As a career marketer–I almost can’t believe I’ve been doing this for 30 years—I’ve learned the importance of learning from other disciplines. When you develop competence in an area, it’s easy to become a “hammer” and see every problem as a “nail.”

Consider affiliate marketing.

It’s a well-established sub-category of the larger world we call “marketing.” But not every business can use affiliate marketing to grow. Sometimes the product or business model isn’t a good fit. However, nearly every marketer can apply principles from affiliate marketing. 

I was doing some reading recently and stumbled across Fintel Connect’s 2024 Financial Industry Affiliate Marketing (FIAM) Report. It opened my eyes to some significant trends that will affect how financial services companies reach customers in the coming year.

I’m going to highlight what stood out to me and why I think it’s important. I also recommend that you read the report for yourself, as there’s a lot to unpack.

The Role of Affiliate Marketing for Fintechs

For anyone who isn’t familiar with affiliate marketing, I’ll provide a brief explainer. 

Businesses engage in affiliate marketing by contracting with partners (“affiliates”) who will promote your product or service in exchange for a sales commission on every customer they can prove they brought in. Many affiliates operate as a business and may promote multiple offers from a variety of providers. These can include publishers like Bankrate, Nerdwallet, Forbes, and Business Insider, as well as influencers, news outlets, and reward platforms.

Here’s a practical example of affiliate marketing: 

Let’s imagine that a financial services software company specializing in expense management solutions contracts with a bank to offer a co-branded corporate credit card tailored for small-to-medium-sized businesses. The card includes all the bells and whistles like automated expense categorization, cashback on business-related purchases, and seamless integration with popular accounting tools.

To promote this offering, the software company builds an affiliate marketing program targeting B2B influencers, such as business consultants, accounting firms, and professional networks. 

These affiliates, who already have trusted relationships with businesses, share the offer through a unique hyperlink when running ads or through their newsletters, blogs, webinars, and LinkedIn/social media posts, earning a commission for every successful referral that results in a corporate card sign-up.

The software company has a system to track those unique affiliate links and analyze how many credit card applications are a direct result of the affiliate’s efforts. At the end of the month, the affiliate gets a commission check and the software company enjoys steady growth at a very predictable commission cost. 

Note that one of the major hurdles for companies looking to establish an affiliate program is setting up said system to reliably track, manage, report, and pay out affiliates. 

This is where a solution like Fintel Connect shines–offering a turnkey platform with 6000+ affiliate partners in their network that not only simplifies these operational challenges but also ensures compliance, a critical concern for financial services brands.

Affiliate Marketing and the 95/5 Rule

Affiliate marketing is a form of performance marketing that is incredibly powerful for reaching the portion of your addressable market that we call the 5%. In case you’re wondering, that’s a reference to the 95/5 rule, something I’ve been talking and writing about for a while. 

In a nutshell, the 95/5 rule suggests that only 5% of a B2B business’s prospect universe is actively looking to buy at any given time. If you use performance marketing, the tactics will only be effective with 1 out of every 20 people at best.

On the other hand, your brand marketing efforts will reach the other 19 and keep you top of mind for the moment when they’re ready to buy. 

The 95/5 rule doesn’t apply at the same level for B2C brands, but the underlying principle still serves (it’s more like 85/15).

As a financial services or fintech brand, if you want your overall marketing efforts to succeed, you need to strike a balance between trust generation/brand marketing and lead gen/performance marketing. With respect to the latter, affiliate marketing can help get you there. 

Affiliate Marketing Trends and Findings

Let’s dig into what financial services brands can learn from the 2024 FIAM Report. Before we get into it, two quick notes. The report:

• Uses “affiliates” and “publishers” synonymously.
• Is focused on U.S. and Canadian markets.

This report isn’t trying to predict the future, but it is a temperature check from more than 110 affiliates who were running active promotions in 2023. These people make their living this way, and have every incentive to anticipate the market in 2024 and beyond.

Here are some of the highlights to pay attention to. 

U.S. Publishers Expect Continued Growth in Consumer Deposit Products

25% of survey respondents expect to see a big increase in demand for investment products for the U.S. market, while 21% of affiliates expect savings vehicles to also see a strong uptick in demand. 

