I’ve just read a presentation from this summers Adtech saying that affiliate marketing is a no risk marketing chanel…Wrong and infact so wrong it’s unbelievable. Affiliate marketing if done correctly is a very powerful advertising channel (please note it’s advertising) if set-up and managed correctly.
The online sector is still in it’s infancy and is unfortunately littered with people that don’t know their arse from their elbow. It’s becoming more apparent as the pressure is increasing on retailers to look after margins.
So how would i run my programme with all these risky affiliates around?
-Brand PPC. No affiliate would be near any of my brand terms or variations. I’d make sure my trademarks are registered so that no one is using them in their Google ads. If my competitors were bidding on my brand, i’d be flattered and then would have a number of landing page sites pushing them out or letting them spend their budgets quickly.
-Generic PPC terms. Again i’m running as much of this myself (either me, my marketing manager or outsourced to a PPC agency). Long tail keywords i’d certainly open to my affiliates and affiliates bidding on generic terms to their own sites (provided they aren’t promoting me in their ads). Between us we’ll have everything sorted.
-Voucher codes. All voucher code sites would be removing their click to reveal on codes. Voucher codes would be very heavily targeted to new customers, ie 10% off your first purchase. Voucher code box would be removed from my site and any voucher codes would be available from links. Returning customers, sorry voucher code sites but your getting a lower commission.
-Incentive sites. Again i’m paying more commission for first time customers and less for returning customers.
Both voucher code sites and incentive sites have major reach, yes they will overwrite affiliate cookies, i’ll cover this when i get to deduping, however they have loyal bases. I’d be getting to know these guys and working on promotions to get people buying…Savvy Tips, email marketing, forums, tenancy agreements….the list is endless.
Reporting, now here you need to be sad, and have your internal reporting pulling back everything. So you can instantly pull back a report by affiliate, teaching my about their business. Average basket, lapse time from click to order, % of returning customers, % of new business and much more. Paul Smith (formely of IWoot) quoted that 70% of his business from Quidco was returning customers, great feedback however there are two massive unkwown questions of the 70% – who would have ordered the products from Firebox (Presents for Men, GadgetHub etc) and from the 30% – who were new customers how many would have still bought the product? I’ll ignore the question of no Quidco link and people going to the other incentive sites!
Deduping – i can probably write a post on this alone, which i’ll do one day. However to sum it up, affiliate marketing is part of advertising your site. Offline is great example of how this works, i walked past a billboard in the street, i saw the advert in the paper, my friends told me about the product, it was on TV during XFactor…. You can’t dedupe easily against this and you have to pay to for each channel. Affiliate marekting suffers as it’s easy to work out the last click and pay for this, however people need mutiple kicks to go and buy things. Why affiliate marketing uses the last click model is becuase you could in theory pay commission multiple times taking you over the profit margin per product.
It’s no secret but several networks are evolving to allow merchants to be paying multiple times for the same sale. This is a very exciting development as it means the true value can be given to affiliates. Content affiliates, this will be very exciting for you guys as your going to see more transactions, and don’t be worried about earning less commission per sale watch merchants understand your value and start rewarding you properly. It will take time to understand the value of each affiliate.
Back with my merchant hat on, i’m running the same path analysis across all my marketing spend and adjusting my spends accordingly. It’s not going to be easy to understand the true value. Lots of merchants de-dupe against every possible channel, you are damaging your programme.
Now other issues with my affiliates;
-Affiliates buying through their links…please keep doing this and thanks for your hard work promoting us. Don’t promote me and we’ll have words about your activity!
-Typo domains….go and buy everyone of these you can get your hands on, too late affiliates/domain parkers have them? Get talking to those people to redeem them as quickly as possible.
-White Lies…that affiliate isn’t sending traffic from where they say they are. Get yourself a copy of Brandwatcher and Hitwise you’ll soon be able to spot the rouges doing things they shouldn’t. Check refering urls from all your sales.
-Affiliates SEO, as the merchant if your site doesn’t rank higher than the affiliates then it’s time to optimise your site properly and get some links in!
Customer interaction, pick up the phone and call your customers to find out more about their buying process. Why has your customer come from Mutual Points having clicked on 2 content sites. Find out what makes them tick.
Unfortunatly running your business properly is not always possible if your business is small. It’s not cheap, man hours and reporting tools to do this. However a good affiliate network will do this to a degree for you (you’ll end up with higher monthly fees and a higher cost per sale).
I’m sure people will have some questions so please fire them over and i’ll explain further.
