This article is the second of a two part series on setting
up your own affiliate program. In addition to starting an
affiliate program, you must manage it and keep track of it.
The following information will show you how
Managing and tracking your affiliate programs
The key to any business is to promote your products and
services to people who need them. Your affiliate business is
no different. In order to earn commissions you must put your
products in front of the people who need them. The beauty of
marketing affiliate programs is that it is anybody’s ball
game. This is the one place you can burrow deep into your
own niche and stick it to the so-called 'big wigs'.
You may create your own affiliate program or you may promote
other popular affiliate programs that are related to your
product or service. The best way to manage and track
affiliate programs is by creating your own affiliate program
website. This is where you can list all your affiliate
programs.
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Staying Organized
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There are many affiliate networks that provide multiple
affiliate programs and merchants. Keeping a track of all
affiliate programs in a single network is easy. You would
generally be given one username and password as well as a
single interface that controls all the programs. However, if
you have many of your own affiliate programs or you promote
several stand-alone affiliate programs from your website,
the task of staying organized becomes a bit more complex.
There are many software programs available on the Internet
that organize and keep track of all data associated with
affiliate programs. Some of these are My Affiliate Program
2000 and Affiliate Assistant 1.0. These programs maintain
databases pertaining to information about all your affiliate
programs. A typical database would consist of the following
fields:
* Program Name
* Date joined or created
* Contact Name
* URL
* Email Address
* ID
* Password
* 1st Tier Percent
* 1st Tier Sale
* 2nd Tier Percent
* 2nd Tier Sale
* Total Income
* Additional comments
Once the program information has been entered, you can add
information about individual sales made and checks received.
The program then keeps track of sales to date, amount
collected and receivables. Besides, some of the advanced
software programs also provide analysis and comparison tools
for all affiliate programs. If you take the time to input
collected data about clicks, sales, and page views,
impressions, emails sent etc. from your various campaigns
and enter all of it into the program, it will show you:
* Click to Sale Ratios
* Impression to Sale Ratios
* Amount Earned Per Impression
* Amount Earned Per Click
Apart from these are a few other tips that might help you
manage your affiliate programs.
* Always ensure that your website is up and running. On a
Daily basis type your URL into your browser's address bar,
refresh the page and find out. The danger in not knowing
that your site is down comes when you are running a pay per
click advertising campaign. The click costs add up whether
your site is functional or not. If your site is down, you
are paying for advertising, but no one is buying.
* Check your statistics daily, maybe even twice a day. This
will give you a better idea of your income trends and also
highlight affiliate programs that bring your business. Visit
the statistics interface for each network and individual
affiliate partner and input your total revenues into any
accounting software. Using such software frequently will
also keep you informed as to whether certain checks have
become overdue.
* Be prompt in answering any queries from affiliate partners
or customers, especially when these are about your products
or services. This probably means that the customer trusts
your site and is thinking of buying your product.
* One of the main aspects of any affiliate program is
residual income. You've got to make the most of each and
every customer you receive. The best way to do this is by
promoting affiliate programs that offer residual commission.
* This allows you to repeatedly get paid for work you do
once. For example, if a visitor arrives at your site and
purchases auto responder services, newsletter subscriptions,
ISP/hosting services, you will collect a portion of the
monthly fees for as long as they remain a paying customer.
Membership sites are a good way to collect residual
commissions and are steadily growing in popularity. There
are many affiliate programs that offer residual commission.
* A well placed recommendation placed at the end of an
outgoing email can bring in extra sales. Target your
audience, what are their specific needs? If you can offer
them a product they need/want, often times the end result
will be a sale.
* Finally, track all your affiliate links. The best way to
accomplish this is by setting up tracking software for your
affiliate links. There are a number of scripts that will do
the job. Most tracking programs typically allow you to setup
tracking links for any product you promote, telling you how
many hits each product has received, and where the hits are
coming from. A more detailed view of tracking and analysis
is given in the section below.
* It is not enough to have a few banners and classified ads.
You must provide as much help as possible for your
associates if you want them to be successful. You should
have tested and proven endorsements, testimonials, sig
files, ezine ads, and other unique tools and techniques. You
must also make yourself available, either through email or
the phone, to help your affiliates implement these tools and
to answer any questions they may have.
* Whether you run your own or participate in an affiliate
program, you must be able to determine what methods work
best in a particular medium. For instance, which ezine ads
work best and in what ezine; which banner ads produce the
greatest clickthroughs and from which sites or banner
exchanges; and where on your website is the most effective
spot to include a testimonial.
