Note from Geno Prussakov: I am excited to welcome our newest guest blogger, UK-based Simon Swan. Enjoy his first AM Navigator post below.
As affiliate marketing continues to mature as a key digital channel to support an organisations acquisition strategy, it is important to have an actionable plan in place to support your program and having set objectives in place to help drive the campaign in order to meet key business goals.
For any campaign there are three key features you should look to set the foundations for a successful affiliate strategy: Research the Market, Knowing your Audience & Identify your USP – i.e. how will your affiliate campaign stand out from your competitors?
With this in mind, I have put together an affiliate marketing 5 Cs campaign to follow to ensure you’re campaign can deliver the results
1. Competitor Analysis
Ensure you are assessing the market you are operating in and identify any new affiliate campaigns being launched by the competition
- Listen to your market – Set up and monitor your competitors and associated keywords through free tools such as Google Keyword planner and Google Alerts. Monitor review websites, affiliate forums and use Social Media tools to listen to the market, views and opinions of customers and affiliates of your competitor programs.
- Have a performance benchmark? – Key indicators to consider when completing your competitor analysis include: commission tiers, size of their affiliate base, are there any corporate publications that provide a breakdown in how much revenue their affiliate channels generate?
- Exploit Gaps/Opportunities – From the SWOT analysis, a number of gaps & opportunities should now be identified and should provide you with a strategy. Defining a Gaps and Opportunity analysis can be very effective if you’re operating in a crowded market place and are looking for a way to stand out to recruit affiliates to your program.
- Points of Differentiation – Look for the opportunities, what are your competitors not offering the market that you could exploit and take advantage of to boost the appeal of your affiliate program?
- Surveys – Set up online surveys to send to potential affiliates who sign up to your program and also ask the 3rd party affiliate program to see if they could communicate this to their wider pool of affiliates. Be prepared to offer an incentive or competition prize as a means to drive users to complete the survey – this acts as an effective tool understand the potential, opportunities and to create new incentives
Ensure your program is competitive and worthwhile for affiliates to sign up to and invest their time and effort to remain loyal to your program
- Override fee –The majority of affiliate networks charge a 30% override which is based on the commission you are prepared to pay your affiliate base.
- Tiered Commission Levels – As your program matures, you should be looking to segment your affiliates by revenue (or what the objective of your program is) so to clearly incentivise the affiliates or to easily identify clusters of affiliates that may need more time and support on understanding how to best optimise their performance. As much as it is with the lead affiliates, it is also important to incentivise the “long tail” of your affiliates.
- Bonus - Introduce “Bonus level” commission tiers to help sell through end of line products or If you’re a retailer that produces “own brand” products, you may well have more margin to play with by offering a higher commission level.
Create a portfolio of banners – Understand your affiliates and what’s needed to promote your campaign
- Know your affiliate community – According to Econsultancy 55% of affiliates consider text to be the most effective linking method with banners (36%) and datafeeds (25%) also voted the most popular form of promotion
- Banner sizes – Ensure you’re providing a rich mix of banner inventory for affiliates to use on their sites – these can be generic based or targeted around key products/services as well as promotions being run through your seasonal campaigns.
- Keep it fresh – Make sure you’re keeping your creatives fresh and updated – there is nothing worse in seeing banners promoting out of stock products or Christmas promotional creatives being run in July!
Make yourself approachable to your affiliate base to deliver a successful program
- Open to questions – Get into the habit of communicating with your affiliates as well as the affiliate network and better still, face to face so you can build up a good working rapport.
- Extended Workforce – Your affiliate base should be regarded as an extended work-force of your organisation, they should be supporting you to deliver on the objectives you’ve set and thus should be treated as an internal member of staff.
- Introduce an Open Day – Launch an annual open day at your offices – Invite your affiliates to come and visit you and the team, introduce them to your product lines, future plans and product promotions you have planned for the year. The key here is to really get their buy-in and that they feel part of your business.
- Keep the buzz alive – Never let your program become boring and out-dated! – keep up interest levels by running competitions and interesting, topical information on your organisation and the sector you operate. Easy to do plans such as an events or editorial calendar should help to stimulate your team to continue to keep communication going through-out the year with your pool of affiliates.
5. Campaign Analysis
What are you going to monitor and measure?
