E052 - Affiliate Marketing, Poker [Reposted from the "What's Your Wheelhouse" Video Podcast]

I know you're an expert in many areas, but your wheelhouse specifically is affiliate marketing.

And that's what we're here to chat about today.

So from your perspective, what should people understand about this right now that they probably do not?

Oh, there's a lot to that question.

I'll first frame up what I see from the macro side of things, and then I'll hit some kind of maybe things people should be thinking about that they usually don't.

But from a high-level perspective, banks and fintechs are spending $6 billion a year, and that's my estimate.

There's no public...

There's no authority here, but I'll go look at public filings.

So like what's Credit Karma saying, NerdWallet, LendingTree, etc.

So there's a few public names that report out their revenues.

And that's how I get a sense for how much banks spend in the category.

But if you compare the $6 billion a year to the $2 billion a year happening in direct mail, which is probably another large category where banks spend money.

So it's three times the size of direct mail.

It's been steadily growing for the last 10 years and reliably for most lenders, it's a source of really high ROI accounts.

So that's kind of the thing to know at a global level.

I think the thing for lenders that they often miss is it seems really simple to do affiliate marketing at a glance.

It seems like you sign a couple of deals with partners, you tell them something about your offer, you give them an affiliate link.

And then you just kind of go disappear and let it rain accounts.

And that's not actually how it works in practice.

It's actually one of the most actively managed channels in my opinion.

And the reason it's so active is you have to be on offense.

It's a competitive dynamic.

So when an affiliate publisher lists your offer, they're usually listing 10 or 15 other offers like yours.

So you have to win the consumer's attention by standing out in some fashion.

those are kind of like the product and pricing dimensions and then from a marketing perspective your funnel has to be really really low friction uh meaning your application rate your approval rate your click rate the better your funnel looks the more money the publisher makes as a result of promoting your offer and then a lot of good things start to happen when you're monetizing well for the publisher.