Given the high interest rate environment and lingering public concerns about bank stability, this makes a lot of sense to me. Consumers want to protect their assets and expand their investment portfolios to take full advantage of the market conditions. 

We’re also watching the Boomer generation reach peak retirement age, which will have knock-on effects for the stock and labor market. The next 5-10 years will trigger a reshuffling of wealth and workers, which should translate into immense opportunities for financial services firms.

Banking and Credit Cards Are the Top B2B Growth Focuses for Publishers

In the U.S. market, 50% of affiliates surveyed in this report expect lending to experience increased demand, with 15% and 13% of respondents expecting increased demand for checking accounts and credit cards, respectively. These expectations are backed up by the push affiliates are making into these products and categories.

This trifecta of banking products will be familiar to anyone who has run a business or worked in commercial banking. If any of these three financial pillars is weak, your business will suffer. When you find the right banking partner, business gets much easier.

Although I wouldn’t have predicted it, as soon as I read it, the numbers made sense. The Small Business Administration has reported a record boom in the creation of new businesses in the post-pandemic era. It stands to reason that those businesses are working out the kinks in their money management strategy and looking for banking partners that understand their needs. 

Video Content Beat AI-Generated Content as a Marketing Tactic

48% of those surveyed in the U.S. market said that video was a top tactical focus for 2024, while 46% said they would incorporate AI-generated content into their marketing efforts. 42% of affiliates planned to focus on email marketing. 

Surprisingly, despite the widespread growth of podcasting, only 12% of people planned to explore podcast marketing in 2024.

I’m seeing an explosion of AI-generated content on LinkedIn and other channels, so I’m a little surprised that the number isn’t higher. Video and email remain strong mediums to connect with your audience, especially as AI-powered search disrupts the conventional approach to SEO. 

As always, the question you should ask is how well-equipped your business is to execute on your marketing plans. Then, you should strike the right balance of brand and performance marketing.

However you generate the marketing assets, strategic deployment is the best way for lean teams to make the most of their resources.

Economic and Algorithm Uncertainty Are the Biggest Challenges for 2024

33% of U.S. affiliates see economic uncertainty as a top challenge, while 29% worry about changes to search engine algorithms (as I alluded to above). 

I’m no stranger to anxiety about the economy, especially when the political landscape is volatile like it’s been. However, I think financial services companies should view uncertainty as opportunity in disguise.

Many firms will hunker down and wait for the smoke to clear—after all, it’s a proven way to control risk. Hunkering down is also a proven way to miss out on new revenue.

As for search engine algorithms, my opinion follows a similar thread: Waiting for big tech to make changes that you want is a recipe for disaster. Instead you should look for ways to own the relationship with your audience and build brand loyalty that is stronger than SEO. 

How Affiliate Marketing Can Build Your Brand

If you’re considering affiliate marketing for the first time, I recommend that you find a trusted partner to guide you through the process. It’s possible to DIY an affiliate program, but there’s no reason to reinvent the wheel.

The efficacy of affiliate marketing is dependent on several other factors as well, including:

• Harnessing advanced data analytics to understand the traffic coming from your affiliates, as you may discover new market segments and even product development opportunities.
• Optimizing your campaigns for a mobile-first experience, which can significantly boost click-through and engagement.
• Allocating resources for experimenting with new channels and content types. Start with small, thoughtful tests that can give you real-time feedback about what’s working.
• Monitoring affiliate performance and adjusting your commission structure to reward results and overall marketing excellence.

Attracting and retaining marketing talent can be a massive challenge. When you partner with affiliates, you get access to professional marketers who know how to get results and manage their own budgets. 

Building Beyond the Confines of Your Organization

Affiliate marketing is unique in its capacity to manage customer acquisition costs and bolster your brand credibility through wider reach.

It’s also a proven strategy for financial services firms. Affiliates can help you reach the widest possible audience with performance-based tactics and predictable acquisition costs.

Your long-term growth depends on your ability to attract, convert, and retain the 5% of your market that wants to buy. When you use affiliate marketing as part of a comprehensive strategy that includes brand marketing and conventional performance marketing, the results can be very powerful.

Interested in learning more? Reach out to CSTMR and schedule a call.