Below is a list of KPIs that should be considered to assess the effectiveness of your campaign with the objective to generate sales:
- Active affiliates – those driving key objectives of the campaign e.g. sales, leads, visits
- Inactive affiliates – those no longer promoting the campaign, left the program
- Potential affiliates – those no longer driving positive performances based on their historical sales or leads
- CTR (Click-through Rate) – the total number of ad clicks divided by the total number of ad impressions
- Impressions – the total number of times your ad is shown. This is a good metric to understand the effectiveness of a banner creative
- Conversion – the total number of visits divided by total number of sales generated
- Average Order value – of sales through the program
Google has had a love–hate relationship with affiliates since the dawn of affiliate marketing [some of which is reflected in/on this SEObook's infographic on how Google views affiliate marketers].
Just a few months ago (on January 27, 2014 to be exact) that they put something in “web ink” too — by publishing a blog post on their Webmaster Central in which they clarified that affiliates whose websites do not add value may be deemed violators of Google’s quality guidelines and, as a result, they may “suffer in Google’s search rankings.” You may find the full post here, but here is an excerpt from it:
Our Webmaster Guidelines advise you to create websites with original content that adds value for users. This is particularly important for sites that participate in affiliate programs… Google believes that pure, or “thin,” affiliate websites do not provide additional value for web users… Not every site that participates in an affiliate program is a thin affiliate. Good affiliates add value, for example by offering original product reviews, ratings, and product comparisons.
So once again the subject of added value
or lack thereof was brought up and underscored as the centerpiece of Google’s approach to indexing affiliate websites. I fully agree with the ungergirding principle of such approach.
Furthermore, I believe that there are two facets of value that should be taken into an account here:
1. Value to web user – Be it original content (textual or visual) or a comparison shopping functionality of the affiliate website, or anything else that enriches the end users’ experience saving them time, money, or adding value in some other way — all of these would “provide additional value for web users” that Google encourages affiliates to contribute through their sites.
2. Value to advertiser – Whether any search engine cares about this or not, merchants who run affiliate programs should look at affiliates through the prism of value too. Is it going to be beneficial to the advertiser’s brand and constructive to the pre-sale process (involving their product or service) to be promoted on this or that online affiliate property? These are important questions to ask.
I elaborated on both of these facets in more detail in my recently-released Lynda.com course on “Affiliate Marketing Fundamentals” and the video on “adding value” is one of very few that is available free of charge. You may view it below:
As always, your comments are warmly welcome. That’s what the “Comments” area below is for. So if you have thoughts to add, I encourage you to use it.
The Small Business Influencer Awards honor companies, organizations, vendors,
apps and people who have made a significant impact on the
North American small business market. [more here]
Apparently, I was nominated for the 2014 Small Business Influencer Awards as well. This is humbling and altogether exciting. Having authored nearly 1,500 articles and blog posts, four books and a video course, having founded the world’s only affiliate management conference, and having contributed to the success of over 100 affiliate marketing programs… I am still very much humbled to be among the nominees.
If at any point of time I influenced your business, I would highly appreciate your support by casting your vote here (or upon clicking the image below). This won’t take you longer than one second/click.
The voting ends on September 15, 2014, at 2:59 pm Eastern. Many thanks in advance for your support!
According to the conference’s statistics my 5 Foundational Pillars of Affiliate Program’s Success session ranked as a top 3 session by attendance [more here], and the number 1 session by audience growth [details here].
I have also received some encouraging attendee feedback on my session. Here are people’s comments on this particular speaking appearance of mine:
Well structured and clear.
Great talking points and resource suggestions.
Excellent points. Very useful.
I attend a lot of conferences in may verticals. Geno is one of the best and informative speakers I’ve heard in a long time I learned a lot of new things. I would definitely attend another session where he is speaking.
Excellent – lots of great info!
Great for beginners – provided great outline of how to run an affiliate program
Well read speaker, nice data points!
Stats were great. Geno was knowledgeable.
Good session with good Q&A at the end.
If you missed my “5 Foundational Pillars of Affiliate Program’s Success” presentation, you may now find it on SlideShare.net:
Note from Geno Prussakov: I am excited to welcome our newest guest blogger, UK-based Pete Campbell. Enjoy his first AM Navigator post below.
