The Importance of Tenancy Strategy
Tenancy Payments
It’s common for affiliates to request a tenancy payment for running promotions that go beyond their usual exposure levels. For smaller businesses, large fixed-fee payments may not always be feasible, but adopting a “test and learn” approach can help. Testing tenancy payments in exchange for increased visibility can often lead to improved performance, making the costs more acceptable given the potential revenue uplift.
Budgeting for Tenancy Deals
Advertisers typically allocate between 5% to 20% of their annual affiliate budget to tenancies. Most of these payments should be negotiated with your top affiliates (often the top 10 performers) in exchange for increased exposure. Affiliates that drive higher volumes of traffic generally command larger tenancy fees. However, if you cannot secure deals with your top affiliates, consider offering tenancies to smaller partners who may also boost performance.
What You Get from Tenancy Payments
Top affiliates usually have a rate card or media pack that outlines the coverage options available in return for tenancy payments. These packages often include:
Featuring your brand on high-traffic pages (e.g., the homepage or key category pages)
Inclusion in newsletters to the publisher’s subscriber base
Additional social media promotions
Running paid search campaigns (with keyword terms agreed upon separately)
If possible, it is advisable to set aside a “test budget” specifically for experimenting with new ideas, publishers, or campaigns, making it a cost-effective way to explore opportunities.
Influencer Payments
Traditionally, affiliate marketing has been based on a “last-click” attribution model, which rewards the last affiliate that drove a sale. However, there is a growing trend toward offering additional payments for upper-funnel activities, such as social media or content creation, which may influence purchasing decisions earlier in the customer journey. These payments payments fairly compensate affiliates for their role in generating interest or awareness, even if they do not directly lead to a final conversion.
While the ROI on such upper funnel activity may be lower than what you will find elsewhere in your affiliate activities it is helpful to bear in mind that it should not be compared. Rather, you should look at what ROI you are getting from any other digital marketing channel you may be using to increase brand awareness. Offering these payments ensures that affiliates engaged in earlier stages of the funnel remain motivated to promote your brand.
Conclusion
Setting aside budget for tenancy deals can provide significant advantages, including greater brand exposure, enhanced trust, flexible partnership terms, stronger relationships, and significant additional revenue opportunities.
To learn more about what tenancy opportunities may be available for your program, contact your Webgains account manager or point of contact who will be able to support in exploring opportunities.