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- [00:00]
A
Why do you think everyone's talking about affiliate marketing right now?
- [00:03]
B
It's the best marketing channel. On Facebook you pay for impressions. On Google you pay for clicks. On affiliate you Pay for sales. 5 to 20% of the commissions that you're paying may actually be fraudulent which cuts deep into your margins. There's two breakthroughs we've done. Every affiliate marketing platform relied on cookies. Saathi's affiliate marketing does not rely on cookies. Number two breakthrough is it's multi touch. So now you no longer have to rely on the last touch. Sathi will show you the entire journey. You can retarget affiliate traffic with ad creative of that affiliate. Imagine that.
- [00:52]
A
Yash, welcome back to the DTC podcast. This is I think your third appearance on the podcast. Always rely on you to discuss the world of influencer and now affiliate marketing. I come from a background in affiliate marketing. I started my career in like 2006 and it's, it's one of the most uttered things I hear brand owners talking about these days. I feel like affiliate is really having a moment right now. Why do you think everyone's talking about affiliate marketing right now?
- [01:21]
B
It's the best marketing channel. It is. On Facebook you are TikTok ads, you pay for impressions. On Google, you pay for clicks. On affiliate, you pay for sales which is eventually what everybody wants out of every channel is you buy a new market, you want to sell. And affiliate is like this dream channel which is like hey, I only pay when they do all the work and I only pay my, my cost of acquisition only get spent when I have already made the money, right? And maybe like I can also pay them 30 days later like in terms of like cash conversion cycles and so on. So that's why I think affiliate is. And I think it's always been that way. I think affiliate has always been this dream channel. It's just like it's hard to execute, it's hard to track versus something like a Meta or a TikTok ad is way easier to track.
- [02:10]
A
But CFOs love it.
- [02:11]
B
Yeah, the CFOs definitely love it. If you could invest the same amount of money as your meta ads but on affiliate you would do it in the blink of an eye. Because it's just you can, you can dictate your roas. So you can, if you offer a 20% commission, that's a 5,5x ROAS, right? But then it's hard to scale. You can't get the same volume of results. Typically you don't have the same transparency with affiliates. Some of that we're, we're solving with Sati and happy to talk about that, but it is, objectively speaking, on a per unit, on a per se level, a better marketing channel.
- [02:50]
A
Well, talk to me about the evolution of my savvy because you, you know, get Sorel, we've talked about multiple times on the pod. Talk to me about why you decided to expand the pyramid of influence, a very specific focus on influencers.
- [03:05]
B
Yeah, I think the. So the pyramid of influence which we have spoken about on the other podcast link will be somewhere here. The middle layer is still affiliate. It's just that that layer was so hard to track, to scale, to grow, that it was hard to get to the top tier, to the pinnacle of the pyramid. So we were like, hey, let's just build something that solves that because Sehal does the seeding part really well. Like we, we can help you find influencers, seed them at scale, ship them products, track when they post all of that. The affiliate piece was still broken in many ways and that's why we decided to build Saathi.
- [03:42]
A
So yeah, so talk to me, you know, pound for pound, we're talking about affiliate as if not the best, one of the best channels. But what are the pitfalls? What are the reasons that have traditionally held affiliate marketing back from dethroning Meta, for instance?
- [03:56]
B
Yeah, a lot of brands still approach. And when I say affiliate, I mean, I also mean the modern form of affiliate marketing, which is it tends to be influencer affiliates because influencers are the ones with all the reach. Back when you started in affiliate marketing, it used to be blogs, publishers, email lists, these types of people as affiliates now because they had all the attention. Now it's influencer affiliates. And fundamentally, like I think the consumer journey is less of a funnel than it ever was. Yet affiliate marketing relies a lot on last click attribution, which basically means whoever had the last touch, the last click, or the last coupon code gets all of the 100% attribution for the sale. But we all know that's not how consumer journeys work. I think like on the very core foundational level, that tracking dilemma of when I have five influencers post about me, but somebody uses one person's discount code to make a purchase, that person gets all of the credit for the sale that shows up in my dashboard. But the other four people did all of the hard work for no credit whatsoever. I think that fundamental problem leads to a lot of brands just cutting their affiliate programs, even though when in reality they may actually be working and having an impact on your bottom line.
