Why CMOs’ Obsession with Outcomes Could Spark a Game-Changing Shift in Affiliate Marketing

Ever wonder why affiliate marketing, despite being a marketer’s old faithful, often gets sidelined while flashy new channels hog the spotlight? In a world where two-thirds of marketers scramble to prove ROI amid an AI-driven marketing upheaval, it’s easy to overlook one of the most potent and cost-effective strategies lurking quietly in the corner. I’ve seen firsthand how this channel, when wielded right, transforms relationships from mere transactions into dynamic partnerships that actually push the needle. But hey, it’s not without its quirks—the very perks that make it powerful can also introduce risks if you’re not careful. Throw in the AI factor, and suddenly affiliate marketing isn’t just about conversions anymore; it’s about being part of the AI-driven recommendation game, doubling as a form of generative engine optimization. Intrigued? You should be—this nearly forgotten giant is evolving, smoothing out its old kinks thanks to smart tech, and it might just be the secret weapon your media mix’s been begging for. Ready to dive in? LEARN MORE.

Ivan Doruda, CEO, MGID.

Spend any time talking to marketers lately, and you will see that most are obsessed with hard business outcomes. It’s easy to see why: Two-thirds of marketers are under pressure to prove ROI at the same time that AI is disrupting every stage of the marketing funnel. Even brands that historically put awareness first are approaching marketing with a performance mindset, while every channel from digital out-of-home (DOOH) to connected TV (CTV) is promising to link exposure to a sales uplift.

Yet despite the prioritization of performance, one of the best bang-for-your-buck channels often goes uncelebrated today: affiliate marketing.

At MGID, we’ve been providing affiliate marketers with a route to paid media for many years. We aren’t an affiliate platform, but I think the channel is due for a reappraisal by marketers.

Aligned Incentives, Shared Success

Typically, the relationship between an advertiser and a publisher can feel purely transactional. A brand or agency pays for its share of ad space or a certain number of impressions, and the publisher delivers them. Whether those impressions lead to a sale is left for someone further down the funnel to figure out. The publisher has already done their job.

Affiliate marketing gives publishers some skin in the game. Because compensation is tied to conversions, publishers have a far stronger incentive to optimize their content and placement strategies to maximize the likelihood of a sale. Brands and agencies are not simply customers; they are commercial partners.

This incentive model creates a self-improving and cyclical quality filter. Affiliate marketing is a performance-driven channel where partners that fail to deliver outcomes naturally drop out of the ecosystem, while spend gravitates toward content whose audiences are highly engaged and have a propensity to convert.

However, surrendering a portion of creative control to publishers comes with risks of its own. When compensation is tied to conversion, the incentive structure can encourage aggressive and off-brand marketing tactics. Brands can find themselves having to police partners to ensure messaging is consistent and appropriate so that long-term brand equity is not compromised by a partner’s need for a quick buck.

Also, unlike traditional media channels that offer relatively stable reach and visibility, affiliate marketing yields highly variable outcomes that can fog up long-term forecasting. The good news is this unpredictability is being somewhat mitigated by the machine learning advancements I will discuss below.

Affiliate Marketing Doubles As GEO

Nearly one in five shopping journeys now begin within an AI interface. Marketers might feel entirely disconnected from this channel, which is taking a growing share of upper-funnel (and some lower-funnel) activity, but affiliate marketing can help move the needle on AI recommendations.

The large language models (LLMs) that power AI interfaces are not trawling the web to do their own research; they produce the most appropriate responses based on the vast array of user comments, product reviews, press coverage and any other relevant data they’ve scraped from the web. The stronger presence a brand or product has in this contextual milieu, the more likely an AI will point prospective customers toward them.

Affiliate programs kill two birds with one stone: They drive high-performance lower-funnel conversions while increasing the probability of being surfaced by AI interfaces. This is because affiliate content often takes the form of consumer guides or listicles, content that is designed to stimulate commerce and inform consumers while also being the exact type of material that is used as grist in an LLM’s algorithmic mill.

When a consumer asks a chatbot for a recommendation, the AI is more likely to surface a brand that has been vetted and discussed across online content. It serves as one part of the emerging discipline of generative engine optimization (GEO), today’s AI twist on the principles of search engine optimization (SEO), where marketers are reverse-engineering search to increase visibility.

With the rise of zero-click search, being cited by an LLM is crucial to retaining relevance. The best practices for GEO are not yet fully understood and will always be chasing a moving target due to the amorphous nature of LLMs, but at least with affiliate marketing, GEO is a welcome side effect rather than its primary purpose. Either way, the channel can work for you.

New Tech Smooths Over Old Bumps

For all of its performance prowess, affiliate marketing has an unfortunate reputation for being unwieldy. Managing hundreds of individual relationships and tracking links was a labor-intensive process, a hard sell against channels that can have campaigns go live in a few clicks.

But this reputation is outdated. Thanks to advances in automation and improvements in integration by publisher networks and dedicated affiliate programs, affiliate marketing campaigns can be set up and scaled as easily as any other programmatic buy.

Modern affiliate platforms now handle everything from partner discovery and vetting to real-time attribution and automated payments. Advanced algorithms dynamically adjust bids toward a target cost per action (CPA), automatically filtering out irrelevant traffic and ensuring a stable ROI without the need for constant fine-tuning.

Thanks to advances in machine learning, these models constantly “learn” from prior performance, becoming more accurate and requiring less manual intervention the more they are used. These continuous optimization loops refine commission allocation and partner prioritization over time.

Such technological evolution allows even smaller brands to launch wide-reaching affiliate campaigns in a few clicks. With the heavy lifting handled by automation, marketers are left free to focus on high-level strategy and creative direction, the qualities that technology can’t replace.

Modern affiliate marketing is as effective as ever, while also being simple to set up and providing a free boost to GEO. It’s a channel almost as old as the internet itself, but its newest iteration is truly made for the moment. I think every marketer should reconsider whether it might be an effective part of their media mix.

Forbes Agency Council is an invitation-only community for executives in successful public relations, media strategy, creative and advertising agencies. Do I qualify?