Very few things in life are black and white (zebras and pianos are notable exceptions) and, more often than not, things fall into that difficult and morally ambiguous “grey area”. This is just as true for affiliate and SEO marketers as it is for everyone else.
If you’ve come across the terms black hat and white hat in an online marketing context before, you’ll know precisely what I’m talking about. In highly competitive niches such as gambling (bingo and poker), law (personal injury claims) and finance (payday loans), it can be difficult to choose between doing your online marketing the “right” way (according to Google), and doing things the “wrong” way in order to gain the upper hand.
What colour is your hat?
The problem is, no matter how tough Google is getting with black hatted online marketers who engage in spammy techniques, doing the dirty is still paying off. You only need to type a highly competitive gambling search term such as “bingo sites” (which has 18,000 monthly searches in UK) into Google and although it might not be obvious, most of the websites on Page 1 engage in spammy black hat techniques. The use of paid link networks and link farms is still rife and still generating search result rewards – for now.
Yet, by all accounts, the days of paid link building are over. Google may not have managed to banish every trace of SEO spam from the SERPs, but the search engine certainly means business. While black hat techniques may inflate your rank over the short term, if you have long term ambitions online, they’re not likely to go the distance.
Google get serious about spam-laden queries
You only need to look at Google’s clamp down on payday loan search terms to see this in action. In tandem with Panda 2.0 (which was updated to get even tougher with low-quality sites with crummy duplicate content and spammy back links), Google released a Payday Loan Algorithm update in May 2014. Designed to target “very spammy queries”, particularly in those competitive niches I listed earlier, the update was launched to start getting rid of the spammiest offenders who target these competitive terms.
While the Payday Loan Algorithm update will affect a small 0.2% of English search queries, it’s a clear signal of intent from Google. The search engine have also claimed that they plan to start proactively penalising and even banning affiliate sites which fail to add value for visitors.
And if you think Google are calling spammy webmasters’ bluffs, think again. Back in January 2014, gambling giant William Hill was hammered with a serious penalty thanks to its spammy backlink practices. The penalties sent the gambling site hurtling down the SERPs costing them what must have been hundreds of thousands of pounds in revenue.
How to keep your nose clean and win big
If you’re keen to avoid a future without penalties and want to do things right, it might feel like you’re fighting a losing battle against your less scrupulous contemporaries right now. But the truth is, you don’t have to play dirty to win big. Google may be slowly starting to punish black hat behaviour, but they’re also in the habit of rewarding websites which play by the rules. Increasingly, websites who focus on producing awesome, hyper-relevant content, great user experience and high-quality editorially earned links are starting to win on page one.
I’ve been running content strategy over at Two Little Fleas (a UK based bingo portal) throughout this period and, thanks to some concerted effort and creativity, great content has helped Two Little Fleas make page one for highly competitive terms including the aforementioned “bingo sites”, 100% paid link free.
But cracking content only is not the be all and end all to page one rankings. One of our most successful strategies has been reaching out to affiliate partners to collaborate on and distribute content has been a big contributing factor. We’ve explored ways to work with affiliates, leveraging these relationships to build great, relevant links and some pretty cool stuff.
3 ways you can leverage your affiliate relationships too
Interviews & “Ego Bait”
Everyone’s a little bit susceptible to flattery and, if asked, we’re all pretty keen to share our wisdom and opinions a lot of the time. It’s normal. But it’s also very helpful if you want to generate content that’s interesting to your readers and highly sharable within your niche. Take some time to build relationships, reach out and ask industry experts and influencers about a topic you’re writing about. When you come to set keyboard to paper, make sure you reference them by name, then let them know once your content is live.
Example: For Two Little Fleas, we’re currently running a series of interviews with organisations like The UK Bingo Association & Marie Curie Cancer Care who run Tickety Boo Games on their thoughts about the decline & comeback of the Bingo industry.
Just as we all like flattery, we all like to compete and win. Look into setting up your own awards for your affiliates, rewarding them for providing great user experience for their (and your!) players. This will win you plenty of social media attention and will generate links from all sorts of sources within your niche.
Example: WhichBingo run an annual awards ceremony for their affiliates – well worth checking out for some inspiration. Their awards event has won them tons of great quality links from affiliates including Gala Bingo.
