Retailers and affiliate marketers alike are facing a crossroads. In today’s climate of squeezed margins, shifting consumer behavior, and rising acquisition costs, traditional approaches are falling short. But as highlighted in a standout session at Affilifest 2025 in Margate, there’s never been a better time for the affiliate channel to step up and prove its full funnel value.

In this blog, we’ll unpack expert insights from affiliate leaders at Charles & Keith, Growth HQ, and Incubeta, exploring how economic pressure is transforming affiliate marketing strategies and what affiliate managers, publishers, and retailers can do about it.

The Economic Squeeze: What’s Really Going On?

From interest rate hikes and inflation to fluctuating tariffs and reduced test budgets, retailers are under intense pressure. For affiliate marketers, this means one thing: do more with less.

“There’s more scrutiny, smaller budgets, and less appetite for risk,” noted Red Barrington, Affiliate Specialist at Charles & Keith. “But that creates a unique opportunity for affiliates to show real return on investment.”

Key economic forces affecting strategy:

• Reduced budgets for paid channels like Meta and Google

• Delays or freezes in new channel testing

• Increased pressure on performance and return on ad spend (ROAS)

• Tariffs impacting international expansion, especially for non UK brands

Affiliates Moving Up the Funnel (Finally)

A recurring theme? Affiliate marketing is breaking out of its bottom funnel box.

As Inez Miedema, CEO & Co founder at Growth HQ, explained, “Brands are starting to understand that affiliate doesn’t just mean vouchers or cashback. It’s a full funnel strategy that includes awareness and consideration too.”

How brands are going beyond last click:

• Partnering with publishers for mid and top funnel coverage

• Activating influencers and creators to educate customers

• Using PR/editorial style partnerships to earn visibility in “best of” listicles

• Combining CPA with hybrid fixed fee models for greater flexibility

This approach is especially effective in long consideration categories - luxury fashion, eyewear, and ethical products - where consumers are more cautious and discerning.

From Discount Dependency to Value Driven Offers

Retailers are launching more promotions, more often, to maintain revenue. But this “race to the bottom” in pricing comes with risks.

“You can’t discount your way to long term growth,” warned Red Barrington. “Once customers expect constant offers, you lose brand equity and the ability to drive urgency.”

Instead, smart affiliate managers are pivoting toward value led propositions:

• Free delivery

• Gifts with purchase

• Loyalty points or exclusive bundles

• Extended returns or try before you buy options

These can be tested quickly through the affiliate channel, using a mix of voucher partners, content creators, and loyalty sites. Not only do they add value for the customer, but they protect the brand.

The Budget Paradox: Stretching CPA to the Max

In a time when test budgets are frozen and brand managers are under intense scrutiny, affiliate’s pay for performance model has never been more attractive.

Claire Beishon, from Incubeta, summed it up:

“Affiliate offers risk mitigation, scalability, and agility. All at a time when marketers need it most.”

Why affiliate is uniquely positioned:

• You only pay for confirmed conversions (CPA)

• You can scale via paid search, social, or programmatic under affiliate terms

• It offers a channel to pivot quickly - critical in crisis moments like site outages or supply chain disruption

Yet, success here depends on educating budget holders. Many don’t understand affiliate timelines or attribution. As Barrington noted, “Switching budgets on and off like paid search doesn’t work. Affiliate programs need time to build and optimize.”

Full Funnel or Fail: Rethinking Affiliate Attribution

Attribution is still a major friction point. Leadership often looks at affiliate ROAS in isolation, without acknowledging that top and mid funnel efforts fuel bottom funnel results.

“If you’re only investing in bottom funnel publishers, you’re not adding any new demand,” Inez warned. “Your funnel dries up fast.”

Actionable tips to prove value beyond last click:

• Use affiliate platform journey tracking tools to show where partners assist conversion

• Track impressions, clicks, and time on site. Not just conversions

• Forecast ROAS at a campaign level, and tie hybrid fees to content value, not just sales

Ultimately, affiliate managers need to advocate for a blended strategy that balances CPA with strategic top funnel investments.

Agility Without Panic: Strategic Flexibility in Tough Times

Cutting commissions or pausing your program might save pennies now, but cost you pounds in Q4.

Barrington offered a cautionary note:

“If you slash commissions when you need your partners most, they might not be there when you come knocking again.”

Instead, smart marketers are:

• Reallocating spend from inefficient paid channels into affiliate

• Testing new value propositions in small partner segments

• Keeping consistent communications with publishers, even when budgets are tight

• Forecasting hybrid fees that maintain long term relationships

One Key Takeaway from Each Panelist

Red Barrington, Charles & Keith
“Focus on value, not just discounts. Test free delivery or gifts with purchase with affiliates to avoid damaging your brand.”

Inez Miedema, Growth HQ
“Think long term. When you switch off affiliate or influencer budgets, your partners move on—and they may not come back.”

Claire Beishon, Incubeta
“Use your affiliate partners. They have the agility and knowledge to pivot your strategy quickly and effectively when things shift.”

Final Thoughts: Don’t Just Survive - Thrive

If one message rang loud and clear at Affilifest Margate, it’s this: affiliate marketing is no longer just a discount engine. It’s a flexible, performance driven ecosystem that can drive full funnel value, if you let it.

As economic uncertainty continues, affiliate marketers must embrace:

• Smarter partner strategies

• Better education for stakeholders

• Long term thinking

• Creative value based propositions

• Real data to prove affiliate’s evolving role