* Some affiliate programs, have implemented unique payment
procedures to get affiliates their commission checks on a
timely basis. Some of these procedures include: online
electronic payment services, direct bank deposits and checks
by fax. If you can solidify your payment procedures from the
start, you will save yourself an administrative headache and
more importantly, keep your affiliates happy and working to
promote your program.
This concludes my series on starting your own affiliate
program. This information should be all you need to start,
manage and track your own affiliate program.
Warmly,
Vj.Uyo
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Affiliate Marketing
News Affiliate by feed
What Is Affiliate Marketing?
Digital Thoughts
In her opening keynote address at Affiliate Summit, Anne Holland of Marketing Sherpa, said that affiliate marketing bounties and commissions will reach $6.5 billion in 2006, or roughly 40% of projected 2006 online advertising expenditures. As she writes on Marketing Sherpa yesterday, “This (number) includes retail, personal finance, gaming and gambling, travel, telecom, 'Net marketing' education offers, subscription sites, and other lead generation, but it does not include contextual ad networks such as Google AdSense.” Assuming 30% margins for the advertisers, which collectively seems a bit low, her prediction indicates that affiliate marketing will generate more than $9 billion dollars in revenue, more than half of the projected Internet advertising revenues for 2006.
This year’s projected $6.5 billion in commissions represents a more than four-fold increase over the $1.5 billion the Marketing Sherpa team came up with in January of 2005. And, if accurate means this year’s tradeshow attended by roughly 1500 should see multiples more in future incarnations. The trouble for those like me in the audience, ones with an ad network and lead generation background, is trying to understand exactly what affiliate marketing is. If Affiliate Summit is any indication, affiliate marketing consists of the following - technology solutions, big brands’ merchant programs, traditional webmasters, organic search traffickers, ppc arbitragers, lead generation, and a large email undercurrent.
Unlike Ad:Tech, noticeably absent from Affiliate Summit are companies like Fastclick (part of ValueClick), Advertising.com, Specific Media, Undertone Networks, Casale Media, Revenue Science, Tribal Fusion, and the one for whom I represent, Revenue.net. These are the major display ad networks, the largest doing tens of millions monthly in revenue. Also absent from the show were the search engine marketing companies, i.e. those that offer large and small businesses in-house, ASP, and fully outsourced solutions for managing their presence on the major pay per click engines. Many of these companies focus on arguably the most technologically and algorithmically difficult piece, bid management.
At first glance, it might make sense for display ad networks and search engine management companies to display at Affiliate Summit. Those in attendance have traffic for which they need ads, as well as place ads on engines for which they could benefit by doing it more efficiently. The reason they don’t is that, at its core, affiliate marketing has a decidedly traffic-centric bias. Those displaying at Ad:Tech, SES, and OMMA, for example, don’t mind meeting publishers, but their target audience is certainly not traffic generators; it’s advertisers. Affiliate marketing on the other hand is really about the affiliate and what those who want to service them need. And, it’s with this lens that has a traffic bias that we can evaluate the pieces that comprise affiliate marketing - technology solutions, big brands’ merchant programs, traditional webmasters, organic search traffickers, ppc arbitragers, lead generation, and a large email undercurrent.
Affiliate marketing is part technology solutions, because many of the companies that want to work with third party traffic are ones that are either too small to create such a solution themselves or so large that doing so not only requires too much bureaucracy but ultimately a poor allocation of resources. As a result, companies such as Linkshare and Commission Junction exist to offer them just what they need to do. For many of you, who have spent time in internet marking but away from affiliate, the thought of a gatekeeper for offer management seems inefficient and limiting, unless that gatekeeper has guaranteed access to traffic. In part two we will discuss in detail the additional components that make up affiliate marketing.
Affiliate marketing not a game of how many, but which ones—and how to make them play
In a world where bigger often is viewed as better, some online marketers have taken this approach to populating their affiliate marketing programs. If they know they’ll pay no commission fee to an affiliate unless a click-through from that affiliate’s site actually produces a sale, what’s the harm, the rationale goes, in signing up as many affiliates as possible?
The answer to that question isn’t as obvious as it may seem. Some experts say keeping an affiliate program wide open is a strategy that’s riskier than, and at the very least not as rewarding as, limiting and defining affiliates in a retailer’s program.
“I’ve preached for years that people should focus on quality over quantity, but I still see too many e-retailers focus on getting tens of thousands of affiliates in their program without any apparent concern for quality,” says Shawn Collins, an affiliate program consultant and co-founder of the annual Affiliate Summit Conference.
