like is it first touch? Is it like distributing between different touches? Are you looking at what else is happening with that, you know, consumer? So it's like more multi touch or. Yeah. What's your thought?

Speaker A: It's, it's. The short answer is sort of moving towards more of a multi touch view at the very least. And do you, do you switch over to a multi touch incentive or are different incentive M M methodology that's a little bit of a nuanced, you know, case by case basis. I think the thing that you'll appreciate is similar to sort of the. I uh, don't want to put words in your mouth here but let's say someone has like a multi touch view of determining value or dare I say incrementality. It's, it's sort of an input and you don't necessarily view it as the gospel truth. And I think that's where last click falls into a problem. It's not that it isn't, it can't be helpful. The problem is when the brand looks at it as well. This is our primary methodology of rewarding partners and it gets exacerbated by the payment model and going back to the incentives because um, if you think about it, coupon deal loyalty, not always but in a lot of cases browser extensions can be a lot of trouble. If you're, if that type of behavior is obviously going to be uh okay, I've looked at, I've done my research, I've already made the decision to buy now where can I get my credit? Where can I get my coupon code? Where can I get my cash back? Those aren't necessarily bad things but just those. It's like those convergence of events creates outcomes that are not ideal for this model and creates too many incentives to do the wrong thing and feed money to the cookie monsters if you will or are those that are later in funnel. It's not to say those can't be value. So that's where there's stand down rules by certain networks and certain partners to say hey if this partner shows up, uh, you know we're, if the browser extension shows up we're going to, you know we need to have a stand down so that it actually credits if another partner shows up in the multi touch sequence maybe within 24 hours or maybe within 7 days depending upon what the inputs are. There's ways to not necessarily, dare I say throw the baby out with the bathwater and set your multi touch view in a more intelligent way and not just just straight credit those last clicks. So you know what I mean in this case it can get real dicey for brands that are not monitoring it closely. They're not thinking about not necessarily the end of the world to have last click. But what other safeguards are there for you to say? Well we have a stand down in place, we have policies that maybe mitigate. Not everyone comes into the program that is in these categories of partner types. Maybe it's a select few that we know we have some controls on. Maybe we have a multi touch view within the network as well as within the client data that can say hey there's five touch points that happened before this. This particular partner is doing a great job of introducing. Why don't we dial up their commission, why don't we talk to them about how that's netting out for them. There's a lot of like interesting, you know pieces in that that I think you would appreciate.

Speaker B: Hey folks, thanks for listening to this podcast today. If you're enjoying the show and if you're getting value out of it, we'd really appreciate if you drop us a five star rating on your favorite podcasting app. And you know, let's, let's talk about sort of how, you know, what success looks like, what doing it right looks like. I want back to the incentive question because there's a lovely, there's a bunch to dig into this. Um, but yeah, tell us about ebay.

Speaker A: Uh, this is such a fun one. It's kind of feels like ancient history because I'm old and it is old, but it's also real. And I think the fun thing about this is it's, is it's a fun topic but it's uh, it's so exciting to think about what partner marketing, what affiliate marketing can be if you do it the right way. There's like, there can be brand building elements, there can be story driven elements, there can be things that happen over the course of many years. And that's exactly, exactly what this was. You know, working closely, managing the ebay motors program. Many years ago there was this rising blog called Bring a Trailer that is now almost its own beast and its own auction. That back in the day that wasn't the case. They were a blog that, but they had a phenomenal enthusiast community. A lot of commenting, a lot of people excited about what was there. And we sat down and said, well a lot of people know that you can, you know, purchase vehicles on ebay. This was around, you know, kind of post great recession. So a lot of people, there was, there was a little bit of a need in parts for people to kind of make do with what they have. But then there was like an enthusiast community that liked to tinker. Well, the thought was, how do we get people thinking about parts more with ebay, like one of the many marketing initiatives within an organization like that. And one of the ways was to say, well, let's, let's team up with Bring a Trailer. Let's do a multi year, multi post. Uh, initially it was a test obviously. And they, their collaboration, their creativity, their mix of thoughtfulness and tech was phenomenal. And it was an opportunity to basically say, you're going to take uh, a 60s Corvette, strip it from nothing and build it with only ebay parts. And then they're going to kind of crowdsource the commentary from the Ring a trailer community and have them come. The comments were off the charts. Engagement was great. It was a period of time that saw a massive increase in parts and exposure accessory accessories revenue at ebay. And it wasn't like it was driving like absolute same numbers from a GMV perspective, but it was in the, I believe it was in the millions. It was very positive and it was multi year campaign. So it shows you how the story was really there. Oh, oh, where's the ebay project car now? Oh, they're at Laguna Seca doing this. Oh, where's the ebay project car now? So it told this like multi, multi layered story. Now you know, can every company do that for every partner? Certainly not. But it's just such an amazing example of where the right mix of creativity, measurement, content can be really positive with affiliate.

