Fees

Cost is always an important factor for any type of marketing, but how you pay for affiliate marketing is a little different.

1. First, you will typically have a Network Integration, or setup, fee that covers the cost of getting your account online with the network. The Google Affiliate Network has a relatively low setup fee ($1,000) which gives accessibility to smaller businesses while others are much higher.

2. Second, you will likely be required to hold an escrow account from which your Publisher and Network fees are withdrawn. Some networks require that you have a minimum that you keep in this account, such as LinkShare, which needs at least $3,000 to keep running.

3. Lastly, the Advertiser generally determines Publisher’s fees, but Network fees can vary. For instance, Google Affiliate Network and Commission Junction both take a percentage of Publisher fees as their share, but LinkShare also offers a revenue share option. Depending on your business and what you decide to offer publishers as an incentive, you may want to consider these different options. Keep in mind, however, that most networks have a minimum transaction fee as well, to make sure they are making money every statement period.

Link Capabilities

One major factor in your decision should be the link capabilities and limitations of your network. Google Affiliate Network only supports jpg’s, gif’s and png’s for banner ads, while networks like Commission Junction support much more sophisticated ads with Flash, interaction and pop-ups. If you run an e-commerce business, some networks have better capabilities for dealing with product feeds, which could make an impact on the success of your program.

Contract Terms

Among other things, you will want to be comfortable with the minimum contract length that you sign with your network. Google Affiliate Network allows for a term of 6 months, while Commission Junction and others require at least 12 months. If you’re just starting out and don’t want to make a big commitment, GAN might be a good option.

Auxiliary Services

If you think you may need help with your Affiliate marketing in terms of support or management, a larger, more costly network may be needed. While Google Affiliate Network does not readily provide services for these areas, Commission Junction and others provide a la carte services for companies that need additional advising.

Agency Agreements

The last thing you’ll want to consider is how Agency agreements work with the network you choose. If you currently have an agency managing your internet marketing, or are considering obtaining one, you may be able to get discounts and other special features from your Affiliate network.

In general, for smaller businesses just starting out with Affiliate marketing, Google Affiliate Network may be the best choice, as it offers flexibility, simplicity and a smaller initial investment. Though Google does not provide many extras in terms of services, their network is more accessible. Larger companies would most likely benefit from a larger network with more capabilities and services, though it will generally cost more. In other words, you get what you pay for!

As always, it’s important to evaluate whether Affiliate marketing is right for you and your business, but if a good partnership is created with a network and the program is managed regularly, Affiliate can bring a lot of marketing success to a business.

More information:

GAN: http://www.google.com/ads/affiliatenetwork/

LinkShare: http://www.linkshare.com/advertisers/affiliate/self-service/

CJ: http://www.cj.com/about-us/affiliate-services

While this concern has been broached at the national level, many states (including Illinois, New York, North Carolina and Rhode Island) are looking at changing state tax codes quicker than the United States Congress is willing to change them.  In order to do this (and remain legal), the states involved claim that having an affiliate marketing presence is equivalent to having a brick and mortar store in the state and are adjusting tax laws for online retailers as a result, requiring them to collect sales tax from individuals purchasing from any state via affiliates.

Amazon was the first retailer to respond to these changes, announcing they would discontinue affiliate programs in states making these tax changes, calling the law “unconstitutional and offensive.”  Overstock recently followed suit, announcing they would also discontinue relationships with affiliates and partners in these states.  This move has many affiliates in the affected states considering moving to states that do not have the tax restriction in order to maintain the viability of their businesses.

Despite the fact that this change isn’t good for customers, my company or my clients, I support this change as an effort to level the playing field between online brick-and-mortar retailers.  Considering the current system provides an unfair advantage to Internet retailers versus their brick and mortar counterparts, I support this change and expect national laws follow suit in time.

How have these changes affected your business and/or clients?  What strategies do you have in place to minimize the fallout (or take advantage of it)?

- Designed for Apple devices (iPhone, iPad, & iPod)

- Built into Apple’s OS

- An ad let’s you stay in the application while it’s still running

- Implements rich media

- Apple sells and hosts the ads

- 60% of Ad Revenues go to developers

What does this mean for Google’s acquisition of AdMob and other third-party advertising networks?