- [05:14]
A
And affiliates are crafty. Having been an affiliate back in the day, that's another aspect to the channel is that you. Sometimes these leaks happen accidentally, but also sometimes it happens because affiliates are just trying to get that last click in a lot of ways. Can you talk about instances where problems like that happen?
- [05:31]
B
That's, that's the other side to like the, with what I spoke about so far, the people who are actually doing like the other four people that I said who've posted but got no credit, that's like a measurement problem. So there's that. On the flip side of that. So there the good people are not getting credit. On the flip side is affiliate fraud, which is another huge discussion to have which is like, hey, some affiliates will literally leak their codes intentionally. Sometimes it's unintentional. Some affiliates will pay click farms to drive a lot of traffic which may or may not buy so that clicks are inflated. So if you're, if you're, in case you're paying for clicks, you end up paying them on a CPC basis and it's just like random geo traffic from somewhere. Some affiliates will run ads and then against your own keywords and that counts as fraud. Some affiliates will buy their own products and get the commission for that and then they refund and then if there's no clawback in your terms, then that ends up becoming fraud. So like affiliate fraud is a huge component and there's so many types. But one of the most glaring ones was just recording this on a Wednesday, I think just this Friday. I was speaking with someone. We were onboarding this new brand on Saathi and they were like, we connected. It has this fraud detection system. So we just, we were looking at some of the dashboards and there was this one influencer who had made some $40,000 in sales. And we were like, that's interesting because they were not that big of a brand. And then we were like, okay, most of your other affiliates have only made maybe like 500 or $1,000. What's special about this person? They must be like a huge influencer or something. And we went to their profile and it was like, it was like a mom fluencer with 3,000 followers. So there's no way this person's selling 40k worth of goods. Then we ran the fraud check and then we find out there was actually her code was it was leaked somewhere. So that fraud engine picked it up and this brand had already paid them some. I don't know, I think roughly around $9,000 in commissions over the last quarter. So it was pretty bad. So we were like, okay, this is clearly a problem. This happens. And then Saathie is also able to catch it so easily. So now in the future they won't pay any fraudulent commissions. So yeah, I think a lot of brands who are listening to this, if you have an affiliate program onboarding, I would run a fraud scan on that. I'm sure there is. We've seen historically, like even with other brands that we've tested, 5 to 20% of the commissions that you're paying may actually be fraudulent, which cuts deep into your margin. So.
- [08:03]
A
Yeah, and it affects your program too, right? Because you're rewarding the wrong person. So you, you know, that person will continue doing the, the bare minimum and the person who's actually gets no result and then falls off your campaign because they're not getting paid.
- [08:17]
B
Correct. Exactly. And you end up making strategic errors because not only are you paying commissions to the wrong people, you are, like you said, Eric, making bad decisions because of that data. So on the other side, like if you're making decisions based on last click data, you're going to incentivize the last person a lot and not the people who drove the discovery or the nurture process. You're only rewarding the last click. So the other affiliates drop off, AKA stop posting about you. And then your affiliate program program falls off the cliff because the right people who are doing all of the hard work were never rewarded. So there's definitely that like you to end up giving credit to a lot of people who don't deserve it and then your program ends up crashing.
- [08:58]
A
So yeah, I feel like affiliate is really, it's like a natural evolution in a way because you know, when you have influencers, a lot of, a lot of influence, like it's about them maturing in a way. Right. Because when you have influencers and you're first getting into influencer game, it's like, okay, it's pay to play. I make a post, you send me, you send me some money or whatever. But then as you gain actual affinity for a product or these influencers learn a little bit more about marketing, it becomes like a natural fit for them to actually be incentivized and actually, rather than just make a post, like actually sell on your behalf, become an actual advocate on your behalf because they have skin in the game, they're getting paid when you get paid. Right. So it's a, it's a, it's a way to align your incentives when you do It, Right, Correct.
