Last week was the second annual MARCC LA event put on by our friends over at Martech Record. MARCC, or Marketing, Content & Commerce, is a series of local events bringing industry leaders together to discuss what the future may hold for different aspects of the partnerships ecosystem. The theme of this event was interesting from an affiliate marketing perspective because it was focused around the “post-arbitrage era.”
What does this mean, and why did I find it so interesting?
First: What does arbitrage mean?
Basically, arbitrage means you’re buying traffic, either directly or through an affiliate, to acquire customers through traditional media buying platforms. You’re directing those users to a landing page, where a consumer can convert — and when they do, you earn a commission.
Apparently, at least according to the speakers at this event, this model is dying. If that’s true, then I’m in trouble. But I’m not too worried just yet..
Arbitrage: Alive or Dead?
The context of this event (which was a great event by the way), was very much focused on commerce. The theme came from a space that’s all about individuals buying products in retail and e-commerce settings. Knowing that, I walked away with two key takeaways.
One, I can completely understand how consumer behavior has changed over the past few years when it comes to buying your favorite perfume or a pair of shoes. The panelists all pointed towards a common trend: authentic storytelling. And who is telling these stories? The brands’ users! User generated content (UGC) is the name of the game when it comes to modern commerce. So is creating and sharing that content digitally.
Two, and tied to the first, is how brands encourage their customers to make UGC. This other trend I picked up on was the importance for brands to listen to their audience. Truly listen. I know the message was intended for commerce brands, to listen to their consumers and immerse themselves in their culture, but I still gleaned a little bit of that for my context.
Here’s my take: The flavor of affiliate marketing that we support tends to deal in lead generation workflows. Consumers are in research mode. They’re looking into a new mortgage, home improvement services, or auto insurance. Or maybe they weren’t looking at all, but they were intrigued by a compelling ad, and they’re curious how much it’s going to cost to install that new bathroom.
So from where I stand, arbitrage is very much alive and well. For some publishers and commerce brands, it may indeed be a post-arbitrage era. How you see it will vary based on your industry and vertical — but the one thing we can all agree on is that we have different views of the current state and expected future of arbitrage.
