Maximizing the ROI of an Affiliate Marketing Program

Marketing is all about reach and engagement. It’s highly ineffective to have one without the other. And in today’s crowded and noisy online world, trying to reach and engage with the right people at the right time can prove to be enormously challenging. However, a well-developed affiliate marketing program could be the answer.

Marketing is all about reach and engagement. It’s highly ineffective to have one without the other. And in today’s crowded and noisy online world, trying to reach and engage with the right people at the right time can prove to be enormously challenging. However, a well-developed affiliate marketing program could be the answer.

What Is an Affiliate Marketing Program?

“Simply put, affiliate programs, also called associate programs, are arrangements in which an online merchant website pays affiliate web sites a commission to send them traffic,” entrepreneur Tom Harris writes. “These affiliate websites post links to the merchant site and are paid according to a particular agreement. This agreement is usually based on the number of people the affiliate sends to the merchant’s site, or the number of people they send who buy something or perform some other action.”

For the most part, online chatter focuses on affiliate marketing programs from the affiliate’s perspective. However, it’s actually far more beneficial for the business.

Here are a few of the business-side advantages:

  • Performance-based. Because affiliates are paid commissions only after successfully completing the desired action, there’s little financial risk on your part. Affiliates must perform in order to get paid, which leaves you in a desirable financial situation.
  • Increased exposure. Your marketing team can only do so much. When you have affiliates connected to your brand, you gain increased exposure and access to new audiences outside of your normal reach.
  • Third-party validation. It’s one thing for you to make claims on your website or in your marketing campaigns. It’s much more credible when someone outside of your company validates the things you’re saying.

How to Launch a Successful Affiliate Marketing Program

Clearly, there’s immense value in running an affiliate marketing program. But not all affiliate marketing programs are highly successful. To ensure you reap the full benefits, you’ll need to successfully plan and execute. Here are some tips and pointers:

1. Get Cozy With Your Numbers

The first thing you have to do is review your numbers and see how much of the pie you’re willing to share with affiliates. This is an important factor for multiple reasons. You need to give up enough to motivate affiliates to feed you traffic, but not so much that you hurt your bottom line.

Affiliate marketing rates typically run anywhere from 5 to 30 percent (with most landing around 10 or 15 percent). You’ll have to determine whether these percentages are worth parting with.

2. Join an Affiliate Marketing Network

When launching an affiliate marketing network, you have two options. You can either set up your own tracking software and system — which requires a lot of time and work — or you can get set up with an affiliate marketing network. Most companies go with the latter.

“[Affiliate marketing networks] provide a marketplace where your affiliate program will be advertised to other affiliate marketers,” Shopify explains. “They also provide the tracking software for your affiliates so you don’t have to build your own tracking system.”

3. Recruit Affiliates

With all of the work you put into starting an affiliate marketing program, it’s important that you have affiliates in the program. In the early days, recruiting affiliates should be a major focus. Some will find you via your affiliate marketing network, while others will require some courting. Loyal customers are a great place to start.

4. Keep Them Happy

Finally, you need to keep affiliates happy and satisfied so that they’ll continue to promote your products. In addition to attractive commission rates, you may also offer other benefits and perks to those who stick around.

Maximize Your ROI

It takes a lot of strategy and creative energy to run a successful affiliate marketing program. However, most brands discover that the benefits far outweigh these upfront costs. Use this article as a guide to get to started and continually look for ways to scale and improve. Three to five years from now, you could look up and see a totally different business with greater reach, higher profits, and more opportunities.

Coupon Affiliate Websites: Marketing Tips for Success and Pitfalls to Avoid

Marketing with coupon affiliate websites might be the strategy you need to attract audiences that convert — especially if you’re not getting the results you’d like from digital advertising. But you’ll need to make sure you’re forming relationships with the right type of sites, optimizing coupon redemption processes on your end, and avoiding the bad sites along the way.

Not getting the results you’d like from your digital advertisements? Marketing with coupon affiliate sites might be the strategy you need to attract audiences that convert.

Instead of pay for impressions or ad clicks, affiliate marketing uses the cost per acquisition (CPA) model. So when you partner with a coupon website, you’ll only pay for your coupon placements when someone actually uses the coupon and converts into a paying customer.

