A Primer For Breaking Into Affiliate Marketing

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Synopsis – Affiliate marketing is a field that some search engine marketers are deeply involved in, while others dabble in it, and still others have no involvement. Over the last few years, it has evolved from a nascent industry where opportunities were at times suspect to a well-respected field involving sales of every product imaginable and sophisticated marketing techniques.

For those already involved in search engine marketing, there are two major approaches one can take to enter the field. One can become an affiliate directly or one can look into involvement in setting up and management affiliate programs directly. Geno Prussakov, in this informative article, provides details of four major aspects that one needs to be aware of and prepare for if you wish to become an affiliate, as well as guidelines to consider before taking the step of offering affiliate program management services.

As an added bonus, Geno includes the results of a poll he conducted of a group of affiliates, asking them to prioritize 15 factors that are important to consider when evaluating potential affiliate programs that you are interested in joining. Take advantage of the experiences of others and use this “15 Signposts To Success With Affiliate Programs” as a checklist for helping you decide on the potential of affiliate program offerings you are considering.

The complete article follows …

A Primer For Breaking Into Affiliate Marketing

While some search engine marketing experts are already actively involved in affiliate marketing, many still are not. The opportunity and potential is definitely there, and in this article, I would like to look at the ways in which both individual paid search marketers and SEM firms can become involved in the affiliate channel, leveraging their skills to achieve success on this new front.

There are two basic routes that an SEM expert may choose to explore when it comes to affiliate marketing: (1) becoming an actual affiliate, or (2) complementing their list of services with affiliate program setup and management. Let’s look at these two options in a bit more detail.

The SEM Expert As Affiliate

About a year ago, a director of a major European SEO and PPC management company informed me that close to 70% of his company’s revenues came from affiliate marketing. This didn’t strike me as particularly unusual, but may surprise some readers. The potential of affiliate marketing for those already involved in search engine marketing is truly enormous. With the growth of the mobile Internet, the opportunities are only going to widen.

If you do decide to go the route of an affiliate —- especially if you choose to focus on PPC marketing —- there are several important things you need to be aware of before getting your feet wet.

1.  Program Agreements — In late 2009, I launched an affiliate program where specific types of affiliate promotion were explicitly prohibited in a short and easy-to-read program agreement. Over 38% of affiliates did not read that agreement. I then conducted an anonymous poll, asking affiliates if they typically read affiliate program agreements prior to joining. The vote distribution came as a shock — more than half (57%) of respondents voted “never,” “rarely,” or “sometimes” on reading program agreements. Less than one-fifth (17%) responded “often,” and only slightly more than one-quarter (26%) said “always.” This is despite the fact that, at the end of the day, an affiliate launching a campaign in violation of the program agreement is the one who is going to lose (time, money, effort). Make sure you carefully review the program’s TOS (especially everything connected with PPC and SEO) prior to applying for an affiliate program.

2.  Narrow Focus — Remember that all metrics reported by affiliate programs are generally averages (i.e., the data is based on the performance of all affiliates in the program, and not broken down by cross-sections). Additionally, some important pieces of the puzzle may not be available. Consequently, you need to take extreme care in marketing aggressiveness.

A perfect example is the Earnings Per 100 Clicks (EPC) data, which most affiliate programs and affiliate networks make publically available. One assumption that can be costly is to merely divide the EPC figure by 100 for a “per click” earning, budgeting your marketing campaign based on the result of this basic arithmetic operation. Another mistaken assumption is that this is the maximum you will pay per click/visitor. Since the publically reported EPC is always an average, it gives you some information, but not enough for such important decisions. Your EPC will most likely be very different from the EPC of a coupon or a rebates affiliate. Don’t rush, and never base your marketing decisions on one metric, especially if the metric in question is an average.

3.  Landing Pages — A year ago, while reviewing coupon campaigns for over 100 affiliate programs, I discovered that more than 95% of merchants didn’t have dedicated landing pages for their offers. Instead, they landed all of their affiliate-referred traffic on their homepage. If you are going to bring affiliate traffic to your website, you need to be prepared, and be ready to put together your own landing pages to maximize conversion.