- [09:41]
B
The good thing in favor of this is more and more influencers are starting to see themselves as media companies and not as influencers, which means they've started to think like business people. And what business people want is uncapped upside. When you're being paid flat money for a post, even if that post goes viral and gets millions of views, you're gonna get paid a thousand bucks for it, right? But if you have uncapped commissions on top, then it's. You're incentivized to make better and better content that gets more and more views because you make more money as a result. So what we're increasingly seeing brands do, especially on the serial side, is they do a mix of flat plus affiliate. So if a traditionally, if an influencer is going to charge, say $1,000 for a reel, they're going to bring them down to say $600 plus 10% of any sales that come as a result of that. And then typically we've seen the good influencers who are like a perfect fit end making way more than they're initially quoted, $1,000. So sometimes the brands end up thinking, hey, maybe we should have just paid them the thousand bucks. But yeah, you can always add caps to these things and so on.
- [10:55]
A
But yeah, I see it being a perfect storm as well because more people are looking for ways to make money too. So people are professionalizing their influencer profiles. They're, you know, people are looking for these, these new ways to make money. So I feel like affiliate, it's, it's really like the perfect storm for affiliate right now.
- [11:12]
B
Yeah, correct. On top of that, I think one interesting thing to mention, Instagram just allowed linking to external websites on reels, which is fantastic for affiliate because now what used to happen previously was, you know what the highest converting asset was across affiliate influencer marketing? It was the Instagram story. And the reason for that, not TikToks, not reels, stories. And the reason for that is you could link inside of a story, you could add like a link, and then people could click on that link and go buy. The downside of this was stories only last for 24 hours. There's only limited creativity you can do with the story because of the. It's either a picture most often, which is static, or a short video. So there's that. And it does not reach as many people. It Maybe only reaches 10% of their audience. Right. And then disappears. Not everybody sees all your stories. So stories were limited yet highest convertible because they had links in them. Reels on the other hand were the highest reach asset across influencer marketing. Which means because reels have reels can get on the explore page, reels can go viral. Now if you add a link on the reel, that's just unreal for influencer affiliates because now you have the highest reach asset with potential to be the highest converting asset. And I think more and more influencers are going to look to do affiliate deals now because it's much easier to make money as an affiliate if you can link to the link on the reel instead of a link in bio or in a story.
- [12:51]
A
We've talked about the benefits of affiliates, we've talked about a few of the drawbacks. So then how does SATI actually sit in the middle and help you get the best of both worlds? How does it actually prevent fraud for instance?
- [13:03]
B
Yeah, so we've actually worked on a AI fraud engine for the last three months. So the types of fraud that we even discovered was just unreal. Like ordering their own things is like the most basic fraud. But most affiliate fraud engines only catch things like hey, if the influencer's email is the same as the order email and that's a self referral. We go one step beyond. We're tracking if they have similar emails, we're tracking if their IP address is similar, if their billing address is similar. It'll look at like dozens of criteria like this to flag if it's a self referral. So things like that. It's a very deep fraud engine. It keeps scanning all the coupon websites for leaked codes. It automatically blocks when honey or one of these Capital one or one of these extensions try injecting codes directly at checkout to steal credit. It does that prevents that automatically. We have leak proof codes which are one time use discount codes that are only generated on link click which means there's no code really and then there's no leak as a result. So a bunch of these things is how we prevent fraud. There's suspicious geo traffic analysis so it'll track if traffic is coming from a suspicious location, let's say locations where you don't ship for instance. So there's that and that's how we handle the fraud side of things. On the flip side, what's just personally more interesting to me is the opportunity with tracking. So there's two breakthroughs. We've done most affiliate marketing so far until Sathi. I'm pretty sure this is like words. First, every affiliate marketing platform relied on cookies which means the way they worked was when you click on the Link, it stores a cookie in your browser for 7 days, 