What is Affiliate Marketing and Why Aren’t You Doing It?
It is common knowledge that simply buying adverts directly for traffic is a quick and relatively easy way to promote your business online, it is also potentially a quick way to burn through your precious marketing budget with nothing to show for it, which for a startup can mean an early death. Fortunately there are other ways to acquire qualified traffic which can be very effective and to some extent much less risky. Affiliate marketing is one such way.
What Exactly is Affiliate Marketing?
An affiliate in this context is someone who promotes the products or services of a company in exchange for a commission on any sales resulting from the traffic sent by that affiliate. Usually it works by the affiliate placing your ads, typically in the form of banners or text links, on their site and if someone clicks on an ad and then buys something, the affiliate earns some percentage of the sale price. So that means you, as the merchant, only pay for actual sales (or some other action you decide on), instead of paying for clicks or ad views which often may not produce any sales. Perhaps the best known affiliate program these days is Amazon.com which offers millions of products for affiliates to promote.
Affiliate networks provide a hosted affiliate marketing solution for merchants. In other words a merchant who wants their own affiliate program can just use an existing affiliate network which provides all the tracking software and usually also access to a large number of existing affiliates who may be interested in promoting the merchants offerings. This combination provides a fast track to getting your affiliate advertising online with active affiliates, however it comes at a price since the affiliate networks will charge the merchant setup and ongoing fees for the service. However they also handle payments to your affiliates which saves you a lot of hassle and they have much experience dealing with cheats and attempts at fraud so this can save you money and could easily offset the costs of using such a network.
Well known affiliate networks include Commission Junction (CJ), ShareASale and for a while there was even a google Affiliate Network but that particular one has been sent to the Google graveyard. There are also many other affiliate networks around of varying size and capabilities.
Companies that prefer to keep things in-house instead of using an affiliate network like CJ, can either buy ready made affiliate tracking software such as iDevAffiliate or just develop their own. The advantages of keeping it all in-house are of course that you retain full control over your affiliates and can perhaps better integrate it with your existing systems and have a more flexible affiliate advertising program which you can change at will. Also you wont be paying sometimes large ongoing fees to an external network which means you make more money or can pay your affiliates a higher commission.
An affiliate program is a great way to market your products but affiliates often need advice and encouragement as well as various resources they can use to maximize their efforts. A new affiliate can easily become disappointed when money doesn’t start to roll in from day one since they are only getting paid for actual sales as opposed to earning for every click or ad view which they may be more used to with Google Adsense or similar. In the long run they could actually make much more money with an affiliate program but it can take some time to get going. It is advisable to appoint someone in your company as an affiliate manager to make sure your affiliates are as effective as possible and to ensure fresh marketing material is provided and also to seek out the most productive affiliates who will often demand custom terms. If doing an in-house affiliate program, having someone dedicated to building up a network of productive affiliates is even more critical since you wont have access to an existing pool of affiliates.
What every affiliate manager dreams of is the so called ‘super affiliate’. These rare creatures are the affiliates who have mastered the craft and wield huge amounts of high converting traffic which they can send your way, if you make it worth their while. It is quite common for super affiliates to demand higher commissions so it is wise to allow some room for this when deciding on your commission structure. They also may ask for custom promotional material such as graphic banners or splash pages, so providing them with these things can help keep them on-board promoting your products. However ultimately the thing that will ensure the super affiliate stays with you is a high conversion rate and income. If your product doesn’t sell then they will drop you in a flash. Constant refining and testing of your sales copy and perhaps even the product itself will help keep your conversions up and monitoring your affiliates statistics will provide a wealth of actionable data.
Another use for affiliate programs is to encourage integrations with other companies – cross promotional deals can rapidly boost your business with a flood of new members and sales and extend your reach into new markets. Having an affiliate program makes such deals far more attractive to other companies, particularly when you are smaller and don’t yet have loads of traffic to send their way.
Affiliate advertising is certainly worth investing in, although it may take longer to get started as you need to find affiliates first and they need to then find qualified traffic to send you, instead of you just going straight to Google and buying a bunch of clicks. However in the long run you can make more sales for far less risk and you will eventually have a network of affiliates who know and trust you and are ready to promote any new product you send their way.
Have you tried affiliate marketing yet? Is there anything preventing you from moving in that direction at the moment?