What the Amazon affiliate rate cut means for your brand
What changed with Amazon’s affiliate program
In mid-April, Amazon made significant cuts to commission rates for members of its affiliate marketing program. Commission revenue through affiliate links is a major source of revenue for many online media entities from independent bloggers to major publications like CNET. If you’re not familiar with this type of marketing strategy, an affiliate program is a performance-based marketing initiative where an external partner (affiliate) is paid a commission for helping an online store generate sales. When you watch a video for “the ten best Bluetooth speakers under $50” there’s a good chance that the links in the description help the channel earn a commission for each sale generated. Here’s an example of affiliate links in a Youtube description:
Why the change matters for your brand
If you’re reading this, you’re most likely not a Youtube influencer who’s just had your revenue model slashed by 50-80%, so why should you care? For brands, the biggest impact will be seen in the second and third-order consequences of this action. For the past decade, affiliates have been responsible for generating a significant percentage of sales across a wide range of e-commerce platforms and have become a major component of many PR strategies. Brands have reaped the rewards from this as publications and influencers have considered product reviews to be valuable content. They can help generate direct revenue for the publication while also providing their readers with interesting content that encourages more time spent on-page. This time-on-page also helps boost ad revenue for the publication.
Seeing their revenue drop by as much as 80% in some categories will force these affiliates to re-evaluate their content plans and start looking for alternative revenue generation opportunities. While product reviews generate visits and will never completely dry up, with the revenue-generating potential of a “The ten best Bluetooth speakers under $50” now cut by up to 50-80%, we’re likely to see a significant drop in these types of posts as bloggers and media entities look for better ways to generate revenue.
As the supply of reviews shrinks, established brands and commodity amazon sellers alike will soon need to find alternative ways to generate brand awareness and drive traffic to product pages. An added layer of complexity is that, with consumers in North America confined to their homes, many traditional brand activation campaigns are on hold and the bricks and mortar locations that served as an additional source of revenue are closed, putting increased pressure on non-essential consumer product brands.
What we can learn
It will be interesting to see the chain reaction that this commission rate cut and more interesting to see how product marketers respond. Either way, we hope that it serves as an important reminder of the fragility of building livelihoods upon the platforms of others. When we learn to rely on Amazon’s referral program to generate sales on Amazon’s storefront that are then shipped through Amazon’s warehouse with Amazon’s logistics fleet, we might find ourselves becoming overly reliant on a system that we cannot control. How can we make sure we’re not leaving our brands in a vulnerable position? In addition to diversifying our contact points with consumers, it’s important to remember the value created by a relationship that extends beyond a single transaction.
What can’t be easily taken away from you is the benefit of brand recognition and the attention and respect you earn from your audience by consistently providing value to them and following through on your promises. Yes, a Google or Instagram algorithm might change overnight, making your message harder to find but if you’ve left your customers or audience with a reason to connect with you and enough places to do so, they will.
COVID-19: Perspective in a Pandemic
Product design comes from the unleashing of creative thinking based on an immediate need. It comes from within but is very much influenced by everything we see, hear, touch and experience. It has been this way since the beginning of time really.
As I sit here writing this, I have a torn ACL, torn MCL, and a fractured tibia. The damage was done over a month ago and there is no option for medical treatment at all. It’s not a medical emergency and in the larger scheme of things with what is happening locally and around the world, it is now seemingly insignificant. Before this COVID-19 outbreak, it would have been a different story and garnered much more attention.
The point is, as humans we focus our energy and effort on the biggest challenge or threat that we face at any given time. In the world of product design, it’s no different. When all is well in the world, we focus on creating products with new innovative features and functionality. Better, stronger, faster….more is better! We create brands with stories and beautiful elaborate packaging that offers a great “unboxing experience” for the consumer. For decades we have been spoiled. We live life in an effort to improve our surroundings and make a better world for our children. In the process, however, we seem to have focussed so much on ourselves. Me, me, me. Bigger homes, nicer cars with fancy new technology and features. More color options, more channels, on-demand. More frequent travel to explore all ends of the earth while still maintaining all the creature comforts we have come to enjoy as spoiled humans. Yep, we have slowly gotten so accustomed to “on-demand” products and services that we have slowly lost touch with the fundamentals of life. In an effort to make life easier and allow us to have more conveniences and more free time, we have actually created a world where we have less time. We are always connected with technology and are burdened with “things”. Rather than freeing ourselves in body and mind to truly live, we have essentially become prisoners of our own making. As a product designer, I can’t help but think about this.