14 days, 30 days, whatever that length is the cookie called the cookie window. And then whenever you buy within that cookie window, the sale gets attributed to the affiliate. The problem with that is cookies are increasingly unreliable. Most people whenever you get that cookie banner your instinct is to click no, don't accept, don't allow cookies. That's one Some people have ad blockers enabled. Some browsers such as Brave, such as Safari do not support cookies. Chrome might sunset cookies anytime. They keep releasing these heads up marketers cookies are going to go away. So that's like an impending doom that's coming that will hurt a lot of affiliate software. Sathi's affiliate marketing does not rely on cookies. So it's cookie less tracking. So even if they don't have cookies, they've disabled it. They're on an unsupported browser, they have an ad blocker enabled. The affiliate tracking will still work. So that's number one breakthrough. Number two breakthrough is it's multi touch. So now you no longer have to rely on the last touch. Saathi will show you the entire journey. If they clicked on the first person's affiliate link and they just browse the website, it'll track that. If they clicked on the second link and then they added to cart but did not purchase, it'll track that. If they then finally seven days later visit the website and then use a third person's discount code to make the purchase, it'll track that. So you're now able to see all three touches it took to make the sale versus in the old world, the last person whose discount code was used would get all the credit. In the new world you can choose how you distribute credit amongst the three affiliates that were part of that conversion. So these are some of the ways we are changing the game.
- [16:35]
A
How I guess it's up to every person how they would choose to credit that. But maybe from brands that you've seen or even just how you think about it. In that case where you talk about three different touch points with three different affiliates, what's a good rule of thumb for how to actually attribute something like that properly?
- [16:51]
B
Very good question. And this is such an important strategic decision to make for any marketing team who's using this. And we're advising brands on this right now so I can speak to this. The answer is there is no really good thumb rule. The rule is look at how the conversion journey typically works for your brand and attribute weight accordingly. So generally speaking the way you would attribute is you would assign certain weights or, hey, percentages to every touch. So for instance, if you're a new brand, so one like one of the brands that we work with, it's called brick. I don't know if you've heard of them, but it's literally like a brick. You've heard of them. Like, it'll brick your stops.
- [17:30]
A
Your phone. It bricks your phone. I need it.
- [17:32]
B
Yeah, it breaks your phone. Yeah, but this is like such a. Yeah, it's such a interesting new technology. Like, you. You don't see it. You can't visualize it. You have to like, almost be educated about it. So for them, driving discovery is a much higher value event to them as a brand than driving the sale. Because if somebody like you already knows about it, they're like, okay, this person's going to buy one day or the other. What matters a lot is getting in, like getting in the mindshare, right? So discovery matters to them. So for them, they would bias more towards the first click, the first affiliate who drove discovery, as opposed to the last click. So maybe they're doing like, hey, you know, 70% of the commission goes to the first affiliate, and then 20% goes to the second, and then 10% goes to the third. It's like a decaying affiliate model. On the flip side of that, for more common products like, say, supplements. Great example. Everybody has a supplement brand, right? So what matters to supplements is not discovery, but sales. So for them, biasing more towards the last click is better. So maybe they do the opposite. They give 10% to the first person, 20% to the second, and then 70 to the last click. That's one model. There's so many. Maybe it's just equal for you. Maybe you're just like, hey, I want to play the safest game. So I'm just going to give like 33, 33, 33. You could do that. So that's like linear attribution. You could do both. Some brands do, like, I want to value the discovery, I want to value the purchase, and then everything that happens in between is nurture. So what they do is 40% to the first touch, 40% to the last touch, and then the remaining 8, 20% is spread evenly across all touches in the middle. So that's another attribution model. So there's different ways you can play around with this. And it really is down to. You have to make a strategic decision of what works for your brand.
- [19:26]
A
Super helpful, actually. I really like the instance of rewarding the discovery in the first touch because Once you have them on your site, then you can also retarget them through other methods as well.
