Existem Affiliate Management

Launching a new and successful affiliate programme.

I have decided to write an article to help new merchants get into affiliate marketing using my knowledge and experience about the industry.

Please remember that it is vital to the success of any affiliate programme to consider all options available to you.

I hope you will find this guide useful to have a successful affiliate programme:-

Introduction:-

What is affiliate marketing:-

Affiliate marketing is the promotion of a merchant’s products and/or services by a 3rd party on a pay-for-performance basis. In practical terms this means a 3rd party website marketing your services and being paid for registrations / sign up’s to a service via links and advertising creative served by an affiliate network on your behalf. The key players and relationships are defined as follows.

• The Merchant

The provider of a product or service that can be marketed online via affiliates. It is important to consider that your proposition must be understood and recognised by sufficient online customers to generate a large number of sales. This increases the likely viability of any affiliate marketing and will encourage affiliates to market on your behalf. You are responsible for determining commercial policy and ultimately ensuring that affiliates and networks are paid for their parts in generating sales.

• The Network

The networks provide the infrastructure of affiliate marketing for the vast majority of affiliates and merchants. For a merchant they provide a means of communicating their creative, commercial terms and marketing message as well as providing a means of monitoring sales, statistics and the financial infrastructure. The network is remunerated in a number of ways. They will usually charge a set-up fee, a monthly administration charge and what is called an “override” of 30% of the amount earned by the affiliate. For example if an affiliate was to receive £10 for a sale then you would be invoiced for £13, with £3 being retained by the network. The charges of a network do not in any way reflect quality of service and at best as a smaller merchant you will receive minimal support and will need to take a proactive stance in order to achieve full potential. Networks may be generalists, specialise in niche areas or be aimed at driving short-term campaigns for vouchering, registrations or brochure requests. They also enjoy varying reputations with affiliates and as such it is important to consider a number of variables when selecting a network.

• The Affiliate

The affiliate is key component of the process and, as such, actively cultivated both by merchants and networks alike. They generate their income from undertaking search activity and creating contextually relevant websites that generate organic search traffic and deliver targeted traffic that will be responsive to merchant offers. They are highly skilled at Search Engine Optimisation (SEO) and/or understanding exactly how to extract maximum returns from PPC activity. Often they are more skilled than so-called experts and as such may deliver greater returns for clients if allowed to administer PPC activity without restriction. They obviously generate their income from sales commissions generated. An emergent class of affiliate that can also be useful are those that offer their visitors discounts, incentives and / or cash back for their activities. For certain merchants a sale is a sale, however for those looking to use affiliate marketing for lead generation then the use of such sites as affiliates requires consideration. As a rule of thumb about 90% of sales will be generated by the top 5% of affiliates. Most top affiliates will belong to the majority of affiliate networks as they will always be looking for new offers. They will select merchants on the basis of their commercial offering and policies and will not promote merchants who they perceive to be paying at a low rate or who fail to provide a user experience that maximises the chance of generating maximum sales.

Website Considerations

As a rule of thumb anything that would upset you as a user of a website is something that would annoy an affiliate with a couple of additional factors to consider. Affiliates will look for sites that are clean, fast to load and with a good user experience as well as clear site navigation and a prominent call to action i.e. where and how a customer can buy or obtain more details. They will look for shopping carts / application procedures that are logical, quick and easy to use as well this will maximise the chances of buying. A full range of commonly used payment methods should be present, enabling the use of debit cards, credit cards and increasingly alternatives such as Paypal. For any website a telephone number may be useful to help customers who need additional help in ordering, however this is something that should be available only in the contact us section for affiliate marketing campaigns. Also it is important that you have clear privacy and return policies to reassure customers and differentiate themselves from lesser competition.

Do’s

No telephone numbers (Except in contact us page)
Full range of payment options
Logical sales process / shopping baskets
Short application forms
Lightweight quick to load site pages
Clear navigation and call to action

Don’ts

Slow loading pages
Limited payment options
Poor navigation
Long sales process / complicated forms

These issues (in common with all the don’ts) lead customers to exit the sales process and reduce the merchants overall conversion from visit to sale. This is something that is of concern to affiliates as it reduces the value of their traffic.

Existem Affiliate Management works with clients to ensure that their affiliate offering is optimised to ensure that it will appeal to affiliates and increase their uptake and sales.

• What Makes you stand out from the crowd:-

Communicate with your affiliates.
Pay on time
Easy to understand commission structure
Validate Quickly
Look at your site from a customer’s point of view and see how easy it works, and change to make better
Think of your affiliates as part of your sales team (let them know what is happening, promotions etc)
Monitor your commissions to make sure you are competitive.
Monitor your prices to make sure you are competitive.
Build good relationships with affiliates.
Provide as many tools as possible for affiliates.
Pay a good fair commission.
Keep your commission and terms consistent.

Who are Affiliates?

Affiliates are the engine of affiliate marketing and can be aloof and engaging in equal measure. Affiliates make their living by generating sales commissions from web traffic generated by various means. They should not be underestimated in so far as they are in many cases at the cutting edge of understanding user behaviour and trends in e-commerce. It important to understand the methods employed by affiliates, as well as their likes and dislikes in order to ensure that your commercial proposition will succeed.

• Likes / Dislikes

Simple application forms and sales processes that offer the user a quick and easy path to obtain their desired product or service.

It is also important that your product or service is available to a wide audience and where possible be applicable to the entire geography of the UK as this minimises wasted traffic.

They also will more readily promote “clean” sites without phone numbers as this maximises the probability of users they send completing their transactions online rather than completing offline and not being credited to the affiliate.