The unveiling of iAd potentially moves the mobile advertising industry forward because it creates a highly competitive market. This makes the acquisition of AdMob, another third party mobile advertising network, more acceptable to regulators trying to halt it because there are less chances of Google monopolizing the market now.

At the same time this could be Apple’s attempt at pushing AdMob (or other ad networks) out of the iPhone specific mobile advertising industry. According to Apple it will still allow “third party” advertisers to serve ads within apple apps. However, there is a new developers agreement, which states that “The use of third party software in Your Application to collect and send Device Data to a third party for processing or analysis is expressly prohibited.” AdMob would be hindered by this new policy reducing choice for developers who want to include ads on iPhones. The policy takes away any advantage that a developer or third party advertiser would have at collecting data on how users interact with the in-apps ads. The only real way that app developers can advertise on Apple devices (iPhone, iPad, & iPod) and collect usage data would be to opt in for iAd services.

Another thing to note about Apple’s iAd is that it hurts Adobe because it requires developers to program code in HTML5 to deliver the advertising content. This is another huge blow for Adobe because Apple devices do not support Adobe Flash, and the launch of iAd means they most likely won’t in the future even though Flash is currently the standard for much of the rich media ads on the web and mobile devices.

Ultimately, it opens up advertisers’ doors to Apple users in new ways. Even though iAd could push away mobile advertising networks like AdMob that would want to put ads on Apple devices, not all mobile users use the iPhone. This will still allow AdMob to tailor their services to non-iPhone users and other mobile devices.

So, what is affiliate marketing? It is a service that uses one highly trafficked website to drive traffic to another. Affiliate networks earn commissions by driving traffic to a business’ website. A good example is Amazon.com, which uses affiliate partners to display Amazon.com advertisements, therefore driving increased traffic to Amazon.com.

The affiliate networks are valuable as they broker, manage, monitor and report on the advertiser and publisher relationship.  A publisher is defined as someone who has a website and wants to sell advertising space on it.  An advertiser is in the market to buy the aforementioned advertising space.

In a broader sense, affiliate marketing creates a virtual sales force for advertisers, generating more conversions, and allows the affiliates to profit off of their network of website’s.

There are various types of affiliate marketing and each enables the affiliates, advertisers and consumers alike to all reap the benefits of this tactic.

Search affiliates earn profits in the arbitrage between media spend on the search engines and the commissions paid by advertisers.  In other words, they earn commissions for every sale/lead they generate for an advertiser and then reinvest some of that profit into costs for maintaining a paid search campaign and/or SEO activities. Search affiliates make it possible for the advertiser to occupy more than one position in search results via paid and/or natural search.

Coupon affiliates provide their members with instant rebates and savings via coupon, promotion codes or exclusive offers.  Advertisers use the affiliate network as a means to distribute discounts that incentivize users to visit their sites. When an affiliate posts coupon codes they receive a commission every time someone uses that code.

Cause-related affiliates pledge some portion of the commissions they earn from advertisers to a particular cause instead of collecting commissions for themselves. For instance, SchoolPop.com donates a portion of the commissions they acquire through purchases and leads to schools of their consumers’ choosing.

Loyalty affiliates offer cash or a cash alternative that is earned when members complete a desired action for the advertiser (purchase or lead). Often when receiving a cash alternative, consumers accumulate points which can be accrued over time and redeemed for gift cards or other items of value. A good example of this is frequent flyer miles. From here, loyalty affiliates receive a commission from the retailer once the conversion takes place.

Regardless of the type, affiliate marketing has many benefits. For starters, affiliate marketing is a win-win for both advertisers and the affiliates themselves. As we have previously mentioned, if an affiliate marketing campaign is managed properly – advertisers will receive incremental leads/sales, affiliates/publishers will get paid for generating the leads and the affiliate network will receive a commission off of each transaction they broker.  Additionally, affiliates often offer many advantages to the consumer, creating incentive and money savings. When implemented correctly, affiliates benefit all parties involved.

If you are interested in learning more about what affiliate marketing can do for you, contact Rise Interactive. Rise takes advantage of long-lasting relationships with the affiliate networks to gain premium exposure and optimal media rates, managing the process from start to finish.