Come one, come all
Collins and others cite a major drawback of a “come one, come all” affiliate program as a potential loss of brand control when marketers don’t have the time to keep up with every affiliate site on which the brand might appear. With different types of affiliates producing under different circumstances, categorizing affiliates and adapting offers accordingly may make more sense for marketers.
That’s tough to do when affiliates number in the thousands—one reason full-service affiliate networks have emerged. Yet, odds are marketers who leave all their affiliates in the same bucket are leaving money on the table, some experts say.
On the other hand, simply cutting out affiliates or barring program entry just for the sake of getting the program to a size more easily managed isn’t necessarily the best approach. Dean Rist, director of direct marketing at iRobot, which manufacturers and sells room-roaming automated vacuum cleaners, says he sees no downside in retaining most affiliates that sign up for his program, even ones that aren’t active.
“They’ve raised their hand and shown a degree of interest in your brand,” says Rist, who has been using the affiliate marketing network of DoubleClick Performics Inc. for two years. Rist sees inactive affiliates as a kind of lead generation program. “If I have to generate more revenue and boost the program, this is the group of people I am going to try first,” he says.
Advocates of cleaning up overgrown affiliate programs and those less willing to chop are after the same thing: better program performance. So the real question, experts say, is not so much a generic one on the merits of a larger versus a smaller program, but on the break-even between program size and the time and resources an individual marketer has to actively manage a program.
And marketers can’t afford to forget that managing an affiliate program isn’t just about recruiting the greatest number of affiliates or finding those that are the best fit; it also is about working with affiliates to identify and provide tools and incentives that keep them working on the marketer’s behalf.
“It’s important not only to focus on recruiting, but also after they come through the door, to have a plan to keep them active and retain them. So you should have different processes in place for educating affiliates and supporting them. If you get to a point where you can’t do that, then obviously you have too many affiliates,” Collins says.
Activity
Experts say the key metric in right-sizing an affiliate marketing program is not the number of affiliates that have signed up but the number that are active, meaning they’re driving visits to the marketer’s site, and the number that produce, meaning they’re driving sales. Those numbers will be fractions of the number constituting a marketer’s entire pool of affiliates.
The frequently cited 80/20 affiliate marketing rule—80% of a marketer’s sales will be produced by 20% of affiliates—may be closer in some cases to a 90/10 breakdown, industry veterans say.
Chris Henger, vice president of affiliate marketing at DoubleClick Performics, provides this rule of thumb based on the experience of some 250 advertisers using the vendor’s affiliate network: about 35% of affiliates approved for a marketer’s program drive visits, and of that percentage, about 35% produce sales. Henger contends these ratios likely will be higher if a retailer is pursuing a very small program—fewer than 100 affiliates—and a very selective affiliate strategy.
Frequently, long-inactive affiliates come to light when there’s a change of management at a marketer or a program passes into the hands of a new affiliate network vendor. Henger says there’s always value in growing a program’s affiliates in a controlled manner but also in cutting away dead wood.
“The primary reason you clean up and contract the size of a program is for your ability to devote time and energy to the right affiliates,” he adds. Beyond the trigger of organizational changes, DoubleClick Performics recommends cleaning up affiliate marketing programs and deactivating inactive affiliates at least twice a year to keep program management efforts centered on affiliates actively engaged in the program. For some affiliates, deactivation has the effect of jarring them into re-registration and action, experts say.
Other affiliate networks such as ValueClick Inc.’s Commission Junction also recommend removing from merchants’ affiliate programs affiliates that haven’t produced a sale in six months. “There is no point working with dormant affiliates,” says Melissa Salas, director of marketing at Buy.com.
Ample opportunity
From the perspective of having formerly managed an enormous program that retained dormant affiliates in the hope they one day would produce a sale to now managing the current Buy.com affiliate program with Commission Junction that culls inactive players, Salas prefers the latter model. Scaled to support three tiers of affiliates, the current model provides ample opportunity for every size affiliate who really wants to participate in the program to do so, she says.
“We have the staff to manage these super, middle and lower tier affiliates and provide the tools necessary for each to succeed in advertising Buy.com,” she says.
Others have found success with a different approach. Rist has gone after dormant affiliates who registered for a program but never took any further action by offering them something extra. For an affiliate program he managed in a previous position with an audio equipment manufacturer and marketer, for example, Rist says he generated an incremental $400,000 out of registered affiliates that had never put up a link to the marketer’s site by offering them a higher share of revenue to participate through the holidays, a peak sales time.
“You don’t ever want to leave rocks unturned,” he says. “But you don’t what to put a huge amount of effort into it, either.”