Affiliates also like sites that are quick to load and well designed.

Affiliates measure their success in terms of their Earnings Per Click (EPC) – which is the commercial return they get from the number of clicks their activities generate.

Affiliates appreciate commercial freedom and competitive commissions as this enables them to maximise their earnings as it incentivises them to try harder on your behalf. An open PPC policy is preferred (if you aren’t yourselves bidding on your own brand) as it doesn’t restrict the activities of the affiliates. Changing commercial policy is also something that affiliates do not like. It is easier to start low and go high than to cut commissions, similarly it is unfair to allow affiliates to build a brand by PPC and site marketing and then restrict what they can or cannot do at a later date.

As mentioned affiliates fall into a number of categories:-

• Search

These will tend to be old school affiliates who have built themed websites around content areas relevant to merchant offers. They may also be very well established category sites that by virtue of optimised content enjoy visibility in natural search results for popular searches. They will tend to be pages containing content optimised around links to a product or service and have one or more links to relevant merchants. Affiliates will require traditional creative types such as banners and buttons as well as product feeds in the case of retailers so they can construct the most comprehensive sites possible. Product feeds are also useful for affiliates who have developed some sort of search or comparison functionality into their sites

• Paid Search / PPC

Large numbers of affiliates will take a more direct approach to driving traffic using paid search such as Google, MSN, Yahoo (Overture). They purchase traffic on certain keywords at a given price on the assumption that for the money spent on driving traffic they will make a greater return via sales commissions, Their ability to do this depends upon the market sectors in which they work and their ability to bid on a merchants brand terms. They will supply highly targeted traffic via links that will go straight to the item or application form of a merchant and provide a good user experience. Affiliates can often generate greater sales than the merchants themselves via PPC and as such it is worth considering whether an open PPC policy to affiliates is more efficient than running an in-house campaign and restricting affiliate activity.

• Incentive / Cashback / Discount Sites

Affiliates have also recognised the power of capturing user data and permission based marketing via e-mail newsletters. Affiliates running sites of this type are aggregating offers such as discount codes, special offers and free offers and building websites that appeal to users who are looking for specific information. Others go further and split the sales commission with their members. These sites can be very powerful drivers of sales and registrations.
Examples:-
www.greasypalm.co.uk
www.cantbarsed.co.uk
www.ipoints.co.uk
www.freefivers.co.uk
www.discountcodes.co.uk
www.freeukstuff.com
www.loquax.co.uk

Commercial considerations

Before undertaking any affiliate marketing activity is important to have a very clear understanding of the financial model as well as a well constructed policy that has sufficient flexibility to encompass incentives and other promotions without breaking any acquisition budgets. The considerations are broken down as follows. A good management agency will assist in the drafting of such policies through benchmarking against similar offers and experiences to ensure that they can be as complete as possible.

• Valid action

The valid action is what is tracked and invoiced upon. It may be anything from a registered sale, an application for a service or something as simple as an e-mail address with permission to mail. It needs to be something qualified – for example in the case of an application it would need a genuine contact name, address and postcode and telephone number that were found accurate on contact. There is a balance to be had between over strictness and expedience, however it is better to relax rules than to tighten them later.

• Commission levels

Commissions are often dictated by similar merchants that are already in the marketplace, making it difficult to pay more or less than the accepted rate. Merchants with a unique offer benefit from having more freedom, however affiliates will seek to achieve something between 5 to 15% of the value of a good or service depending on what is understood to be the margin. Services tend to have higher margins than ultra-competitive retail products. It is important to factor into the affiliate marketing budget the fixed costs of affiliate networks and their override as well as the flexibility to drive and incentivise increased sales through higher affiliate commissions or unique discounts where necessary.

• PPC / Brand policy / Policing

As stated affiliate marketing can build brands as well as drive sales. Affiliates are very keen on a fair ppc policy as it drives traffic with high conversions and requires little effort on their part. You can view this in 2 ways. It can be perceived as very negative as it takes control away from the brand in the way brand messages are displayed. Alternatively you can impose no limitation on affiliate PPC activity. This policy effectively out sources your PPC marketing budget whereby you take no risk and only pay for sales generated. In the case of retail clients with large product ranges the provision of a product feed is essential enabling affiliates to deliver traffic to specific products to maximise sales.

• Marketing Plans (Seasonality / Promotions / Incentives)

It is important to have an outline marketing plan to anticipate seasonal sales peaks with relevant creative and affiliate incentives to ensure that your message is fresh and being actively promoted. Similarly you will be looking to incentivise customers (popular with affiliates as it increases conversion) as well as affiliates to deliver increased sales through bonuses and tiered commissions. Providing materials to make it easier for affiliates to promote you is crucial. As previously mentioned ensuring creative is available that is relevant and refreshed, product feeds (where appropriate) as well as discount vouchers and newsletter creative that affiliates can use to send to their user base.

• Internal commitment / costs

Last and perhaps as important as any other aspect of affiliate marketing is the internal will to maintain focus and commitment. Programmes require time an effort as well as expertise and for small to medium merchants often fail to achieve their full potential due to lack of time and resource rather than an inherently bad product or proposition.

Existem Affiliate Management can offer outsourced resources at the launch of programmes as well as ongoing support to ensure that initiatives are implemented and programmes are monitored. Our service is designed to provide a cost effective substitute and or/ support for internal staff on an ongoing basis or interim management and training whilst recruitment occurs.

If you would like further information please feel free to contact:-
Mark Russell
www.existem-am.com
0870 8031366
07971 199909
mark@existem-am.com