Speaker B: Amazing. Was there anything surprising to you when you were part of that project? And I know it's from like a more than a decade ago, but like what was the most surprising thing for you?

Speaker A: A little bit of how long I ran it for, a little bit of just how strong this partner community was. You know, I think that that's really hard to replicate. There's a little bit of partner selection and what I'm getting at is that it goes back to my point that not to take anything away from an ebay or Nike or, or uh, you know, gusto, that's paying the bills, that's, that's a critical part of the ecosystem. And what inputs are you giving to the partners? But if the partners are given the right inputs, bring a trailer is sort of the hero of the story. In, in some ways they uh, their community was really like voraciously you know, feeding into this and fueling it and their, the way they wrote it, the way they crafted it, it's a partnership. But I think that it underscores how the partners drive a lot for the ecos.

Speaker B: You know something that you just said sparked a thought for me which is if you think about Reddit and where a lot of like community work is happening nowadays, right? Or even Facebook groups or you know, I don't know that YouTube is the same way or not. But how do you think about like is there a place for Facebook groups and Reddit communities to play a role in the affiliate sort of area? Or am I thinking about this wrong?

Speaker A: You're kind of nailing it. We, so we have specific partners in affiliate that are provide specific Reddit use cases. So when a brand comes to us we can kind of like say you want this particular use case for Reddit. Let's, let's introduce you to this partner, let's collaborate on a plan for that. So you're absolutely nailing it. That's that kind of crowdsourced. I mean some of the data recently coming out obviously for LLMs and search is pretty compelling. And so it's spot on. It's a really good point. And it's sort of takes that psychology that you referenced from the bring a trailer success. You nailed it.

Speaker B: All right, let's talk about Atlassian. Very different from ebay. And I'm wondering what this looked like.

Speaker A: Yeah, I think there's a particular PM influencer, uh, on YouTube that has been really great to work with Alvin the PM. And I think that YouTube is such a, it's a great example for a lot of reasons. You've got measurement within the Google ecosystem. You've got the growth, the fact that it's its own search engine, uh, the video format. There's a whole kinds of reasons. But in this case it was sort of a page out of that playbook we just discussed. I mean we basically got to double traffic. We got to get nearly a 50% increase on the core North Star metric. We had a partner that was willing to collaborate on videos that kind of fell within parameters. But was this candid view of. Okay, what if we're thinking about Confluence as a pm? How might it play fall into your playbook? What are some of the pros and cons? So there's that authenticity and realness to it. It's not like they're just.

Speaker B: Wait, hang on, tie, tie, tie. You're, hang on, you're bearing the lead here. You're saying 81% increase in traffic just because of that one affiliate video. You're kidding me. Like on, like for the, for the entire Confluence, like was this. No, no, no, no. Yeah.

Speaker A: Okay, tell me we didn't double traffic for the business. Um, this was, this was basically doubling traffic for, for what we, what we were ranting previously. So we, this was an existing partner. We did quite a lot with them already. So I wish next time.