It’s an effective way to optimize conversions and ensure ROI from your marketing efforts, as long as you avoid some common pitfalls and follow these tips for success:

Find the Right Sites to Work With

Finding potential coupon affiliate sites to work with is easy if you go through an affiliate marketing platform like Commission Junction, Shareasale, or LinkShare. Search these popular networks and you’ll find there’s an overwhelming number of coupon sites out there who’d love to get commission from your business.

Here’s an overview of the main types of coupon affiliate sites you can work with today:

  • Traditional coupon sites — Sites like Groupon, Savings.com and other generalized discount sites that promote all available coupons.
  • Curation-driven coupon sites — Sites that feature daily deals, such as Tech Bargains and DealsPlus.
  • Coupon forums — Open source forums where anyone can post coupons, such as Slickdeals.
  • Cash-back coupon sites — These sites pay back customers part of the commission they receive from publishing your discounts. Ebates is a popular example.
  • Browser extensions — Some coupon sites (e.g. Honey) now offer browser extensions that automatically find and apply coupon codes for you when you shop online.
  • Bloggers — There are plenty of niche bloggers that focus on providing ways for their audience to save money through couponing, such as Coupon Mom and Hip2Save.

Any of these kinds of coupon sites could be valuable for your affiliate marketing efforts, as long as you evaluate them thoroughly before working together.

Build a Relationship With Your Coupon Affiliate Sites

Once you do find a few worthwhile coupon affiliate sites to work with, start communicating with them directly to build a closer relationship. Instead of investing in a variety of platforms, get to know two or three that you can really work well with to drive new sales traffic.

Try to get to the point where you can negotiate placements of your promotions on the homepage, in their email newsletter, etc. You can usually negotiate special distribution deals by offering an increased commission. Tactics like this will maximize the value you get out of investing in just a few affiliates to promote your discounts.

Optimize the Coupon Redemption Process

When you offer promo codes to encourage sales, they can be both a help or a hindrance to the conversion process. If you want to have a promo code box as part of your checkout, make sure you eliminate barriers to using it.

Some shoppers will reach your checkout without realizing there are even any promo codes available, and then abandon the process to go search for one. Make this easy for them by having a designated page on your site that displays all your promo codes as well. Include a prominent link to it near your promo code box. That will discourage customers from heading off-site in search of discounts for your brand.

Programmatic Marketing Demystified for Direct Marketers

Programmatic marketing is tailor made for direct marketers. Why? Because direct marketers know the identity of our customers and opt-in prospects and that data can be matched with browser IDs. Matched customer data takes online advertising beyond retargeting. After clearing away the techno-speak, what you discover about programmatic marketing, or real-time bidding (RTB), is a hidden opportunity for direct marketers. With a 35 percent growth rate projected in the next three years, programmatic marketing is an online opportunity every direct marketer

Programmatic marketing is tailor made for direct marketers. Why? Because direct marketers know the identity of our customers and opt-in prospects and that data can be matched with browser IDs. Matched customer data takes online advertising beyond retargeting. After clearing away the techno-speak, what you discover about programmatic marketing, or real-time bidding (RTB), is a hidden opportunity for direct marketers. With a 35 percent growth rate projected in the next three years, programmatic marketing is an online opportunity every direct marketer needs to become versed in.

My hunch is that a lot of direct marketers are lost, either trying to grasp how programmatic marketing can be practically used by them, or if it’s even worth exploring. I’ve recently investigated and researched programmatic marketing for a client to determine if it made sense for them. In the process, I discovered something that suggests direct marketers have a leg up as users of real-time bidding.

I’ll explain how the opportunity for direct marketers works in a moment. But first, let’s review a few fundamentals about programmatic marketing and how real-time bidding enables it to work.

  1. Programmatic marketing is where you establish automated business rules (who is targeted, and with what ad) so you can quickly and efficiently target your most valuable prospects and prospective customers.
  2. This targeting enables you, the marketer, to serve your prospects and customers with digital ads.
  3. Programmatic marketing is a strategy, or a marketing process. Real-time bidding (RTB) is the tactic that enables programmatic marketing methods to work.

