It is sometimes hard to find a comprehensive affiliate marketing guide. In this post I will cover the below sections:
- What is affiliate marketing?
- How to create an affiliate programme
- Types of Affiliates
- Affiliate recruitment
- Affiliate retention
What is affiliate marketing?
Affiliate Marketing is a source of online advertising which is, in my opinion, wrongly ignored by many companies. It is quite difficult to explain affiliate marketing without confusing people, that’s why a diagram is usually more apt.
Let’s use a real life example to make affiliate marketing easier to understand. Here are the steps usually followed to complete an affiliate sale:
- Jim Bob is a keen runner, he runs in all of the UK marathons and he also owns a blog where he writes about running.
- JD Sports approach Jim Bob and say “Hey Jim Bob, your readership would be very interested in our products, would you like to promote the brand?”
- Jim Bob obviously asks “what’s in it for me?”
- The JD Sports affiliate terms state that if Jim Bob sends a user to their site who buys a product, he will receive a percentage of that sale.
- Mary visits Jim Bobs blog and is reading a recent post about the London Marathon when she sees a JD Sports banner promoting the new Nike long distance running shoes.
- Mary clicks the banner, goes to the product on the JD Sports site and buys them for £60.
- As Jim Bob is on a standard commission rate of 10% he will receive £6 from that sale.
Make sense? I told you that it was confusing. At the end of each section I will outline a task to make this post more interactive and bring you on a learning journey (I know what you’re thinking, who says “learning journey”?).
If your company/client uses PPC and SEO, you do the math. For example your company offers its affiliates a commission rate of 4%. Your company makes £50,000 revenue from affiliate sales in May and pays its affiliates £2,000 commission. Would you make £50,000 revenue from £2,000 spend from PPC and SEO? If the answer is no then you should look at setting up an affiliate marketing programme, if the answer is yes then affiliate marketing can be another great revenue generating source to run alongside your PPC and SEO campaigns.
How to create an affiliate programme
It’s quite easy to create an affiliate programme. Firstly you must decide whether you are going to manage it through a public network or an in-house network.
The main advantages of managing an affiliate programme through a public network is that the admin is taken care of it for you, reporting and payments are formulated on your behalf, and affiliate recruitment is made a lot easier, as your programme is seen by thousands of affiliates. The downside is that you must pay an override on every transaction and the set-up fees can be quite steep.
With an in-house network, a merchant can offer higher commissions as they do not have to pay an override therefore affiliates may push the merchant to their customers more. The downside is that larger, super affiliates have strong ties with public networks. These affiliates will want to keep everything central, and as they have so many merchants you cannot blame them. The ideal situation is to run your programme on a public and in-house network where you can get the benefits of both. That’s if, of course, the programme is large enough and you have a large affiliate base.
Once you have chosen which network to host the programme on, all you have to do is create your profile page which affiliates will see, set a commission level or commission tiers, add a terms and conditions page and supply several creative images and text links which affiliates can use on their site. Remember to supply a logo, as the larger affiliates will only use a logo to promote the merchant.
You can also supply a list of deep links if you wish, but affiliates nowadays usually choose their own landing pages and add their affiliate tracking ID to the end of the URL. A list of products, part numbers and an RSS feed is also beneficial for affiliates. In the UK, from my experience, Affiliate Window is a superb public network to host your programme on. They have a huge affiliate base, a great and easy to understand reporting interface and very helpful account managers.
What networks have you worked with and what experiences have you had with them? Different industry sectors have industry specialist networks. Try and find out which network your competitors are on before launching a programme, as one network may have a wealth of e-commerce affiliates when you may want to target insurance affiliates.
Types of Affiliates
There are many different types of affiliates, and the key to running a successful affiliate marketing campaign is to have a good mix of the different genres of affiliates. I will briefly run through the different types of affiliates.
1. Pay Per Click
PPC affiliates are usually brought onto an affiliate programme in small doses; usually a bidding group is created so that it is easy to monitor activity. These affiliates can cannibalise the market for certain merchants, cost per clicks may be high in certain industries, therefore having 4 or 5 PPC affiliates bidding on the same keyword casts a merchants advertising net further. When accepting PPC affiliates onto your programme make sure to have watertight terms and conditions and be clear on brand bidding and direct linking. Some merchants allow affiliates to drive traffic straight to their site without having a landing page setup themselves.