It usually takes a very substantial event to hit home with us and make us re-evaluate life and what it’s really all about. For some, it’s a close call with an illness, maybe the death of a loved one or the loss of a limb. Perhaps a natural disaster. For society as a whole, it can be a world war or a pandemic. Something big….. really big. Bigger than all of us. Something that makes us all change our fundamental thinking and how we approach or lives each day.
Our studio is relatively small. Small enough that we were able to react and respond quickly to the pandemic. We made some quick changes and for over a week now, we have all been working independently off-site in our homes, away from the design studio. It does come with some challenges in communication, but nothing that we cannot adapt to. We had a video conference call as a group on Monday morning to touch base and review the many projects on our plates. It was exciting to see the faces of the team that I have missed seeing in the studio during this time of self-isolation. Yet another reminder that it’s not just about the projects or the products we design. Behind those products is a team of real people. People who see, hear, feel and experience life with friends and loved ones.
In a post-COVID-19 era, I have no doubt that our approach to product design will be modified.
Our thinking will most certainly have more of a global outlook that asks critical questions about the validity of what we are designing. We will be more experienced, more understanding and perhaps more humble in our views. There have been some very eye-opening moments over these past few weeks. Moments where we can all do some self-reflection and look at ways to truly focus on how we can all contribute to a better world, whether through product design or any other endeavour. Going forward, those efforts will surely have more purpose and meaning.
After the dust has settled from the COVID-19 pandemic, the world will be changed. It will surely be a different place with new challenges and renewed focus. I am a firm believer in the notion that through overcoming challenges and difficulty, we gain valuable insight and experience. The type of insight that leads to the creation of more meaningful products. Products that are designed with purpose and meaning. I am personally looking forward to the next chapter and am ready to take it on with renewed energy and an open mind.
Shape Products wins Red Dot: Product Design award for TAP
Toronto – Shape Products Inc. has won a Red Dot award: Product Design 2019 for its work with TAP – wearable keyboard and mouse. TAP receives an Honourable Mention, which the renowned jury awards for particularly well-executed aspects of design work.
TAP partnered with Shape Products to design a new wearable keyboard and mouse that is multifunctional and intuitive. The final product is a game-changing wearable technology that turns any surface into a touch keyboard. This wearable technology with its ergonomic design is comfortable and straightforward to use. The design language for TAP embodies extensive research in materials to achieve a form function that is not only comfortable to wear but has a high level of input accuracy. The light-weight and minimal design makes it ideal for VR/AR applications, as well as for the visually-impaired audience.
On winning an honourable mention in the prestigious Red Dot Product Design category, Shape Products Inc.’s Founder and President – Ron Tsang, said, “We are ecstatic to receive such a world-renowned award. This recognition of our extensive work in TAP’s design and production of the final product is a fitting testament to Red Dot’s high standards. I would also like to congratulate our designers at Shape and partners at TAP for this remarkable achievement.”
“Shape Products understood our design challenge and was able to deliver a product design that complements the complex technology within TAP. A product design that is not only appealing, durable and comfortable to use but is also futuristic in its vision.” said Ran Poliakine, Co-founder, TAP.
The Red Dot Award: Product Design is one of the world’s largest design competitions. In 2019, designers and manufacturers from 55 countries entered more than 5,500 products in the competition. The international jury has been convening for more than 60 years to select the year’s best designs and comprises experienced experts from different disciplines. True to the motto “In search of good design and innovation”, their assessment focuses on criteria such as the level of innovation, functionality, formal quality, longevity and ergonomics.
On 8 July 2019, Shape Products will celebrate its success during the award ceremony in Essen’s Aalto-Theater as part of the Red Dot Gala. At the subsequent Designers’ Night party, the Honourable Mention laureates will receive their certificates and TAP will join the exhibition “Design on Stage” in the Red Dot Design Museum Essen, which presents all of the award-winning products. From that date, TAP will also be on show in the Red Dot Design Yearbook, online and in the Red Dot Design App.
About the Red Dot Design Award
In order to appraise the wide scope of design in a professional manner, the Red Dot Design Award is broken down into the three distinct disciplines: The Red Dot Award: Product Design, Red Dot Award: Brands & Communication Design and Red Dot Award: Design Concept. With more than 18,000 submissions, the Red Dot Award is one of the largest design competitions in the world. In 1955, a jury convened for the first time to assess the best designs of the day. The name and brand of the award were developed in the 1990s by Red Dot CEO, Professor Dr. Peter Zec. Since then, the sought-after Red Dot is the revered international seal of outstanding design quality. The winners are presented in yearbooks, museums and online.
Further information: www.red-dot.org.