- [19:35]
B
Exactly. One of the things that Saathi does, by the way, is like it'll train your Facebook pixel. So yeah, so if you get affiliate traffic through Saathi, you can retarget through a Facebook. This is in like a POC stage right now, but I think by the time this podcast comes out in a week or so, it'll be live. But yeah, you can retarget affiliate traffic with ad creative of that affiliate. Imagine that, right? Like, hey, this person drove, Eric drove like a thousand people to my website and let's say only five of them purchased. The other 995 I can retarget with a Facebook ad with Alex Ad creatives. Right. Which can then boost sales. So it's like whitelisting, but on steroids. It's like whitelisted content but shown to the people who already know that affiliate loving that. Those are some of the interesting things we are working on.
- [20:29]
A
Yeah, we're seeing that actually from some B2B creators in the B2B space that they were wondering. All these B2B influencers have sort of sprung up and then we're seeing the products that they're advertising being whitelisted back to us on their own handles. That's how they're getting those leads. Interesting. So we've talked better attribution, we've talked fraud detection. And the third pillar of this product is something you guys have mastered really well in the way you think about your influencers in sorrel. Is that like elevation or the gamification of the actual program? Talk to me about what savvy does in that case.
- [21:03]
B
Yeah, so this is like the third problem with affiliate marketing, which is more on a. Because like the two fraud and measurement were more like strategic high level problems. On a tactical level, most affiliate programs are not gamified. And what that does is it leads to a lot of creator churn or affiliate churn. By that I mean if your creators are just on like a 20% commission tier and they're just forever on that, no matter performance, no matter what. It's like, okay, they get bored and then they're going to leave and join some other brand who's giving them maybe a higher percentage. So you want to almost create this almost like in a B2B context, like a sales team incentive structure structure for them. Because your affiliates are like that. They're like your sales team at scale, like they're selling your brand to their audience right there's. These micro salespeople in some sense. So you want to give them a commission incentive structure that gets them going, that gets them excited and pumped to sell your products. Right? So one of the ways to do that is gamify your program. So things like, even basic things like, hey, once they join the program, send them a $50 bonus or once they drive their first thousand dollars in sales, send them $100 bonus. Once they drive their first 10,000 clicks, send them this free product. If they post five times in the next four weeks because we have this campaign going on, send them this special swag box that we have, something like that. All of this stuff needs to be there for your creators and needs to be communicated to the creators that this thing exists so that they're motivated to keep posting about you, to keep being part of the movement that is your brand. So and sati the way we. You can do this manually, of course, but becomes a headache at any more than like a couple dozen influencers. So we just automate it. You can just set up rules for this stuff and then there's a reward set up and anybody who crosses, say you can set it up so that anybody who crosses $5,000 gets a $500 bonus. You can do that. Anybody who crosses $2,000 gets a higher percentage commission after that that up.
- [23:13]
A
So yeah, this brings me back to my like, info selling days when you'd work in the affiliate marketing space, in the info space and there'd always be like leaderboards. Do you. Is that something that you've built in where you actually have like leaderboard on your affiliate program coming soon?
- [23:28]
B
So we do have a leaderboard on the brand side. So the brand see who their top performers are. We don't have a lead affiliate facing leaderboard, but very soon that's on the roadmap.
- [23:39]
A
All right, so I'm a $5 million supplement brand. I have a $5 million electrolyte brand. I've done a fair amount with influencers and that kind of thing. How would you sort of walk me through the process of how I should approach affiliate?
