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Michael Wall

Vice President, Digital Strategy

Take Your Affiliate Marketing Program Off Autopilot

According to a June 2014 eMarketer report, nearly half of US online retailers name affiliate programs as their most effective customer acquisition channel and believe the channel generates valuable new customers. Because affiliate is performance based, there are tremendous advantages from a budgeting standpoint.

While highly effective, affiliate marketing tends to be overlooked when it comes to investment and optimization. Quite frankly, it isn’t the shiny new object and after a while, can simply be placed on “autopilot.”   And many brands that are not taking advantage of affiliate marketing don’t quite get the upfront budget needed to set up the right technology and reporting infrastructure, as well as invest in properly building a network of high value affiliates.

The old idiom “the squeaky wheel gets the grease” may be the reason - nothing is visibly wrong. When in actuality, the primary issues are the ones that may not be visible at all. Here are important questions you should be asking about your affiliate program.

Is your program at scale? When was the last time your internal team or your agency looked at key performance drivers? These include:

  • An active affiliate acquisition program – Go beyond simply posting your offer on a major network. If you are an enterprise brand, you should be constantly searching for, and hand picking, high value sites with a specific affinity to your products and audience.
  • Creative optimization – Affiliate marketing, like any other channel, should not be one size fits all in terms of creative units and messaging. You may want to give your top affiliates custom offers, and possibly even a catalog of ad unit options for your larger affiliate base.  The more relevant the offer, the higher the engagement and performance. Keep it fresh and make your affiliates feel that you are working hard for them to drive revenue.

Are you overpaying for sales? Whether it is a function of policy or technology, here are a few ways to tighten up your program:

  • Too much commission - Rather than pay a percent of each sale to a third party affiliate network, there are now many ways to build affiliate networks on a flat fee model. This further eliminates risk and adds back a ton of margin.
  • Attribute Correctly - Did you know you can de-duplicate across paid channels and pay less or no commission based on the path to conversion? An example of this is when a consumer is driven to your site via another channel (i.e. search or display retargeting) then jumps to an affiliate site (i.e. RetailMeNot) before making the purchase to get the discount.
  • Automate Commission Adjustments - Did you know 15% of all online sales are canceled, returned or fraudulent?  You can automate the process to reverse commissions on all of these bad orders at the end of these purchases. For those sales that are valid, not all have the same value. Adjust commission rates based on both the product margin and if the purchase was made by a new or existing customer.

Many major retailers drive a third or more of their sales through affiliate. The advantages are clear. If done properly, you can scale at a predictable and profitable rate across the massive universe of sites that reach your target audience.

For more information about how affiliate marketing done right can drive your business, please contact me on Twitter @mwrise or contact Rise.

03/09/2015 at 12:00