Unlike most banner ads that are indiscriminately shown to anyone on a certain website, the goal of programmatic marketing is to eliminate wasted impressions. That is, you only want your ad to be shown to users who have, based on prior online behavior, indicated a likely interest in the category of the product you’re marketing. Through sophisticated tracking systems, in just milliseconds a bid is processed (based on prior web behavior and other attributes) and the ad served in “real time.”

How does RTB enable programmatic marketing?

  1. Ads are served to people based on online surfing. A person using a search engine with the keywords “investment opportunities” or “new mortgage,” is known to be searching for these topics. Those individuals will see ads on certain websites (even those websites that aren’t in the investment or mortgage business) related to the search terms they just used. These are search retargeting ads.
  2. Another powerful feature of RTB is when an individual visits a site and moves on to other places on the web. When that happens, the user sees ads related to a site they just visited. Those are site retargeting ads.

But beyond ads being retargeted to someone based on behavior, programmatic marketing offers a third hidden opportunity for direct marketers. In this case, ads can be served to your customers without them having searched, or even visited, specific types of sites.

Some advertising technology companies will connect you with a third party firm who can match the names and addresses of your customers and known opt-in prospects to their online browsers (e.g. Internet Explorer or Apple’s Safari). The third party firm will a) remove personally identifiable information (called “PII”), and b) append to your customers or known prospects their browser ID. (To emphasize: personally identifiable information is removed from your list during this process. Codes are assigned to your list so that no names can be tracked back and the user’s privacy is maintained).

The result? Your ads can appear online to your customers or known prospects.

“Typically, around 50 percent of a direct mail list can be matched to online browsers,” says Frost Prioleau, CEO at Simpli.fi, an advertising technology firm. “This enables advertisers to communicate with their known prospects through online display advertising across a wide range of web sites, enhancing their brands and driving incremental sales.”

Looking at this another way, it means that whenever your customers or known prospects are on websites that show banner ads, your ad will be shown (or served) so your customers and prospects can click to a landing page with an offer reserved for them. You can even split versions of ads so customers see one ad, linking to a landing page for them, or you can use a different ad for opt-in prospects with a landing page and offer for them.

This is a significant hidden advantage of programmatic marketing for direct marketers. That is, your customers can see your ads without being retargeted based on search or sites they’ve visited.

Ads served to your customers or known prospects can be more powerful than only retargeting for the simple reason that a current (or former) customer will be reminded of your company every time they’re surfing websites that accept ads. If you have been marketing to them by direct mail, email, or other channels, this is one more opportunity for you to be on their radar screen when they may be researching competitors, or have simply reached the tipping point decision to get more information or buy.

6 Insider Secrets to a Winning Affiliate Marketing Program

Affiliate marketing has been a viable way to help build ancillary revenues by having someone else market your products. It’s generally cost effective and could involve little work. You can go about this through affiliate networks, such as Commission Junction or LinkShare, or simply start an affiliate program on your website and track sales and commissions with affiliate software, such as DirectTrack. Software costs could range anywhere from a few hundred to a few thousand dollars … depending on how robust you’d like your features.

Affiliate marketing has been a viable way to help build ancillary revenues by having someone else market your products. It’s generally cost effective and could involve little work.

You can go about this through affiliate networks, such as Commission Junction or LinkShare, or simply start an affiliate program on your website and track sales and commissions with affiliate software, such as DirectTrack. Software costs could range anywhere from a few hundred to a few thousand dollars … depending on how robust you’d like your features.

But before you start, make sure you know the critical elements to help grow your affiliate program:

1. Promotion. This is where you’re promoting your actual program on targeted locations, as well as recruiting affiliates to market your program. You’ll want to make sure you list your program on all the top affiliate directories, networks, forums, associations, bulletin boards, websites, listings and blogs (and, by the way, many of these sites are free!). You’ll also want to leverage free classified sites such as Craig’s List, as well as social marketing sites like LinkedIn, Twitter, Facebook and YouTube. And, of course, don’t forget to create powerful online press releases (free or paid) promoting the program’s launch and any other noteworthy milestones. Some of my favorite paid and free distribution services are free-press-release.com, PRlog.org, PRWeb.com and PRBuzz.com. You can also distribute these press releases through social marketing and bookmarking sites, including the aforementioned as well as Digg and StumbleUpon. There are many more cost effective ways to promote your program. Just be a strategically creative thinker and the sky’s the limit!

