There’s a saying that a dog is man’s best friend. I should warn you though that even the best intentioned dogs can do crazy things sometimes! “Best friend” marketing is the same. Research your affiliates before getting involved and keep a close eye on the true returns you are getting. It has lately become a hot issue for several of our clients. The concerns we hear is that shoppers find their products online and then search around for coupons on affiliate channels (like Redtagdeals, Savevy, etc). So the retailer ends up paying for the coupon and the affiliate clicks. That’s double dipping and it’s taking a big bite out of your bottom line. So let’s review affiliate marketing and leading practices here.
What is affiliate marketing?
Wikipedia says “affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate’s own marketing efforts”. (read more here) .
Compensation to affiliates can be based on number of visits (cost per click), number of new potential customers who not only click but also engage with the retailer such as subscribing to a newsletter (pay per lead) and compensation for the sale that was brought through affiliate channels (pay per sale). Currently, the affiliate scenery is dominated by coupon sites, cashback sites and a few significant remarketing and email affiliate enterprises but other models include aggregator sites (comparison sites), shopping directories, review sites, rewards sites and blog sites.
There is one pretty audacious headline on marketingland.com claiming “Omni-Channel Retailing Isn’t Omni Without Affiliate Marketing”, suggesting it is a must have tool. It might be so. There are many advantages of affiliate marketing but it also carries some threats that should be taken into account before diving into the depths of the world wide web capabilities.
Pros and cons of affiliate marketing
You do realize some obvious benefits.
- Your products get sizable exposure at no additional cost. Attempting to get a similar level of exposure using different methods can be a lot more expensive.
- Updating content is very easy, hence it is easy to stay relevant to customers needs.
- Affiliate marketing is an excellent tool for generating new leads and reaching targeted audiences.
- You only incur a cost if and only if the appointed action occurs. No action – no reaction!
Despite all the good and cheap, there lies a list of things to be cautious about.
- Uncontrolled spread of codes across the internet, and trying to keep tighter control.
- Affiliates may damage company’s reputation by pushing false or exaggerated advertising in order to get more rewards.
- Click fraud is endemic. Even on our website I see traffic from sources with “SEO” and “monetizer” in their domain names. Foremost, you should try to filter out all bounces, but be careful of paying your affiliates for such visits.
- Close and constant updates can be hard to keep up with.
How to avoid negative experience?
In order to protect your codes and vouchers going viral on the web, Helen Southgate says, “the best way […] is to distribute unique codes, so that a code can only be used once.”
Even though initially it is a more complicated apparatus to establish, this will give more control and regulation of a consumer.
In regards to keeping a good reputation, it is important that companies have an experienced affiliate manager to oversee the program content and lead a proper communication with affiliates. Without dedicated management, this type of marketing can misrepresent your products, impair company’s face or simply not bring any results at all. The presence of good manager allows to stay on top of content and design that affiliates use to promote the product and monitor the campaigns on a constant base.
With careful application, those clicks mentioned at the beginning turn into revenues rather than loss. Affiliate marketing is not a rocket science but as all things, it needs proper management and supervision.
How to get the most out of affiliate marketing?
Hope the above refresher was helpful. In order to get the most from affiliate marketing you have to ask yourself – Is affiliate marketing a net revenue driver to the company? Clicks are not a strong measure and are open to abuse.
You need an analytical revenue attribution solution to measure the true revenue impact. To schedule a free 1/2 hr consultation contact us via the link below.
Photo by Andy Blackledge, attribution 2.0 Generic (CC BY 2.0)