Affiliate marketing can become a major source of traffic and revenue for your business. It has been and will continue to be an innovative acquisition channel that is evolving constantly.
Make sure you consider this channels when planning your marketing acquisition efforts.
For the ones that might not be familiar with this channel, in short, affiliate marketing is the activity where we initiate a relationship between an advertiser and a publisher (website-app owner). For the transaction of qualified traffic at different pricing models.
There are many types of affiliates and networks. I’ll do a quick overview of the main types;
Large partnerships
In some industries this has become a key channel where the business, have no option but to work with certain affiliates, and these affiliates have a massive power over the success of their clients.
Depending on the sector, affiliates have taken a predominant role filling up the top of the funnel and becoming the door to specific products and services. Examples of this are the “meta-search” partners and price comparison sites. Very relevant in industries such as travel, job search or retail, with well known brands such as Skyscanner, Trivago, Indeed or even Google Travel.
For this kind of relationships where volumes are high, businesses tend to negotiate specific deals on a CPC, CPA, CPL or even at a % sales commission basis. It is up to their negotiation abilities that they will achieve specific prices and conditions.
The benefit of using this kind of agreement-partnership Vs a stablished network is that business will be able to tailor specific deals with each of the partners customising all aspects of the agreement, from commissions, product integrations, cookie length, payment terms, among other.
To run a partnership, you might still want to use a platform to manage these such as Partnerize, Impact or Tune, these will take a commission for every conversion, but provide the infrastructure to run the campaign under specific terms and provide unbiased neutral or audited reporting. One of the main benefits of these type of platforms is that their commission is also Lowe than any other popular affiliate network.
Popular affiliate networks
The most popular way to access affiliate marketing from the side of the advertiser or the publisher is through affiliate networks. These will act as a middlemen platform where advertisers and publishers can meet and make a deal. Affiliate networks will usually take a commission from any agreement and will provide the technology to track and report whatever performance is achieved, in many cases also distributing payments.
If you are an advertiser, you´ll want to set up an account, and make sure you have:
- A clear description of your product
- Attractive set of creatives that editors can incorporate to their sites
- An interesting CPL or CPA commission model that can compete with other competitor who are in the network.
- Proof that you have good conversion rate and can drive revenue to your partners (Otherwise it might be likely that they will opt for a competitor).
- Negotiate your cookie length, this means you’ll agree with the network what is the time-window you’re considering for a conversion.
There are many affiliate networks, to name a few of the most popular; Commission Junction, TradeDoubler or Affiliate window.
Cash back and discount sites
If you are using promotional marketing to boost your retail sales or sell your stock, these type of affiliates will be a way to amplify this type of campaign.
These has been a popular type of affiliate that has been operating through internet, but might not be the right choice for anyone as they take a cut of your revenue on top of a discount that you are offering. Making the whole promotion challenging for a profit if there is not enough margin.
Examples of these platforms are: Groupon.com, coupons.com and the popular browser extension Honey.com.
For certain business it make a lot of sense to use this tactics, specially for season based products such as fashion or travel, or the ones that require stock clearance such as tech.
It’s worth mentioning you’re only considering using these tactics if they will be adding value to your overall marketing strategy. If you’re overdoing it, users will only be sensible to promotions.
Needless to say that if you’re selling a high value product or service you should avoid doing promotions at all. (what brand would be looking to associate with cheap luxury?)
Probably none. However, luxury brands do have their own ‘sales’ networks where they can get their stocks sold, these are labelled as private-sales platforms. These seem to be a more aprópiate channel for these kind of retailers. Examples of highly known platforms are vente-prive.com, secretscapes.com.
Influencers
Do not forget these are not a kind of affiliate network but it can be a significant type of publisher you might want to work with. Very relevant for specific industries such as lifestyle, fashion, travel or tech.
Be cautious, make your due diligence
If you´re not using the main reputable networks, and even in those cases, every time you onboard an affiliate you will need to validate them.
In some cases, and where margins permitting, there will be multi-level affiliate relationships, where different layers of affiliates will be working on top of each other, each one specialised on finding audiences and driving traffic to a final buyer. There is nothing bad on that but in some cases you want to be careful who you are buying the traffic from.
Indeed, this can become a bit of a shady business, where some clever individuals will use all sorts of creative ways to acquire very cheap traffic from different sources and try to generate revenue from it.
So be careful. Make sure your agreements with any affiliate and tests of new sources of traffic demonstrate honesty and transparency, sharing with you how and where they acquire their traffic. In any case, manual validation will be helpful. This will save you not only amounts of money but also the reputation to your brand. Just think about all those websites with sensitive content topics, you probably don’t want your brand to be associated with.
From drugs, adult content or even extreme political journalism. Or even those new mobile in ap and gaming advertising networks that will send incentivised teenagers to sign up to your newsletter for a relatively small amount of money. These account massive amounts of traffic and some affiliates are just waiting for an advertiser to drop the guard and sell their inventory.
Measuring your affiliate marketing activity
Some marketing managers won’t use Affiliates, because they believe this channel doesn’t really add much value and it can damage the brand. It has certainly earned some reputation. I do believe that if you do a good job choosing who you want to partner with there is a lot of value that this can add.
Measuring your affiliate network the right way will be very important to understand what value this channel is adding and where it fits in targeting your customer through their journey.
At the beginning it will suffice to use your affiliate partner standard tracking methodology, paying for last click conversions attributed in their time window.
As you progress to incorporate more channels, make sure you adjust the way you measure success proving that affiliate is really adding value and not cannibalising any of your other channel activity.
You can either look at running the partnerships and measuring them in an incrementally basis and you should also look at measuring this through the lense of multitouch attribution modelling.
Conclusions
The affiliate channel can be a good way to kickstart your digital acquisition activity with a hands off, low effort approach. This can certainly help you scale up quickly.
However, as this channel grows it will be very important to allocate the resources and human time to make sure that there is some sort of quality control of the partnerships you’re building with the editors.
This is certainly a channel that will continue to evolve over time. What is your experience using affiliate networks? Please share this in the comments below.
Cristian 360 