Speaker B: Okay, okay, so you're saying that there was a baseline of traffic from, you know, overall sort of affiliate, you know, partnerships and this one particular targeted placement and this collaborative approach got 81% increase on that baseline and a, ah, 46% increase and sort of this very, I would say high intent metric. Right. Day one to day six validations. That's pretty amazing. So. Okay, that's very cool. And because you have the baseline, you can see the pre post from a campaign like this. How do you, do you think about like replicating this? Like how are you going to keep beating this. And how do you measure the success on a longer term basis with a customer?

Speaker A: Yeah, I think we, we try to take an approach that your, your recruitment is never done. You know, it's like I joke with the Glengarry jokes of the great movie from many years ago, uh, of the podcast, Always be testing. And it's also kind of the internal mantra of like always be recruiting. So you're always out trying to on a weekly, monthly, quarterly basis find the next great all star in your program, which is I think a fun exercise. There's also a lot of always be, you know, you're kind of always looking at what, what are some of the maybe uh, underutilized partners in your current ecosystem. You may have hundreds, you may have thousands depending on the maturity of your program. So sometimes it's about finding the diamonds in the rough of those that maybe haven't been fully utilized yet for whatever reason. This is an example where you know, you're not talking about like a million subscribers to the channel, you're talking about, you know, just under 50,000. But that kind of mid level high relevancy play is really cool to see and kind of, you love to see that in our space. And I think that's one of the areas that seems to have clicked. I think that's where some of that authenticity gap comes from. Right. Sometimes you get to these uh, massive players. There's a little bit of a, like okay, you, you bought your way into this or kind of reading it. I don't think we're quite trusting the reads that we, we did when those things first started popping. Right. Every, every channel has its fatigue and it's, you know, it's decay. And I think that when you get into more of these high audience relevant and uh, not necessarily massive counts, like seems to be a better sweet spot. Cool.

Speaker B: Amazing. All right, let's talk about tracking and measurement. Probably the hardest thing with any modern media tactic. So walk, walk me through what, what you have here.

Speaker A: Yeah, and I think we've kind of covered some of these pieces. Right. But if you think about it, you, you, if you're not, if we can get that server to server tracking connection dialed in from the beginning, you're going to capture more of the accuracy and you're going to be more uh, effective at rewarding partners which are again are the, the kind of the gasoline for the engine if you will next layer down and if you're, you're kind of in that SaaS vertical, your, your, that CRM interconnection is going to be really sure that you're kind of validating that. And it's even more validated from an accuracy perspective. In particular if you're looking at you know, um, MQL SQL type management of actions. Right. The other piece of it is it's easy to. You certainly want to be able to look at there's so many different flavors of partners and they're going to have wildly different promotional methods, perhaps data that's, that's brought in effectiveness quality levels. So if you can segment them by types that can give you some good signal of saying okay, content is giving media content's giving us this review content is getting this uh, if you want to get even more nuanced maybe comparison contents giving us this newsletters giving us the following. So, so seeing it by partner type and at the partner level, well guess what, you can even drill down into some partners might have five websites. Maybe website one is doing fantastic but website four is not. So there's a lot of way to slice the data in those partner programs that needs to be looked at to say these are absolutely not one, uh, you know, one of the same. And how do we differentiate? Right. The part where it starts to get into the fun world that you live and operate in is we're seeing a lot of evidence to suggest that you know, if we can get impression data and we've talked about this measured, incentivized, um, instruct, uh, in some ways require certain partners to say hey this is an important part of our measurement. We want to see that exposure as a means of feeding MMMs the right way. As you know out of the box. MMM is not going to play will with a uh, with a last click non impression based affiliate program model. It's like the inverse of what you want. So if we set it up the right way, you know better than with it's the holy grail from our, our opinion too. And so we're making progress there and we're seeing some really good stories around. If we can see that exposure you're going to be able to be closer to actually measuring if this is if this is incremental or not. And then I, and ah, I talked about a little bit right like last click is a, is a fine you know one measurement point. But let's look beyond that multi, let's get that multi touch view. Let's look at your internal to make sure we're seeing a lot of other quality metrics whether that's new customers, whether that's return customer. Let's, let's There's a lot of ways to make sure you're capturing more than that to not be as just, you know, too specific about one thing that's not going to give you the right outcome.