The rules for optimizing an affiliate program can change as it matures, and veteran affiliate marketers say this is where working to cement relationships with those who’ve emerged as top producers, rather than simply maximizing program sign-ups, gets important. One way Jos. A. Bank Clothiers Inc. keeps driving results from its 7-year-old affiliate marketing program with DoubleClick Performics is to give top-producing affiliates special commission incentives to secure prime placement of links and offers on those affiliate publisher sites.
Jos. A. Bank also gives top producers access to more detailed information on upcoming events and offers. The strategies have helped grow affiliate sales on JosBank.com by an average of 40% a year since 2001, the retailer says. “We wanted an affiliate marketing program that would engage consumers, expand our online presence and drive long-term growth,” says Pete Zophy, divisional vice president of e-commerce.
Luring producers
Consultant Collins says selectively offering incentives such as a higher commission or special deals or tools to work with is a good way to lure better producers. Some retailers, for example, will lift their ban on search engine trademark bidding for a small number of chosen affiliates.
“They don’t want affiliates that are simply going to bid on the terms, but there are some affiliates that will do a whole campaign around it,” Collins says. “These affiliates are taking a money risk with a search campaign, and they are doing a lot of hands-on work. The idea is this incents an affiliate to do some of the work on a campaign for you.”
At Drs. Foster & Smith’s 1-year-old affiliate program with network provider LinkShare Corp.—the e-retailer’s first foray into affiliate marketing—the emphasis so far has been on growing the program. To date, Gordon Magee, Internet marketing and analysis manager, has had little concern about vetting or limiting what’s already developed into a program with about 1,800 affiliates. “Part of the value of having a partner like LinkShare is that they screen affiliates for you,” he says.
While he doesn’t rule out special incentives for special affiliates, the program has done little of that so far. “It’s been more about getting our name out in the marketplace and developing relationships with affiliates,” he explains.
Magee also believes that short of any special incentives, affiliates already benefit from the site’s high conversion rate, which he describes as “well into the double digits. We don’t think of affiliate marketing as a one-way street, where we keep offering things to get positioning. We believe there is genuine value for the affiliate simply because our conversion rate is high,” he says.
Special incentives
Where special incentives may most likely come into play for the pet products retailer in the future is with a particular category of affiliates: loyalty sites that offer shoppers something retailers can’t offer themselves. The college savings program at UPromise.com provides one example of that model.
“For us, affiliate marketing has really been a customer acquisition approach. But over time, companies whose brand name is reasonably well-known will have less need for affiliates to get them new customers,” Magee says. “Yet shoppers go to those loyalty sites regularly, and if you’re not there, you won’t get their purchases.”
In settling on the right size and incentives for their affiliate program, experts say marketers should consider the type as well as the number of affiliates. Whether the sites are loyalty and rewards sites, search specialists, community and content sites, or any other type of affiliate publisher, Henger says marketers need to understand an affiliate site’s business model and how it generates traffic to decide whether it’s a fit.
“If you’re a marketer that appeals to all of those types of sites, you are probably going to have more affiliates in your program than someone who says, for instance, that they don’t want a lot of search specialists because they have their own strong search engine optimization program,” he says.
Another factor in calculating an affiliate’s value to a marketer’s program is whether key competitors are linked on that affiliate’s site.
As both affiliates and marketers get more sophisticated, new metrics for quantifying affiliate value are emerging; for instance, lifetime value metrics on the type of consumer an affiliate delivers. But whatever the depth and detail of that assessment, one rule of affiliate program management remains the same: the top-producing affiliates—by whatever valid measure a retailer employs—should get most of the retailer’s attention.
“That’s the single most important thing in growing an affiliate program, even beyond incentives,” Henger says. “Figure out who your top producers are, and then give them your energy.”
Forgotten Traffic Tactics
The August issue of Affiliate Classroom Magazine is now available and the focus this month is forgotten methods of generating traffic.
This issue touches on how offline advertising has a hidden goldmine of traffic and eager buyers; where to find this type of advertising; how to set up your offline campaign; and how to get print, radio or television advertising for far less than others are paying.
Another article covers how ezine advertising is effective, and which style ezine will get you not only visitors, but the visitors that are ready to buy.
“The Goodbye Page” will help you capitalize on your visitors’ impulse buying instinct as they try to leave your site. According to Affiliate Classroom, this technique will double your chances of making a sale, and it gives you another opportunity for an upsell.
Finally, there is a tip about a site that most people know about it, but apparently they are not using it. You can advertise for free on this site, which gets over 5 billion page views per month and ranks #34 among the most-visited websites in the world.
http://www.affiliatetip.com/affiliate-classroom
Check out the new issue
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