2. Cashback Sites
Cashback sites encourage users to buy from a merchant, and the customer is then rewarded with a % of the commission earned. The two main cashback sites are Quidco and Topcashback as they give 100% commission back to the customer. Usually these sites also have an increased commission as merchants vie to get placement on these high volume sites. In certain cases, cashback sites make up for 75% of all affiliate sales.
3. Content Sites
Content sites are probably seen as the most valued genre of affiliate. These sites hold relevant content on the site to the merchant therefore users reading this content will have an interest in your product. For example the below site would be perfect for a company who supply running shoes.
4. Product Comparison
Product Comparison sites list a certain product and list the prices of the different merchants underneath which is usually automatically pulled in from a feed.
5. Voucher Code Sites
Voucher Code sites are the hub of the smart buyer. Huge savings can be made when using voucher codes and these sites are very popular. If you have a discount code feature on your site I suggest sharing this information with voucher code sites as some also have a social sharing feature which spreads the word about your deal. Your deal can also be rated by users and this increases social engagement.
6. Email Affiliates
Email affiliates are a dying breed in the affiliate industry but new technologies have seen a few re-invent themselves. The likes of VE Interactive who collect a user’s email data when they abandon at the checkout process have revolutionised the email affiliate genre. Instead of sending cold emails to a database of thousands they use targeted data from potential buyers.
What type of affiliate drives the most conversions to your clients? Is it worthwhile giving exclusive commission rates to these affiliates to promote the brand more?
Affiliate recruitment, in my opinion is the best part of being an affiliate marketing manager. Methods of affiliate recruitment have changed over the years as tools and technology has advanced. You still can’t beat a good old Google search to find a key affiliate but alternative ways have been exposed. Tools such as Syntryx allow an affiliate manager to plug a competitors URL into the system and returns all affiliates linking to the site. It’s a very expensive tool but worthwhile if managing a large affiliate client base.
For those budget affiliate managers, raising my own hand, we must find affiliates the knitty gritty way. I try and take full advantage of the affiliate directory supplied by the affiliate networks. I break them down into type of affiliate and sector. For instance if managing a travel affiliate programme I don’t only want travel affiliates on my programme but high volume cashback and voucher code affiliates too.
A new method which I have started using is to find a competitor with a good affiliate base. I then compile a list of their backlinks using Open Site Explorer and export them into a spread sheet. I then work out what the merchant ID of the client is, for example some networks use the parameters affid=????. Obviously insert the programme number where the question marks are. I then sort the thousands of URL’s leaving only the ones who have the merchant ID in there. Usually a site has multiple links to an affiliate site so I sort them by name as to not duplicate any work looking through these affiliates. Voila! You now have a list of your competitor’s affiliates.
It is also a good idea to post about the programme on the A4U Forum where affiliates “hang out”. If it’s a new programme be sure to be ready to answer a lot of affiliate queries such as “do you have a PPC policy?”, “is there a phone number on your site?” and “what’s the payment schedule?” etc.
Do you have any affiliate recruitment tips? What’s the weirdest affiliate question you ever had?
Once you have built a large affiliate base, your hard work is just beginning. A business usually has several competitors in a certain marketplace who are more than likely running an affiliate programme. You must think “what can I do to make affiliates promote my brand over my competitors?” The main answer is commission rates. Affiliates can be easily swayed to change allegiances with an increased commission rate and they are quite blatant about it.
“Dear Affiliate, your competitor is offering you 6% commission and we are willing to offer you 10%, do you mind changing your main banner on the homepage to ours please”…..no answer….checks site hours later…..banners changes. Commission rates, commission tiers, cookie length and competitions will all influence an affiliate’s decision to promote your brand.
Keep the programme fresh, run a competition for high performing affiliates, send out a monthly newsletter with deals and offers on products which can be used easily on the site, provide data feeds and just communicate and ask if there is anything you can do for them.
How do you keep the programme fresh? When was the last time you communicated with your affiliates and didn’t just answer affiliate queries?
Setting up an affiliate programme can be hard work but is also extremely interesting. Remember, choose the right network, get a good mix of affiliates on your programme, recruit your competitors’ affiliates and keep the programme fresh.