2. Site Awareness. It will be hard to promote your program to a site that doesn’t have a decent Web traffic rank or Web traffic (visits). If your site has poor traffic, a professional affiliate marketer will look at it as a lost opportunity. It will only make his job harder. So make sure to deploy SEO/SEM tactics to improve your site’s presence and traffic before you launch your affiliate program.

3. Online Store. Make sure you know which are your best-selling and most universally appealing products. Those are the ones you’d want to have in your affiliate program. You should also have varied price points. You don’t want to pick prices too low as, after the affiliate split, there won’t be anything left for your own profit. And you don’t want to pick prices too high, as most of these leads are cold, it will be a harder sell. A good range is generally $69 to $300, depending on the product and benefits.

4. Affiliate Rewards. Decide if you’re going to pay out per lead (CPL) or per sale. Decide if you’re going to have a flat commission rate or a tiered system. Do your competitive research and see what other, similar affiliate programs are paying out. You want to be competitive, as that, besides brand recognition, will be your two strongest areas of appeal to a potential affiliate. Some of the best performing programs on the Web are offering a commission of 25 percent of the product price. So do your due diligence for commission rates.

5. Analytics. Make sure you have a robust reporting system. You’ll want the ability to track underperformers and super affiliates, and reward OR incent accordingly. You’ll also want to know which creatives are performing the best and worst and, of course, how many sales and leads are coming in, as well as how long the lead is staying on the file and their lifetime value (sales).

6. Keeping In Touch. Top affiliate programs often have a newsletter or ongoing communication to keep their affiliates engaged … up-to-date on latest products being offered, special sales incentives, updates to program terms, and other newsworthy notes.

Affiliate marketing can help with most all of your online marketing objectives … lead gen, sales conversions, Web traffic, branding and buzz. Not having one could be detrimental to your business.

Affiliate Governance in Paid Search: Asserting Control to Boost Overall Performance

Your affiliate marketing and paid search programs are intrinsically linked. For instance, your brand uses paid search to generate leads, while at the same time your affiliates use paid search to generate leads for you. Paid search and affiliate marketing success often depends on integrating your paid search program with your affiliates’ programs. This can be accomplished through affiliate governance.

Your affiliate marketing and paid search programs are intrinsically linked. For instance, your brand uses paid search to generate leads, while at the same time your affiliates use paid search to generate leads for you. Paid search and affiliate marketing success often depends on integrating your paid search program with your affiliates’ programs. This can be accomplished through affiliate governance.

Affiliate governance requires a flexible operating framework that can be used to relay core messages to your affiliates. Affiliates manage their search efforts independently, yet must be directed to follow brand standards and best practices. Affiliate governance strategies help in two ways:

  1. they prevent affiliates from competing with your brand in paid search; and
  2. they foster brand/affiliate collaboration to boost paid search visibility.

Preventing Competition
Competing with your affiliates in paid search can raise cost per clicks (CPCs). It can also raise overall cost per acquisition (CPA). For example, your affiliates could be generating leads through paid search and charging you commission for those leads in situations where you should be generating the lead yourself, therefore avoiding paying said commission.

This not only inflates overall CPA, but also results in inaccurate revenue attribution, skewing the data needed to make future channel investment decisions. The affiliate network Atrinsic recently analyzed hundreds of advertisers running affiliate campaigns and estimated an average of 40 percent of revenue attribution per advertiser is inaccurate.

To avoid competition and attributing revenue to the wrong source, set some paid search ground rules for your affiliates. For example, prohibit your affiliates from bidding above you (or bidding at all) on your brand terms. While nearly all major brands prohibit most affiliates from bidding on their trademarked terms, the majority of brands do allow a few affiliates to have limited search privileges. This reduces competition, subsequently reducing CPCs. It also increases the possibility that searchers will click on your ad before an affiliate’s ad, potentially saving you a commission.