Speaker B: All right, so I have a question for you here, please. I'm a big believer that you know, if you have the right inputs for the affiliate program, including that in the, in a, in a, in something like a marketing mix model makes a ton of sense. What's still hard is, you know, you can't really do an incrementality test in the sense that you know, in any type of media where you have geo targeting capability, right, Like a meta or a Google or a LinkedIn, you can say that hey, only show ads in these five states and the remaining 45, that's your control. We're not showing any ads. And you can measure the incrementality by assessing the lift between the five states and the, and the 45 control states. States obviously we don't have that luxury in affiliate because you don't control, you know, it's not something that you can directly sort of influence where the viewership is going to happen. It's happening from wherever the demand is coming in. And so one of the things that we've thought about is the, the an incrementality testing idea is changing the incentive. And so basically what you're doing is like if you see incrementality from affiliate in your mmm and you want to test it even further, you increase your incentive for a certain period of time to see if can inflect the growth from affiliate. So it's kind of like a pre post type of test. Have you ever done anything like that or do you recommend that or do you think that that's not a good idea? Maybe there's a different lever to pull if you want to test how much you can scale affiliate.

Speaker A: Yeah. So let me go down a couple of hit listings. This is really a great question. In cases where you have a lot of volume per partner, cases where those partners are really smart and savvy and willing to work with you and high trust, there are examples where they will collaborate with you on holdouts and ways to serve something up to one audience but not to another. So there is a nuance. It's not common, it's not often done. It can be done though with the right partners and so we can, you know, point you in the right direction on that. You're right though at a high level it's hard to replicate that. So going back to Your other question, which I love at the basic kind of more manual, less scientific level, I've seen a ton and this is one of my favorite things to do is look out over the course of the year, find a period of time that's not necessarily going to be like peak season. Ridiculous, but not necessarily worst. You've got sort of a period of time, maybe it's a month, maybe it's a quarter and you can essentially tee uh, up partners to say, hey, we're going to run a promotion at this month. What can you do? In short, it's like an if then piece. Like if you can do, you're, you're on track to grow by 25% in October of this year. If you can grow by 50% instead, what would you do from an increase in exposure perspective for that? And what you know, reward would we give, could we give you for that? And I think that's one of my favorite things because you're talking to a human, you're collaborating with them on something, they get excited and think, oh, I would love to promote your brand further if I knew there was an opportunity to earn upside or there's a way to structure that. And I think that's not, you know, it's clearly, you know, in the data scientists favorite but I think that's going down that path. At ebay and another others we've done, uh, we had you know, team of data scientists doing what is, what are probably not necessarily. I always get a little uh, tripped up on the exact scientific language. But it's almost like a before and after test which is the worst thing that any data scientist wants to hear. But those have done quite a bit where there's sort of like a pause or a hold or hold period. So there's, there's different like ways to address the imperfectness of, of affiliate and it's measurement, measurement unlike other channels. But those are some that come to mind and a lot of them I'd be, I'm surprised. Um, some of them you come back and you think oh well, that that particular partner is not going to be incremental and you, you, you get maybe like a positive signal and, and sometimes you're like a lot of tests, you're always surprised by the results.

Speaker B: Totally makes sense. Okay, that was great. That's what I wanted to dig in with you because we get that question all the time. It's like, hey, affiliate looks good. How do we test? Sort of doing more and we have some good tips now for people. Okay, yeah. Misconceptions what are the biggest ones? What, what are the, the falsehoods?

