In e-commerce and affiliate marketing, it's important to find ways to stand out and successfully promote products to succeed. One powerful strategy that’s become popular in recent years is using third-party funnels.
Shahbaz Khokhar, the CEO and co-founder of Venture Beyond, a growth marketing agency in the UK, has seen great results with this approach for his clients, helping them generate over $70 million in revenue. And in his presentation at the last Affiliate World conference, he laid out the entire game.
So in this article, we're going to show you how to successfully use third-party funnels to promote your affiliate offers or your own e-commerce products and also share the case studies from Shahbaz to prove how this interesting concept is working for his clients.
What are 3rd Party Funnels?
A third-party funnel is a marketing strategy where ads are placed on other experts’ or brands’ social media pages, and the landing pages are hosted on those experts’ or brands’ websites. In this setup, the initial ad post comes from an expert rather than directly from the brand being promoted. The expert builds trust with the audience by sharing valuable insights, comparisons, or personal experiences related to the product. Only after establishing this trust do they direct users to the brand's official page to make a purchase.
It’s more of like influencer marketing, but this time round the entire funnel, including the ad and landing page are all made on the influencer’s website. Now with this strategy, you are not only restricted to using an influencer, you can use a popular magazine or media outlet, an expert, blog, or any other trusted party in your niche.
This approach differs from traditional advertising, where the brand is the primary focus throughout the entire process. By using the authority and relatability of an expert, these funnels can be more effective at gaining trust and addressing any customer hesitations.
Imagine Dr. Hubermann, a neuroscientist and popular science communicator, shares a promoted video for a sleep supplement on his social media platforms, like Facebook, Instagram, or Twitter.
Instead of the brand owners or affiliates promoting their products directly from the brand’s social media pages, he creates content that discusses the importance of sleep, the science behind sleep health, and how certain ingredients can aid sleep quality.
In his posts, he provides valuable insights and personal experiences, which helps build trust with his audience. After sharing this information, he includes a link directing followers to his website where there is a written blog post explaining the product in details, then at the end there is a link to the brand’s official page, where they can purchase the supplement.
This strategy leverages Dr. Huberman's authority and credibility in the field of neuroscience, making it more likely that his audience will trust the product and feel confident about making a purchase.
When to Use 3rd Party Funnels
According to Shahbaz, third-party funnels work best for certain types of products:
- Products that rely on claims: This includes items like skincare products or supplements, where the benefits aren’t immediately obvious.
- Alternative solutions: Products like eco-friendly laundry sheets that replace traditional detergent. The third-party funnel can help explain this new approach.
- High-stakes purchases: Items that customers feel they need to research thoroughly before buying, like expensive home goods, significant gifts, or financial services.
On the other hand, products where the look is the main selling point, such as fashion or jewelry, may not fit well with this approach. Focusing on a third-party endorsement might take away from the visual appeal of those items.
Four proven 3rd party funnel concepts
There are several ways to set up a third-party funnel, but Shahbaz shared four effective concepts that any marketer can use:
1. "Top 5" Product Roundups: The 3rd party compares your product to 4 others in the category, highlighting the unique benefits, features and mechanisms that make yours stand out.
2. Direct competitor comparisons: Your product is stacked up against a well-known competitor. This works especially well if yours has similar features at a better price.
3. Category alternative comparisons: If your product represents a new way of solving a problem, compare it to the incumbent solution to help the audience understand the novel approach.
4. Narrative user experience: The 3rd party shares a detailed personal story of using your product over a period of time, such as a 4-week transformation or 30-day challenge. Specificity and relatability are key.
Other ideas to consider include listicles (like "7 reasons you need X"), stories from customers who switched to your product, in-depth product breakdowns, video sales letters, product quiz funnels, and catchy advertorials that lead to a landing page.
Choosing the right 3rd party entity
The person or brand delivering your message is just as important as the message itself. Shahbaz's agency often collaborates with doctors, subject matter experts, and relatable figures.
Doctors are especially effective because they must uphold ethical standards and avoid misrepresenting products. Their credentials convey authority and trustworthiness. Subject matter experts or thought leaders in relevant fields can also work well.
Sometimes, an "everyday person" can be the most relatable and trustworthy messenger. For example, a stay-at-home mom might be ideal for a baby product, or a college student for a productivity app. The key is to match the messenger with your target audience.
When working with third-party authors, Shahbaz suggests conducting a recorded video interview to capture genuine claims, evidence, and stories. This content can then be used to create advertorials that the third party approves before publishing. Paying them their usual hourly rate for the interview and being open about the process helps ensure everyone is on the same page.
The legal side of 3rd party funnels
A common question is whether these third-party funnels are legal. Major publications have been doing this for years, but the key is to use clear disclosures. It must be disclosed that the ad spend is paid for on behalf of the brand mentioned.
Without proper disclosures, it constitutes misleading advertising. The FTC can charge hefty fines of up to $50K per infringement. They observe cases over many months before bringing charges, so it's crucial to have disclosures in place from the beginning, especially when scaling spend into the millions per month.
