Lead Distribution: The Next Big Revenue Growth Driver for Affiliate Networks

Posted on Dec 4 by Garth Harris in Blog

Affiliate marketing has taken exciting strides over the past decades, and affiliate networks have played an important role in the industry’s rise. In fact, today the vast majority of advertisers, an impressive 83 percent, partner with affiliate networks and rely on them to secure deals with publishers. There are numerous ways they continue to deliver value to its partners and boost revenue, but there’s one specific strategy to highlight that forward-looking affiliate networks have successfully tapped into – lead distribution.

A natural extension to an existing affiliate marketing program, lead distribution unlocks new opportunities to monetize leads beyond what’s possible with click traffic. With redirects, marketers pass the traffic to your advertiser and let them go. With a lead, there are more options for monetizing that lead.

In this post, we’ll dive further into the reasons why affiliate networks should care about lead distribution and the benefits of bringing it all together – affiliate marketing and lead distribution – on a single platform with CAKE’s powerful performance marketing software.

Why lead distribution matters

Lead distribution is a performance marketing process that involves capturing, validating, and distributing leads in real-time. Below is a quick refresher on how that process works.

Lead generation generates a “lead” which is a website visitor that has filled out a web form by providing some, or all of his/her, contact information. The form can be simple, asking for an email address, or a more complex form requiring detailed information and additional questions.

The key benefit of lead distribution for affiliate networks is that the process enables them to monetize leads beyond what’s possible with click traffic.

To illustrate, here is an example comparing how pricing for affiliate marketing “traffic” and two different lead distribution “leads” can be handled for a financial loan institution.

For the typical affiliate marketing model, a fixed rate, in this example $20, is set for traffic which includes all data sent directly to the advertiser. In this case, the traffic is not pre-qualified before sending.
For lead distribution, the affiliate network can set a different value for every lead based on what interests the seller has in terms of the quality of data gathered, as well as the vertical or industry. So,
1. Lead A has higher-quality information that the buyer desires, such as a stronger credit score and/or a better lifetime value for a mortgage loan. This top-tier lead can be priced at $150.
2. Whereas Lead B has lower-quality information or attributes that aren’t as valuable as Lead A and sells for $35.

With lead distribution, affiliate networks are enabled to sell leads for the best price possible. The pricing per lead can have a range, with better-qualified traffic and leads garnering higher selling prices. For instance, with a vertical such as legal, a highly-qualified lead can go for a selling price in the range of $300 – 400.

Three reasons affiliate networks need to adopt lead distribution

So, why should affiliate networks adopt lead distribution? The simple answer is revenue. But there’s more to it. Here are three additional compelling reasons why affiliate networks should make lead distribution part of their marketing mix.

Expands the playing field

Today, more and more publishers are capitalizing on these partnership opportunities. Business Insider reports that affiliate commissions are now the fastest-growing income source for publishers, comprising 15 percent of their revenues. Given the healthy forward-looking projections for affiliate spending by advertisers, there still remains a long runway for continued growth.

By adding lead distribution capabilities with your affiliate marketing program, the growth potential is two-fold. Here are two opportunities for affiliate networks to expand their engagement with more advertisers and affiliates.

Networks have opportunities to sell a single lead to multiple advertisers or lead buyers.
Networks can increase incremental revenue with existing affiliates and advertisers in currently targeted verticals. Plus, they can unlock opportunities with new verticals extending its base to include working with new affiliates and advertisers.

Promotes stronger relationships

As you know, affiliate networks are already well-versed experts when it comes to creating and leveraging relationships with their affiliate partners. Lead distribution provides networks with an opportunity to further nurture relationships and provide the highest value for both sides of the fence – with affiliates and advertisers, or lead buyers.

With lead distribution, networks add more value to advertiser-publisher interactions by playing a more significant role in attaining higher-quality leads. Affiliates gain access to a wider audience of buyers, while lead buyers/advertisers are matched with the sellers who deliver leads that meet specific qualifications. In both cases, all audiences secure the best results for maximizing ROI.

Enables more control

Typically, with affiliate marketing, publishers or affiliates control the content and traffic that advertisers are interested in, making their online media platforms valuable assets for advertisers to leverage. By giving publishers an opportunity to monetize their traffic, advertisers create a win-win scenario for both parties.

With lead distribution, affiliate networks win more too. They can tightly manage the quality of affiliate-driven traffic through its network. Instead of sending traffic from the publisher/affiliate to the advertiser and hoping they convert, lead distribution presents the option to transfer the process of managing leads into the hands of affiliate networks. This allows them to own the data, plus take control of the user experience, content, and conversion points by operating landing pages.

See clearly, sell better: Bringing it all together to maximize profitability

It’s key for affiliate networks to arm themselves with the right technology. According to a survey from Forrester Consulting, one of the top criteria advertisers use when selecting an affiliate network is the “depth of tools the network provided for measurement and publishing.”

This applies to both affiliate marketing and lead distribution. For affiliate networks implementing both types of programs, the value of unifying the management of these programs on a single platform cannot be understated. One platform, such as CAKE, empowers affiliate networks to:

Elevate performance with intelligent lead routing
Refine customer acquisition with insights derived from closed-loop measurement
Remove risk and maintain credibility
Protect data and eliminate privacy concerns

These benefits help drive continued growth and maximize profitability. For example, a healthcare provider has been able to monetize its leads by more than 50 percent by leveraging CAKE to deliver quality leads. With CAKE, the provider has also increased efficiencies by minimizing errors and streamlining its entire flow of leads – from the moment the lead is generated to the reporting dashboard.

This is only one case. Over the past decade, CAKE has worked with thousands of clients and gained unmatched, collective knowledge that enables them to create new revenue opportunities. One such opportunity is lead distribution, which when done correctly, can be the next big revenue growth driver for affiliate networks. To learn more and adopt lead distribution with CAKE, contact your Customer Success Manager directly.

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