- [23:52]
B
If you've done some affiliate already, the first thing I would do is get a free trial of Saathi and run a fraud scan. Because if you're running any reasonable sized affiliate program, there's probably some fraud. So let's figure out where your, where the leaks are and then plug those leaks. They're very easy to do. So like literally takes 30 minutes and you're saving like thousands of dollars every month. So boom, that's fixed number one. Second thing you should do is evaluate your program for retention metrics. So things like revenue per ambassador. Nobody talks about this. You may have a thousand affiliates, but if everyone is making like a hundred bucks in sales on average, then it's like, like what's the point? Like there's going to be a section of your affiliate program that's just the highest converting highest revenue driving focus on them. Ignore the rest if you're resetting. So like look at these retention metrics for instance. So do that fraud analysis retention metrics and then start measuring things. Right? So decide on an attribution model. Make sure that the creators who are let's use an electrolyte brands. You probably want to do the reverse last click where the last click probably gets a lot of weight. But then you also want to enable the or give credit to the first touch, the second touch, the third touch, and so on. So decide on the attribution model and then start scaling. Start finding more affiliates onboard them onto your program. Make sure it's gamified. Make sure you have some default game structure created so your affiliates are incentivized to hit milestones and keep making more money for you. And with some of those principles, you should be good and all set.
- [25:33]
A
Where do you recommend people source affiliates? Is it just a matter of searching on the platforms for the kind of people you like and outreach or what do you recommend for actually finding affiliates?
- [25:42]
B
It depends on the scale that you want to operate at often brands also by the way, the best place to find affiliates is your customer list. So if you already have customers and you're a $5 million brand, you have thousands, tens of thousands of customers, send them an email with an application form saying, hey, if you want to work with us and make take 20%, apply here. If you want to work with us, you have more than 3,000 followers on any social media apply here. And then they can apply and inbound is like one of the most underleveraged channels for acquiring affiliates. It's the first place you should start. You're probably going to if you have a list of like 10,000 people, you know, maybe a thousand, like so many people are creators now. Maybe 500 of them are influencers. So like 500 influencers are sitting in your email list right now who've already cared about you enough to give you their money. So if you reach out to them saying, hey, we want to give you our money to sell the product, which you already know and believe in, it's like one of the Highest converting acquisition channels that you've seen. So first step, do that because you can just acquire dozens of affiliates like this and jumpstart your program. Second thing, search on the platforms. So what are your ideal customers searching for? What are they posting about? And then search for those sorts of things. So for electrolytes I would search for say marathon runner because they would take electrolytes. Right. So I can then go reach out to those people DM them. If you're running this process at scale, you would need a platform like Seral. But if you're just getting started, you should rely on your email list and rely on searching DMing creators on Instagram to get the ball rolling.
- [27:18]
A
Talk to me about program hygiene in a way like how when in terms of like number of affiliates and then how you should think about maybe like managing or pruning affiliates from your program.
- [27:28]
B
Yeah, we have an AI agent that will tell you who is inactive. So we recommend cleaning it every three months for like the average program. Now there's some high velocity programs that would do this once a month but frankly that's a bit overkill for the typical sized program. So every three months look at your bottom performers, look at who's not driving because you're gonna find like there's dozens of. If you have like more than 100, you're gonna find like at least a dozen affiliates. Just don't do anything like not just not selling, but not even like posting AKA zero traffic on the affiliate link. Those are the easiest ones to purge. Supports them. Do a fraud scan, make sure that the frauds are handled and you're maybe deleting their leaked discount codes. If somebody is running paid ads you can warn them. So these are some of the hygiene things. And then one of the metrics I recommend looking at is actually two metrics. RPA revenue per ambassador or affiliate and EPC earnings per click. That will show you the quality of traffic that they're driving. So maybe there's some people driving a lot of traffic but it doesn't convert. Their EPC is low. But if they're driving a little bit traffic, which on paper maybe isn't that good, but then if it's converting at a much higher rate, that's great. So their EPC would be higher. So revenue on a program hygiene level, revenue per affiliate, IT earnings per tick are the two metrics you should focus on and optimize from a metrics perspective. And then the rest of it is pruning the inactives once every three months. Looking at fraud once every month and deleting those. That's how I would approach it.
- [29:05]
A
Can you give me an example of a brand that you guys have worked with that maybe has exceeded expectations with what they thought was possible with affiliates?