Shahbazi's agency hired a dedicated compliance manager with experience in regulated industries to review all copy before it goes live to ensure it meets regulations. For clients spending at scale, every piece of copy is checked for compliance.
So it’s smart to hire a compliance specialist who understands FTC regulations and can review all marketing materials. It’s not worth risking your business over a small mistake.
Additionally, any claims about the product need to be truthful and backed up. Altering before-and-after photos, fabricating endorsements, or making false claims can lead to serious consequences. Stick to the facts and real experiences.
Strategies to maximize 3rd party funnel results
Shahbazi then shared some key strategies Venture Beyond uses to get the best results from third party funnels:
- Use agency ad accounts: Using agency ad accounts is a smart move when running 3rd party funnels. These accounts often allow you to use more aggressive claims in your ads, with a lower risk of getting banned since they usually have a better reputation with ad platforms.
Plus, when you spend at scale, ads from agency accounts often receive more lenient reviews from platforms like Meta. This additional oversight can help ensure that ads are compliant and less likely to face issues.
However, keep in mind that accessing agency accounts usually costs around 2-3% of your ad spend. Even with this extra cost, the benefits can be worth it, especially for larger campaigns.
- Continuously iterate landing pages: Optimizing your landing pages is essential for getting the best results from 3rd party funnels. By regularly testing different elements, you can discover what works best.
When deciding what to test, focus on these key areas:
- Claims and evidence
- Headlines and leads
- Expert authors
- Disclosure wording
- Competitor comparisons
- Main images
Interestingly, the design of the page is usually the least important factor. While a nice-looking page helps, the content's substance and the strength of your claims matter much more.
Here is an example of a landing page:
- Bulk test ad creatives: To find winning ad creatives, you gotta test a lot. Shahbaz and his team at Venture Beyond try to test between 50 and 200 new ad creatives per week for each client, hoping to get a 5-6% success rate.
Clickbait and engagement-bait creatives often do really well at lowering ad CPMs. But it's important to keep the ad and the landing page consistent, so the user has a smooth experience.
To support this high-volume testing, each ad creative strategist on Venture Beyond's team is in charge of making 30-60 new ads per week. This lets them test and find the best-performing creatives quickly.
This strategy can have a big impact. In one case, increasing from 250 to 750 new ads per month helped Venture Beyond grow a client's ad spend from $500,000 to $2,200,000 per month.
- Authority hijacking with product comparisons: Product comparison funnels are a great way to borrow the authority of well-known brands. By comparing the product you're promoting to popular competitors, you can tap into the trust and credibility people have for those brands.
One good trick is to play around with the competitors you list in spots 2-5 of the comparison. Swapping out these competitors can have a big impact on how many people click through to the brand's site.
This strategy, called "authority hijacking," lets you piggyback on the reputation of recognized brands while showing off what makes the product you're promoting unique. When you carefully choose the right competitors to compare against, you can make a strong case for why your target audience should pick your product over the others.
- Hiring a compliance manager: With tighter regulations on advertising, especially for 3rd party funnels, hiring a compliance manager is a wise choice. This person ensures all claims are backed up and that your marketing materials include the necessary disclosures.
A compliance manager can help reduce the risk of regulatory issues by keeping up with the latest guidelines. They can review your ads, landing pages, and other materials to catch potential problems early.
When hiring, look for someone with experience in regulated industries who understands the legal landscape of advertising.
Having a dedicated compliance manager gives you peace of mind, knowing that your funnels meet the required standards.
- Integrated growth team structure: To get the most out of 3rd party funnels, it's important to have a growth team that works together like a well-oiled machine. At Venture Beyond, Shahbaz has built a team with people from different areas, all working toward the same goal: making the funnels perform better.
The growth strategists are in charge of looking at the data and figuring out the overall plan for each funnel. They decide which offers and products to focus on and which funnel ideas to test.
The creative strategists have a different job. They focus on understanding how consumers think and keeping an eye on what competitors are doing. They use this info to come up with interesting campaign ideas that guide the creative process.
Media buyers are the ones who actually run the campaigns. They work closely with the creative team to make sure the ads and landing pages are in sync and optimized.
A separate creative production team takes the ideas from the creative strategists and turns them into actual assets. They use resources from studios, content creators, trusted people, and stuff provided by the client.
As the media buying campaigns run, they generate data that goes back to the growth team through dedicated data analysts and dashboards. This feedback loop allows for quick changes and optimization.
Shahbaz stresses how important it is to make this "figure 8" process as fast and smooth as possible. By making data, strategy, creative, and media buying work together seamlessly, you can see big performance improvements and grow successful funnels faster.
Conclusion
Third-party funnels offer a different way to promote affiliate offers and e-commerce products. By using trusted authors, these funnels can build more trust, credibility, and relatability than typical direct-response ads.
To succeed with this approach, it’s important to choose the right third-party messengers, create convincing case studies and comparisons, follow advertising regulations closely, and be flexible with testing and improvements.
While this method might not work for every product, third-party funnels can be especially effective for categories like health products, alternative solutions, and high-consideration purchases. As online competition increases, using the influence of third parties could give affiliate marketers and e-commerce brands a significant edge.