Build an “operator” review section into your website and hire a journalist quality writer to independently and transparently review site operators. Make sure you also include key facts about each site, alone with the pros and cons to ensure your readers find the reviews really, really helpful. Then take things a step further by encouraging users to add their own reviews and comments into the mix.
Once you’ve collected all of your reviews, you could even consider designing an “Approved by *YOUR NAME*” badge which you can then offer to operators. In many cases these badges will give their brand extra credibility and boost their conversion rate. That makes them even more likely to display your badge along with a link back to – you guessed it – you!
Example: Two Little Fleas has placed badges on numerous operator sites, as an example though you can take a look at the one on the bottom of http://www.paddybingo.com/. (This site is owned by the same group company as Two Little Fleas)
Have you tried leveraging affiliate relationships to create amazing content and win powerful, natural links? What has worked for you? Where do you stand on the black hat/white hat divide? Share your views, tips and experiences below.
Affiliate managers focus on affiliate recruitment, and then sweat over affiliate activation; but do you realize that when you, finally, get affiliates to put up your links on their website(s) your conversion is then under scrutiny — their extremely critical scrutiny?
There are very few affiliate programs that I promote on my blog, and when one is yielding a higher-than-average click-through rate it quickly stands out. Then, however, if it yields low or (worse yet) no conversions, it stand out even more! Such has been the case in the situation exemplified by the below-shown donut chart:
Yes, 2,427 clicks (or 91 percent of all clicks sent to the merchants on this network) were generated since getting active with the program, and… zero of them converted.
I took their links down replacing them with another merchant; yet couldn’t help but wonder how patient affiliates normally are with their non-converting merchants. So, I put together a poll asking affiliates how many no-conversion clicks makes them give up on a merchant. Here are the results so far:
How Many Non-Converting Clicks Are Too Many?
It turns out that very few affiliates will patiently wait on merchants to straighten out their conversion rate issues. Seven out of ten won’t refer more than 500 clicks, and three out ten will give up on a merchant (taking down or swapping their links) within the 100-300 clicks range.
Sobering? It should be.
It is also 100% natural. After all, the rule of this affiliate game is “get paid for each conversion.” Affiliates are rarely being compensated for traffic, “eyeballs,” branding, or anything that cannot be directly expressed in a conversion (most frequently a sale, or a lead). And they will take your links down if you don’t convert. Some earlier, other later… So if, as an affiliate manager, you see clicks but no conversions (or conversion rates substantially lower than the averages), look for an internal problem, and fix it before your affiliates give up on you.
Earlier this month The Wall Street Journal published an interesting article where Miriam Gottfried drew an analogy between a coupon affiliate and a sandwich shop assistant compensated on performance basis. Here’s how the reporter’s illustration went:
Imagine you own a sandwich shop and want to bring in new customers. You recruit five assistants and give them coupons to distribute, promising to give each credit for sales they generate. Four patrol the neighborhood, distributing coupons door to door. The fifth sits right outside the store, handing them to customers as they walk in.
Predicting who will get the most sales isn’t rocket science. But how much value is that fifth assistant actually providing?
The article then went on into analyzing RetailMeNot, a famous coupon affiliate who went public on July 18 2013 “at $21 per share” and “in its first day of trading its stock gained 32%” [source]. On February 27-28 2014 the price was at its peak ~$47 a share. In early July 2014, however, RMN’s share prices dropped to its lowest point in 12 months [details here]. Hence, the WSJ’s look into the company, and what may have affected the drop.
You may read the full article here, but in my today’s post I’d like to touch upon a few important areas brought up in this article.
Last Click Rule / Attribution
The article described RetailMeNot as an affiliate that “generates the vast majority of its sales from commissions on online transactions on which it receives ‘last-click attribution'” which is “when its site is the last place a shopper clicks before making a purchase.” They are right on the money here.
The “last-click” model which is currently the prevalent rule around the industry is indeed a foundational element which allows coupon affiliates to take advantage of the “last minute coupon search” customer behavior. However, it is important to understand that advertisers do not have to have their affiliate program structured in a way where they would just pay any affiliate that drives that last click. To avoid the above-referenced last-minute coupon search problem, merchants can set attribution rules of their own, whereby affiliates who drive the customer “back” to the shopping cart after he/she has gone to a search engine to look for a coupon, do not get credit (or get only a portion of the full commission, whereas the rest goes to affiliate who originally influenced the buying decision, or introduced the customer to the brand). If you are not familiar with how this works, take a couple of minutes to view ShareASale’s video on their “Tags & Rules” solution which allows advertisers to tie affiliate commissions to time-frames as well as click behaviors and patterns (pay special attention to the “1 Minute Rule” described there).