- [29:12]
B
Has exceeded expectations. Brick is probably the best example of this because it's such a. They've scaled their program to. I can't reveal the numbers, but a lot. It's huge. And you know about Brick, so that's testament to their influence program. Like they've probably seen them somewhere on social media. So Brick is a great example. Heart and soil supplements, another great example. So big affiliate program, big group of affiliates. So these are some of the ones that come to mind.
- [29:44]
A
And then when at scale, like where does affiliate fit in the. Is it. Is it something that can like rival Meta for scale or like where does it fit in a. Make an omnichannel brand doing high volume?
- [29:57]
B
I don't think it's at the place where it can rival Meta. One of the things we've seen is it's a great second channel of growth. Influencer affiliates. So the first channel pretty much for all the brands we work with is always Meta or TikTok. Now affiliates are getting there, however, especially with these platforms opening up their own shops. So Facebook creator marketplace, TikTok Shop, like those sorts of things are rivaling Meta for some brands. But again, I think those things work for a certain type of brand, not for all brands. I think generally speaking Meta is definitely the biggest and then affiliates tend to be a good supplement to that because what happens on Meta is you run out of people to sell to. So at any given time as marketers, we know this, only 3% or 3 to 5% of any given market is in market, aka looking to buy. Those are the people that your Facebook and Google Ads are going to target because it's like intent based or it's interest based. Right now when you're done with those, you need more people to move from the 97% that's out of market to in market and then your ads close them. And so I think ads, the way I look at it from an omnichannel perspective is affiliates influencers great for like top of funnel, mid funnel. And then ads do the final close, right? But brands have to look at it. And some of these, like the large omnichannel brands, they look at it from this perspective is that hey, some influencers are going to post and that's going to drive retail sales for me next weekend. Which is fine because you look at it on the org level and not on like a program level, if that makes sense. So yeah, you have to have that mindset. And then once you've cracked Facebook ads, like you said, once you're at that 3, $5 million scale, top that up with some influencer affiliates and you're going to see not just affiliate sales, which is the direct roi, but indirect roi such as your influencers post about you. You retarget those people on ads, those ads. But overall Facebook roas goes up or CAC goes down, whatever. So that's, that's how I look at it.
- [31:58]
A
I really like that idea of funnel congruency when you have a really top affiliate and making the creative either come from that affiliate or you could even have the, depending on the size of the affiliate and the content of the affiliate, you could have a special lander that has the affiliate on it for like full congruency.
- [32:11]
B
Right? Correct. Yeah. Not to plug sati too much, but we do that too. It can personalize landing pages.
- [32:17]
A
So yeah, talk to me about how AI plays in all this. You mentioned like it's, it's part of the fraud detection engine. But how else does Sathy use AI to make great affiliate programs?
- [32:27]
B
A lot of workflows. So for instance, things like what do you do when a code leak happens? There is an agent that will auto detect a code leak and you can set it up. Right now it's manual by default because we want to give brands that control. But you can set it up to zoom that if somebody scored leaks and it's crossing like say $1,000 in commissions after leak date, you can automatically delete that affiliate and claw back their commissions. So like minor things like these that at scale at dozens of affiliates being caught as frauds becomes like a headache is just now done by AI. And one of the things that we are excited about that AI does is better things that humans cannot do. So looking at attribution, like what if there's an AI attribution model that actually looks at their content and attributes the weights accordingly. So these are the things that humans cannot do that we're looking to crack with Saathi. But right now it's a bunch of agents that do a lot of These workflows, collecting W9 tax information, those sorts of things. Payments are automated. So that's how we're looking at AI right now is from a workflow perspective. But from a long term perspective we're really thinking what can it do that humans cannot do?
- [33:40]
A
Affiliate marketing has been there since the dawn of Internet Marketing. But where do you see it going? Where do you see affiliate marketing going in the next like year or two? Do you think it just, it's just going to get bigger and bigger?