Speaker A: Oh man, in the industry there's so many. Where to start? This, this will be the book we'll just write about the falsehoods. No, just, I mean all jokes aside, I think that you know you always got to look at those incentives right? So like networks are great, they're important part of the ecosystem but if they're earning off of, of you know, commissions you gotta be very wary of like uh, do you want to dial up those commissions to the hilt? That's just a high level thing I would, I would be aware of when you're looking at the ecosystem, you know the passive versus active thing, it's shocking to me how many folks often will apply the programmatic or paid media lens to affiliate and think okay we launched on a network, got it all loaded up, where's the revenue, where are the partners? And it's, it's sort of like if you don't have a team or an individual that's really leading that charge and pushing forward um, AI with or without AI you're gonna need, you're gonna need to have someone driving that vehicle. You can't just say I've built this beautiful car. Here you go. Why isn't it going anywhere? So the active management is very important as it relates to getting volume. It's, I say it typically takes, takes um, probably nearly double the time of like a meta Google just to get, optimize data learnings like it's, it's didn't document this here but it's worth calling out because it's related. It's, it needs some time to breathe and it needs the right resourcing to really see it through outside of the programmatic. So you need those people working on it. The bottom feeding one is interesting. I, I don't, I think there's a, there's a little bit of a perception. It's, it's understandable that there's been years of issues and challenges with affiliate where that over reliance on what's, well here's our heavy coupon deal loyalty play book that's obviously going to lead to that bottom feeding perception. But as we talked about earlier, think about all the things that have been proven to not be that storytelling element, that top of funnel creator review trust building element to it is really real. So if it's not managed well, absolutely can go, can be worth much. You know, it can be more of a pain than it's worth, worth as much if it's managed properly. You're getting the opposite of a bottom feeding play.

Speaker B: Makes sense.

Speaker A: The SaaS thing has been exciting to see it explode in particular over the past five years.

Speaker B: Wait, hang on. Are there really people who think that affiliate is just for consumer? I mean we see a lot of consumer. We serve both consumer and B2B so that's a valid.

Speaker A: Is it a, is it a myth? Is it a, is it a percept misperception? Maybe I believe, I believe it is. Maybe that's going away now. Yeah, maybe that's struck from our misconception options. I like that. Let's go with that. I think we've called out the last this one too. That the, the flavors of partner types are just too immense. You know whether it's connected tv, pods, media sites, reviews, create creators and I do consider influencer and creator part of that. It's just there's too many other options. I mean there's like 15 flavors of affiliate partners outside of coupon and deals and you can essentially go at without them or you can go at it with them in a very, you know, thoughtful, proper payment, proper management way. It's, it's your preference on that. A little bit more consumer relevant obviously and depends on your promotional schedule. You'd want to make sure it aligns and then the fraudulent piece. I mean uh, there's fraud and I think in every, every digital, most digital channels. I think that going beyond network protection and looking at what other tooling and offerings that you have available to make sure you're m. Monitoring for anomalies, that's something we take very seriously. And if you've got some active management and active fraud protection measures, it's, it's certainly very important. They'. There's, there's a lot there. I'm finding that it's, you know, it, it, it comes in waves and you have to monitor it and, and make sure that it's being checked. But if it is, it's, it's not a issue to, to avoid the channel altogether. It's m. More of a call out to make sure you do have an active fraud management plan in place.

Speaker B: Very cool. I mean I, I agree with all of those misconceptions. I think like any media channel you really have to become an expert to uh, you know, kind of separate the signal from the noise. One other thing that I'm curious about, uh, and I know we have to wrap it up here in the next like five minutes. I recently came across this piece of news that Google is now doing what they call multimodal indexing, which is essentially they're saying that hey, video audio is going to get a lot more accurate indexing like the actual transcripts and so on and so forth. And so I imagine that, that you know, things like influencer things like YouTube things, you know, even podcasts, if you can, you know, think of like that as an affiliate channel. I don't know if you can. They all sort of, you know, play into your search presence, which means your GEO presence. Right. And so there's a massive halo effect of doing affiliate on your, you know, organic discovery in LLMs and search. Do you agree? Do you disagree? Have you heard anything differently from Google about, about the, the halof affiliate?