Many of the larger (and smaller but sophisticated) advertisers with affiliate programs are already also employing other technologies to avoid the “assistant outside the store handing coupons to customers as they walk in” situation described by The Wall Street Journal.
Some suppress the coupon/promo code field altogether (unless the customer originated from a site like RetailMeNot and other coupon affiliate), others display coupons right on their own site (like Macy’s does), others also create dedicated “coupons” pages to outrank coupon affiliates on “TM + coupon” type of search phrases (see JCPenney’s example below), yet others offer no coupons altogether, and/or keep coupon affiliates out of their affiliate programs.
There are also some merchants that would drop coupon affiliates’ commission three- or four-fold. However, this does not really resolve the problem of the last-minute coupon search, as similarly to this situation the affiliate cookie still gets set. And while there may/will be financial benefits for the merchant, it will hurt other affiliates — those who may have influenced the purchaser earlier in the clickstream.
Shopping Cart Abandonment
Finally, I cannot omit this important area which is brought up towards the end of the Wall Street Journal article in question. The “so-called shopping-cart abandonment” is a serious problem faced by every single online merchant. According to today’s Fireclick Index data it exceeds 69% (see the below chart) which matches Vibetrace’s estimates which say that in 2014 the shopping cart abandonment rate reaches 69.50% [source].
This phenomenon is, actually, much more complex than consumers simply giving up “on purchases once they see the total.” Beyond the totals as well as shipping costs and/or taxes, some are comparison shopping, others get uncomfortable with the checkout process, the website’s navigation, or face payment-related difficulties, and then there are also those who find the delivery options unsuitable, or are influenced by one (or several) of the 14 factors ranked on the below-displayed Statistia’s chart:
If and when a coupon affiliate, or a retargeting affiliate, or a remarketing affiliate brings back that customer hours or days later (with a help of a coupon, banner ad, email, or something else), there frequently is value in that, and they are worth compensating.
To make the most of your affiliate program and the different types of affiliates in it, manage it!! Don’t let it fly on its own relying on the last-click-wins or some other preset/default rule. Measure it and manage it. Only then it will yield incremental fruit. If you need external help with it, email me.
So… the time has come for me to announce the winners of the contest for Affiliate Summit East 2014 passes.
We’ve received really thoughtful comments from every entrant (for which I sincerely thank every one of those who took the time to submit them) and instead of picking the winners myself, I simply had no other choice but use a list randomizer instead.
So, I entered the names of all 5 entrants in there:
Hit the button, and got:
Once again, huge thanks to all of you for your comments; and congratulations to the winners (who will receive my emails shortly). In case any one of the three winners cannot take advantage of their free Affiliate Summit pass, it will go to the next in line (as shown above).
This morning as I was reviewing affiliate applications in our clients‘ programs, I had to dig into one specific affiliate’s feedback (it was a ShareASale-based affiliate program, and they equip their advertisers with this great feature). It was their negative score that raised a red flag.
This affiliate positioned himself as a coupon-oriented affiliate, but their simplistic website (with nonexistent Quantcast and Compete.com data, and Alexa rank of 7,371,262) was just a mask for what they really were all about — of course, paid search violations or “trademark bidding” (a very common situation, by the way).
However, as I drilled down into the feedback left for them by other merchants and affiliate managers, I noticed one record (you may see it marked with an arrow on the below screenshot) that prompted me to write this blog post.
Whether the affiliate violator is bidding on your trademarks (or other prohibited terms), harvests the coupons you email to clients, engages in cybersquatting/typosquatting, or any other prohibited behavior, lowering their commissions to zero (or any other low) percentage is not a solution to the problem. Banning them from the affiliate program is a much better route to go in these contexts.
Since most affiliate programs and platforms currently operate on the “last click wins” model, when the violator’s link is clicked – the cookie still gets set (frequently overwriting the previous affiliate referrer’s cookie). And yes, while you will save money on the violator’s “referrals,” you will often hurt the other (good!) affiliates in the process (preventing them from earning their well-deserved full commissions).