How Financial Marketers Can Plan Affiliate Marketing Budgets to Maximize Margins

Leadership often views the marketing department as a cost center because they can’t see how it ties to revenue. This means that, when the business needs to save money or redirect resources, the first thing they’ll cut is your marketing budget. 

But it doesn’t have to be this way.

If you can prove that marketing is actually a driver of revenue, you can reverse this trend and protect (even boost) your budget. Approaching marketing as a revenue center forces you to analyze the performance of all your channels to establish the link between your campaigns and your financial firm’s KPIs. 

This may mean digging deep into your affiliate marketing tracking data, like analyzing the performance of each partnership and each campaign per product line to see which tactics are most effective.

You’ll also want to understand unique customer events, like how many new credit card customers signed up vs how many were approved. Then, you can link a particular campaign with results, like seeing an X% increase in approved credit card customers. 

Once you have this data, you get more clarity in your budgeting plan about how you’ll re-invest in more cost-effective activities and can make a business case for affiliate marketing’s efficacy in driving revenue. 

Not only can this make leadership reconsider marketing cuts, it can also help you get buy-in from other departments, like sales and product (more on this below). And, it will lay out a road map for your team to follow, making them more likely to hit your targets. 

However, we know how difficult it is for financial marketers to get granular data and end-to-end insights into your campaigns and the customer journey. And even working across departments can be equally challenging. We’ll address this and more in the next section based on how our clients approach this. 

Here are four affiliate budget planning approaches we’ve seen our clients execute to successfully maximize revenue and market share, and prove the channel’s worth.

1. Tie your affiliate marketing strategy to the larger business strategy with results you can measure

As a marketing team, one best practice is to directly tie your marketing activities to your firm’s needs and larger business goals, like an increase in deposits.

But measuring marketing results can be difficult, as information needed to link marketing activities to revenue is often siloed. 

Here are three ways to combat this: 

1/ Break down internal barriers and collaborate across departments

Your colleagues on sales, finance, and data teams will have valuable information about the customer journey beyond your marketing funnel.Work closely with them to tie campaign results back to revenue so you can optimize your marketing budget planning accordingly.

For example, sales can tell you how long it takes to close leads, as this directly affects when you should measure the success of a customer acquisition campaign. For example, there could be marked differences between loan application and loan approval dates, which can change your success metrics (as well as provide you with insights into lead quality). 

2/ Focus on quality–not just quantity–of leads

Low-quality lead generation can negatively affect revenue, so quantify your lead quality beyond new loan applications or high yield savings account openings. For example, our clients find it useful to track account funding from the initial deposit through six months, which builds a fuller picture of new account value. 

3/ Implement affiliate marketing tracking and reporting that ties campaigns to results

For financial services companies, that means a software that offers a variety of different tracking methods for different campaigns, and one which can directly integrate with your account opening or loan origination systems. This integration can be crucial because fragmented systems can create data silos that hinder your ability to measure campaign effectiveness and make informed decisions. Read more about common affiliate tracking challenges for banks.

An example we’ve seen of successfully overcoming silos is a banking client that had one storage system for marketing data, and a separate system for customer data. That meant they couldn’t map attribution beyond tying a new account to a marketing campaign. Solving this separation by unifying the data was a major step to understanding their marketing results and putting their budget back into effective initiatives.

Ultimately, by connecting budgeting allocation to measured results, you’ll be able to drive efficiency. You’ll know which strategies moved the needle on your goals and how much of your budget those results cost. You will also be able to see the tactics that underperformed and make necessary changes, and put more money towards partners that are out-performing others. 

2. Build your marketing budget around your baseline and adjust for key factors

When you sit down to allocate spend, your first step is to know how much of your baseline is useful for your next budget. 

If you haven’t seen any major adjustments in your marketing funds, your products, your competitors, the market or your publisher fees, you can use last year’s budget as a reliable baseline for this year. However, if you’re expecting shifts in these areas, adjust your marketing spend accordingly. 

This means factoring in specific changes that could impact your spending priorities and overall strategy, such as:

• Plans to enter a new geographic region or launch a new product, which will require new initiatives that were not accounted for last year. 
• Stiffer competition in your product space, which can lead to CPA rates becoming more competitive and new tactics, like investing in influencer marketing or video content creatives, to better differentiate your product. 
• Decisions to increase your publisher pool. This means you could be spending a different amount on campaigns than before. For example, you might try a new mix of longer-tail publishers that charge less than a few previous partners. Or you might increase spending to go after a leading publisher with competitive rates. Discover how to optimize your partner program.
• Publishers raising their rates year-over-year, which can increase your planned budget even if you are not adding new partners. 