Speaker A: No, I think it was um, I think it was Jordan and I talking about the same exact topic. Who's, who's great. I think you know him as well from uh, from the SEO expertise, geo, LLM expertise world. And essentially the theory was my understanding and I could, you know, want to m. Make sure I'm describing it correctly for you. They don't, Google doesn't credit podcasts as much as they could. But that's coming soon and I think that might be what you're referring to where this is going to help significantly in, in GEO and LLMs. And it's going exciting. I also want to call out what you kind of alluded to there. Sorry Pranav, just we're seeing really good signal around affiliate really showing up well in GEO and LLMs. I think that's part of the excitement around the channel and I didn't really call that out uh, as much previously but it's something where the networks are investing in it. We're obviously investing in tools and people around it and it's really showing up well there. And again, if it's done the right way, you're gonna, you're gonna get, get that citation value in LLM. Um, exposure makes a lot of sense.

Speaker B: All right, you've got this slide about how you all do this at uh, Round Barn Labs and I think the first point makes complete sense. Let's talk about recruitment because I feel like that's the point that you were making just a few minutes ago, that you actually have to actively manage this. So what do you all do on recruitment that is hard for an in house team to even think about?

Speaker A: Yeah, it's just a lot of cat herding, honestly. Like I, I think that you have to have a mix of, a lot of times you'll go out and you'll, you'll be sort of Selling the publisher or the, the affiliate on an opportunity. They can promote anything and anyone in a lot of these cases, not necessarily at all. And some of them need an understanding of what this is. A lot of them are maybe relying on other methodologies of monetization, but there's still a value there. So it requires a bit of almost human salesmanship to educate them on why this is worth picking up in a meet. And that's part of the longer term play of it. So I think it's an interesting reminder that in some ways you're kind of, of it's almost two way. You're, you're showing the value of why this partner could work within the ecosystem and for promoter particular brand. And sometimes you're doing it on the brand side where you have to sort of say, well this is why this is a great match for you as a content and promoter of your brand. So sort of two way there, you know, we've developed a true partner score matchmaking technology. It's, it's proprietary. Uh, it's got some AI, it's got some, some interesting tools tooling available. Ah, it's internal but it's helping us match the relevancy and the, and the audience overlap really well. Obviously we're looking into things like competitive who your competitor is working for. You want to make sure we're, we're going after that in a, in a way that's valuable. Networks are great. They're valuable, they have a lot of data and they have a lot of partners. But if you're not thinking beyond that, then you're probably leaving something on the table there too.

Speaker B: Fantastic. All right, any other last, uh, points that you want to throw out there? Any questions that we should have covered? Maybe you should have asked before we wrap up.

Speaker A: You nailed it, Pranav. I never been on a conversation that went 54 minutes this quickly and I'm just grateful for the time. I think it's hopefully a sign that we enjoy uh, chatting and nerding out on fun things like this, which is usually how our conversations go.

Speaker B: This is fantastic. Uh, folks who are listening to this on audio or watching this after the live session, go check out Round Barn labs. Go check out Ty on LinkedIn. He always has useful things to share and he has his own podcast. Hi, what's always be testing. Um, so go put that into, into Spotify or itunes. I just recently heard your episode with. I think it was the fanatics affiliates person or did I get that wrong? And it was, it was great just listening to that, that content. So if you're curious about affiliate, go. Go. And sort of other marketing leaders, because I think you go beyond just affiliate, uh, on that podcast. So it's a. It's a great lesson.

Speaker A: Thank you, Pranav. Please appreciate that. Yeah, you gotta have brand formants and always be tested in your. Your queue.

Speaker B: There we go. All right, Ty, have a great rest of the week. Thank you, everybody, for listening in, and we'll share the recording after this event. All right, folks, that was Ty degranch, the CEO of Round Barn Labs. And if you don't already listen to his podcast called Always Be Testing, go give it a follow. I enjoy it myself, and I think you will, too. And tune in again next week for another episode of brandformance.