4.  Split-Testing & Improving — Again, it is surprising how many affiliates don’t properly test and measure their marketing campaigns. Those who come from an SEM background already will have an obvious advantage there. Remember to continue testing and improving on a regular basis.

In cases where a paid search marketer’s expertise is indisputable, merchants are generally open to handing over the management of their PPC campaign to you, working out an agreement where remuneration is generally tied only to performance. However, not many SEM experts are pursuing such relationships, often merely because they don’t know that such an option exists.

A sad situation, because in reality, such arrangements prove to be win-win scenarios — the merchant gets a paid search campaign managed by an expert, while the affiliate incurs zero investment. Both parties measure their success based on true performance (sales, leads, subscriptions, etc). More than once I have seen a partnership like this turn a PPC marketer into the best affiliate in the program.

The SEM Expert & Affiliate Program Management

Regardless of the seeming simplicity of setting up and launching an affiliate program, it isn’t a subject to be treated lightly. Any SEM firm may undoubtedly enrich the breadth of their marketing services by adding “affiliate marketing” to the list, but unless the depth is there as well, it can be a sure route to disaster. One particular problem is affiliate programs being launched, only to wind up being run on auto-pilot. Just as with any marketing campaign, an affiliate marketing program must be actively managed. Auto-piloted programs leave the door wide open to rogue affiliates, who will cannibalize a merchant’s other online marketing channels, and may even damage your client’s brand in the process.

So, if you do decide to add affiliate marketing to your roster of services, you should either have some of your staff thoroughly trained in the subject of affiliate program management or partner with an Outsourced Affiliate Program Management [O(A)PM] agency to handle the program management part for you. Affiliate program management will include such routines as affiliate recruitment, maintenance of a healthy communication channel (to answer affiliate questions and keep them up-to-date on merchant offers), policing of inappropriate marketing techniques (e.g., trademark bidding, cybersquatting, adware, cookie stuffing), ongoing motivation of active affiliates, stimulation of activation in stagnant ones, and much more.

Conclusion

SEM firms, and stand-alone professionals as well, can and should tap into the affiliate marketing channel — either as affiliates or as providers of affiliate program services. There is a huge potential market available for whatever type of involvement you ultimately decide on. However, as with anything, make sure you do a thorough and quality job of building the foundation of the affiliate marketing section of your business to ensure that further construction on this base is secure.

15 Signposts To Success With Affiliate Programs

When choosing an affiliate program, there are more than a dozen factors to keep in mind, all of which are closely intertwined and interdependent. An affiliate’s performance with an affiliate program is always dependent on the synergy of these variables, so a smart affiliate analyzes the whole set. In late Summer 2010, I conducted a poll asking a group of affiliates to prioritize these factors. The breakdown, and the order the factors fell in was:

1.  Commission amount (71%)

2.  Website usability, leaks, etc. (57%)

3.  Merchant’s reputation / reliability (54%)

4.  Conversion rate (45%)

5.  Tracking / reporting platform used (38%)

6.  Cookie life (36%)

7.  Prices / competitiveness (33%)

8.  Market saturation (29%)

9.  EPC (32%)

10.  Creatives (29%)

11.  Tools (25%)

12.  Management and approachability (23%)

13.  Commission recurrence (19%)

14.  Terms of Service (16%)

15.  Reversal rate (12%)

Make sure you take a holistic approach, analyzing all of these factors before making any decision.

About the Author

Evgenii "Geno" Prussakov (eprussakov on Twitter) is a graduate of the University of Cambridge. He is the author and co-author of three books, including bestselling "A Practical Guide to Affiliate Marketing." Geno is an international speaker, award-winning blogger (at AMNavigator.com/blog) and affiliate program manager (Best OPM of Years 2006-2008 per ABestWeb). He is also the Founder and Chair of Affiliate Management Days conference.

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