Affiliate Marketing Versus Lead Gen

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One of the questions that I get asked quite frequently is, “What’s the difference between lead gen and affiliate marketing?” It was literally just yesterday that it happened twice, the first from someone building a rich media ad business who said, “You do lead gen. Is that like affiliate marketing?” The second person asked something related, namely, “How do you think the LeadGen Industry People view the Affiliate Marketers? Or do they think they are one and the same? And vice versa? Do you think there is a negative connotation of the Affiliate Marketing Space and Lead Gen are higher up the totem pole?” While I hate to admit, it’s not a bad question, and if these two seemingly industry people do not have a clear delineation between the two, I can only imagine what the rest of the world thinks.

The answer of lead gen versus affiliate marketing along with the attitudes of each depends entirely on who answers. Like so many things, a one size answer does not fit all. First, let’s start from the perspective of a lead generator. To them, affiliate marketing is a channel. It’s a source of leads. Lead gen attitudes towards affiliate marketing are mixed. It’s not inherently bad, but it certainly has its share of bad. It may not sound like much of a distinction, but it means that those in the lead gen world have a predisposition to trying to make affiliate marketing work, as opposed to feeling that they need to stay away.

Affiliate marketing’s view of lead gen mirrors how lead gen thinks of affiliate marketing. For many in the affiliate marketing world, lead gen is an offer type. As affiliates they have the ability to promote many different advertisers; and lead gen to them simply means those that don’t require a sale. Where things get interesting is when we look at the potential attitudes from those outside of the performance marketing industry. If we look at the traditional backbone of affiliate marketing, the merchants, they have a long standing relationship with affiliate marketing. It comprises a meaningful, even if not significant, portion of their business. To them, affiliate generally means either a content site, a coupon site, or a cashback site. They do not think much if anything about lead gen. If they do, they think more about some of the other channels – search arbitrage, display, and/or email. They don’t quite see it as a different type of affiliate.

Where things get really interesting, though, is when look at the two sides of performance marketing from those really outside of the performance marketing world, tech startups and Madison Avenue. Tech startups and Madison Avenue can often develop a close working relationship, think new platforms like Twitter where Madison Avenue feels a need to leverage and work into the mix. For the most part, though, it’s usually startups vying for not just limited dollars but limited attention. It isn’t until the former has some sort of cultural breakthrough before the latter starts chasing and wanting to spend money.

Tech startups have either a love or hate relationship with affiliate marketing and lead gen. Most though don’t really understand the difference between the two. The majority, though, have a neutral to positive, just undifferentiated, perspective. They look at lead gen and affiliate marketing through one of two, and sometimes both, lenses. The most common is once again the channel perspective. They see them as a single channel to help their own businesses get more users. They often hope it is a magic pill for scale. “You mean there is a way to pay for signups? Great. I’m in.” The other portion look at performance marketing as a monetization option. They have their own plans for user acquisition; what they really lack is a way to make money. That’s where affiliate marketing and lead gen come into play. What’s missing for most though is the knowlede of how to leverage the channel for user growth and/or how and which model to leverage for monetization. Startups are a great source of partnerships on both fronts, and deeper ties between our communities and theirs has long been a goal.

The hardest nut to crack won’t come as a surprise to those operating within the performance marketing space. Madison Avenue should love affiliate marketing and lead gen, but they almost universally do not. More often than getting asked the difference between lead gen and affiliate marketing, I get asked if a brand will like “y”, where “y” is some form of performance marketing. While I don’t claim to understand brands, I think I have a working hypothesis on why they don’t do more. The cynical answer is effort. Cost per sale marketing, the core of affiliate marketing, does not tend to end up in the hands of Madison Avenue.

Lead gen takes work, and it doesn’t scale easily. With lead gen you have to do something after, even if it is sending emails. It means not just spending money but either the client or the agency is doing something with the data. The other issue with either is that they aren’t sexy. They don’t take advantage of any mega trends. But, the biggest issue is reputation. People in every segment have companies that deliver limited value. When in a hot area, value is a nebulous term. Often it has to sound good to offer value, like a lot of stuff with audience targeting or social media. The anticipation of what it might do counts more than any truly measurable action. But, when you have something you can actually measure, all of a sudden everything matters. You can tell if something is good or not, and if something isn’t good, you can make opinions on the whole. That is and will continue to be lead gen and affiliate marketing’s issues wooing Madison Avenue. Until it is sexy and easy, it will continue to be pushed aside in favor of other opportunities. Then again, if we could make money on sexy and easy, we would too. Acai anyone?


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