However, allowing affiliates to outbid you on particular brand terms can actually improve efficiency. For example, assume Old Navy is running a Groupon promotion. A person searching for “Old Navy coupons” probably isn’t looking for OldNavy.com, but rather a coupon site. They likely wouldn’t convert from Old Navy’s ad. Thus, Old Navy would improve efficiency by allowing Groupon to bid above it for “Old Navy coupons.” Searchers would land where they want, and Groupon — not Old Navy — would pay for the clicks. Of course, affiliate bid governance rules require a test-and-learn approach to determine which rules work best in each situation.

Once you’ve set the ground rules, ensure that affiliates abide by them. This requires affiliate-monitoring technology. Monitoring technology should be able to identify whether your affiliates are doing the following:

  • following bidding guidelines;
  • using your trademarks correctly in ad copy;
  • following landing page guidelines; and
  • fostering collaboration.

Affiliate governance not only prevents conflict, it fosters collaboration. The goal is to ensure that your brand dominates the paid search results for brand queries, pushing down potential competitors who are bidding on your brand. For example, search engines don’t allow advertisers to serve more than one ad per query. To supplement your one ad, organize affiliates to serve ads that promote your brand, boost brand awareness and drown out your competition. You can also increase visibility for generic queries by communicating collaborative keyword and messaging strategies to your affiliates.

Affiliate governance uncovers opportunities where affiliate marketing interests should yield to paid search interests, and visa versa, to boost overall search and affiliate performance. Overall success is therefore most likely achieved when you have one entity responsible for the combined performance of the channels. Ask yourself, “How can we integrate search and affiliate to increase overall leads, conversions and efficiency?”

In the end, performance is all that matters.

Affiliates: Redefining the Original Performance Marketing Channel

As the original performance marketing channel, affiliate marketing has been effectively driving performance-based sales since the mid-90s. But the characteristics of an effective affiliate program have changed dramatically over the years. Whether marketers choose a closed or open affiliate program, or optimize their program monthly or annually, they should view affiliates differently today than they have in the past.

As the original performance marketing channel, affiliate marketing has been effectively driving performance-based sales since the mid-90s. But the characteristics of an effective affiliate program have changed dramatically over the years. Whether marketers choose a closed or open affiliate program, or optimize their program monthly or annually, they should view affiliates differently today than they have in the past.

When evaluating the worth of any affiliate in any given program, ask yourself questions that consider the increasingly mobile, social and local reality of today’s online world. A few starting point questions include the following:

  • Do your affiliates actively work for you?
  • Do your affiliates develop content around your products/categories to improve natural search exposure?
  • Do they generate new traffic/users to your site, both online and offline?
  • Do they use social networks like Facebook or Twitter to encourage brand interaction?

In some cases, the onus falls on marketers to do more to empower affiliates — i.e., arming them with vital brand information to help them drive high-quality sales and more volume. That includes the following:

  • insights on what the best-selling products are;
  • seasonal issues to be aware of, including holidays;
  • dates of catalog drops;
  • seasonal product lines;
  • anything unique about the marketer’s products;
  • proven tactics that have worked with customers; and
  • the type of conversion rates typically experienced.

Marketers should proactively provide affiliates with this critical merchandising information to help them work effectively for their brands.

Give affiliates relevant and timely content, such as how-to articles, important/relevant trends and customer reviews. Provide affiliates with compelling creative assets, including valuable promotions and special offers. Offering great resources for content can help affiliates perform better on natural search and/or increase the clickthrough rate of an advertiser’s promotions by establishing credibility with prospects.

Likely the most substantial change affiliates have had to deal with in recent years is the emergence of social media. Social media has opened up many new opportunities for affiliates. Marketers should seek out affiliate partners that add value by actively embracing this new medium.

Social media offers affiliates an additional distribution channel to interact with consumers. Similar to brands, affiliates use social media to gain followers, generate traffic, distribute offers and promotions, and drive conversions for retailers. Social media enables affiliates to engage more with consumers than ever before, creating deeper relationships with consumers who opt in as brand advocates by becoming fans on Facebook or followers on Twitter. Seek out affiliate partners with loyal user bases; social media prowess often provides a good indication of this loyalty.

Careful consideration to these crucial questions will help marketers better understand which affiliates are their best channel partners and which might have the most untapped potential. After all, the original performance marketing channel is here to stay. Updating one’s view of the channel will help you remain strong and keep a competitive edge.

* Special thanks to contributing authors Leo Dalakos and Megan Halscheid of Performics.