- [33:51]
B
I think yeah, especially with this Instagram rollout, especially with TikTok shop and things. And I'm sure like Instagram's gonna do like a version of Shop. I think this like affiliate thing is like a test for them. They're gonna roll out a shop and I think once that's live, it's gonna be crazy. So yeah, it's, I think we've seen so much social commerce explored over the last year or more likely over a year. I think it's just going to keep increasing because like I said, it's the dream affiliate channel. If you could guarantee the same scale as meta but with affiliate, everybody would pick affiliate. The reason why we pick meta is because it's better attribution and more volume. So I think we're solving for some of the attribution problems with affiliates now with sats and then hopefully with more volume will be solved by the platforms actually making more of these. And now you can link affiliate links or reels. So the future of affiliate marketing I think is more honestly more trust based. I know back in the day with all the info products and everything, it was very used to be a little bit of the slimy marketers just making absurd claims. Yeah, it was a wild wild west. So like just make the most absurd claims, six pack abs in six days. Like that claim is just not going to work anymore. Right. Like if an influencer posts that like they're going to get called out. So I think think trust based good affiliate marketing is going to take off. So yeah, I think brand should ally with these mission first creators who are aligned with their brand and just make them partners, make them affiliates.
- [35:18]
A
So yeah, I think it's the secret to platforms like TikTok shop because I know so many marketers have been trying to like crack TikTok as a traffic platform because so much attention is going there, like so much. I just look at my life and my, you know, TikTok is a big chunk of my info diet for better, for worse and, but so many people would be trying to run ads into it and just not able to get to the scale that they were getting on other platforms. But then you hear stories of people that go out, make the right affiliate partnerships and like affiliates are really appear to be the way to, to crack scale on some of those platforms. But traditionally then it becomes unruly to manage. Right. Whereas meta, you're just, you're managing your campaigns, you're managing your creative. With affiliate you've got all these people, you've got all these codes, you've got all these platforms. So traditionally scaling affiliate was probably intimidating to people a little bit.
- [36:04]
B
Bit, yeah. I think also traditionally like affiliates used to be a small channel because it used to be like email lists, like bloggers, like how many bloggers are you going to work with? Maybe like a dozen so, maybe 20, 25. Like that's easy to manage in a spreadsheet and you can look at them. It's also more last click friendly because somebody's sending an emailer out and you make a purchase. Like it's mostly last click. It's not like people are going from email to email to email. And then versus now it's completely changed. Now you could literally you're on a feed on TikTok or read reels and you're literally, you probably watch like 100 reels every day. Five of them are about one brand and you watch them in different times of the day. It's just like the volume of content has changed so much. So the attribution and the measurement has to evolve accordingly and that's what you're doing.
- [36:51]
A
This platform, you've been kind of, it's fairly new, you've launched it in the last little while. I guess you've been working with brands on it for the past several months. But it's exciting.
- [37:01]
B
Yeah, very, very exciting. I think it's time that there was a new frontier of measurement with affiliates and I think it's going to be huge with the influencers are going to love it because you can literally have a smaller program now because more people get credit for the sales. So more people want to post about you and the more often they want to post the lesser people you can have to get a certain number of sales for instance. So I think it's going to be huge. Let's see. We're super pumped. We actually as of this recording we just launch publicly yesterday. But yes we have been working with with a few initial early brands for the last couple of months. Results with the fraud detection, the measurement have been very, very exciting, very revealing. So can't wait to scale and take this to more brands.
- [37:47]
A
Nice. Well go to my sathy, that's my S A T H I O and look up Yash. Just give him a call guys. Always good to talk to is your fourth time I think on the podcast. Yeah, I look forward to seeing how this scales for you. I think it's an awesome opportunity.
- [38:02]
B
Yeah. And thank you for having me on always to share some of these exciting things we are working on. I think it's always a great conversation when I'm talking to you.
- [38:16]
A
Thanks so much for listening to today's episode. If you're not a subscriber to our newsletter, you can do that right now at directtoconsumeralloneword co. I'm Eric Dick and this has been the DTC podcast cast. We'll see you next time.