These factors will require you to rethink your spend and your targets. They could mean you take a hard look at all of your affiliate initiatives to only fund those which are effective. Or, you may have to push for a higher budget to accomplish all of your marketing goals. 

3. Know how aggressively you want to source more funds

If you are trying to reach more ambitious goals than last year, yet your current budget may not allow for this, you may need to make a case for more funds. 

One way to do this is to ask for allocation from marketing dollars that are earmarked for any brand or customer acquisition initiatives not tied to a certain channel. Affiliate marketers can make a great case for spending this money, especially when you can tie your tactics directly into brand awareness and acquisition results. 

Another more aggressive approach is to work within your marketing team to re-allocate funds from other channels, whether that’s social media, SEO, PPC, content marketing or email marketing. For example, if your affiliate program is out-performing another marketing channel, like paid search or programmatic ads, you can make a case for increased investment on proven partners and strategies that drive quality leads and revenue. 

A different avenue is finding opportunities for co-branding—a strategy where you work with another brand to promote a product. For example, if you have a credit card with rewards from a notable partner, your partner may come up with additional budget on their side to co-promote your joint product.

4. Plan for contingencies and experiments

Performance channels’ variability makes working to a budget fairly difficult. This is where building flexibility in your budget planning can help you deal with that unpredictability.

For example, if you have a much bigger promotional spike than expected during the first quarter of the year, you may run out of marketing dollars for your ongoing campaigns more quickly. That means your team has to adjust your budget allocation for the rest of that quarter to keep overall marketing efforts going smoothly. 

When something unexpected happens and a budget gets tight, we’ve seen our partners successfully: 

• Earmark dollars from a contingency fund or from another initiative that isn’t working well to re-invest in a successful campaign. 
• Work closely with publishers to make campaign changes while maintaining a good relationship with them. For example, you may share your data with a publisher if you’re getting a smaller number of leads than expected in order to collaborate to improve your messaging. Or you may explain you want to pause an underperforming campaign to invest that money into your collaboration next quarter for a new launch. Learn more about the benefits of a partner-first strategy.
• Prove an opportunity is taking off to ask for more budget. Be ready to pitch leadership with data that shows they should re-invest in the tactics and channels you can prove are working, even midway through the year. Tracking and reporting software can help you compare live campaign data to make your case. 

On the other hand, you may find you have over-estimated your spend in the first three quarters of the year and have all of your contingency budget to spend in Q4. 

In this case, be open to experimentation and trying new campaigns or different deals with publishers. For example, you may pitch an email campaign with current partners or even an exclusive takeover. You might even test promoting another product where there could be more demand. If these efforts are successful, you can double down on your results when creating your next budget.

Here are two marketing budget plan examples we’ve taken directly from clients who found a cost-effective advantage through strategic budgeting.

1. A bank with a small publisher mix increases acquisition with new fee models

Recently, we worked with a bank that knew they needed to refresh their affiliate marketing program. However, their geographic reach limited them to a smaller pool of publishers, so they couldn’t push for a bigger partner mix.

Instead, they decided to see if they could restructure their agreements with current publishers to maximize margins. We worked with them to pitch current publishers on implementing new initiatives under a flat fee model. 

This allowed them to use the same amount of budget, but still experiment to improve results. Ultimately, this strategic move saw them scale growth while keeping below their target CPA and increasing net new customer acquisition. Thanks to this result, they continue to use flat-fee initiatives to scale their program while meeting their acquisition goals.

2. A credit card company finds success by using their contingency fund for experimentation

One of our credit card clients found they had some budget leftover near the year’s end after they had fulfilled their planned initiatives. 

While they could have doubled down on campaigns that performed well, this was a great opportunity to try something new. Because they didn’t need to tie this spend directly to revenue, as their goals were being met, they could test a hypothesis instead. 

We worked with the credit card company to try out a tactic we thought would work, but was a new initiative and totally untested for the brand. This saw our client spend their 50k contingency with a new publisher, which led to more cost-efficient customer acquisition results than other campaigns they were running.

Our client came away from this experiment with new knowledge to take into next year’s budget. This could be pushing for 50k more to double down on this success, or even creating a case to test another hypothesis, as there is now business justification for these experimental initiatives.

You can build a marketing plan that improves margins and drives revenue if you ensure your budget goes to tactics that are tied to real results. The keys to making this work are to break down data silos, ensure proper tracking, and build a budget that can flex with the unexpected. 

If you are a financial services company who wants help with aligning their budget to strategic affiliate marketing, contact Fintel today to see how we can help.