An affiliate program creates an arrangement wherein a merchant pays a site owner (an affiliate) a fee to send them traffic which turns into new business. The affiliate sites place links within their site to the merchant’s site. The affiliate site then gets paid for each click, or for each sale depending on the arrangement as a result of that link. Affiliate marketing thus allows site owners to monetize their traffic without the need to hold inventory, fulfill or deliver services to the end consumer.
In practice, there`s only so much money you can make with the odd affiliate link here and there. To truly capitalize on affiliate marketing, your need to ensure that you can drive high quality traffic to you site at a sensible economic rate and that the programmers you are promoting are those that will attract the greatest click-through ratios and achieve optimal conversion rates.
From a merchant perspective, it is essential that you understand what attracts and motivates affiliates in designing or managing an effective affiliate programme. Getting the right affiliates on board is not only a great way of selling products on the Internet but it`s also an excellent way of boosting your reputation.
In general terms, the most effective means by which to promote your programme generally lie in networking, the affiliate networks themselves and in making direct contact with some of the high traffic “super affiliates”.
Most affiliates are ultimately motivated by earnings per 1000 clicks or EPM as it is commonly called. The factors determining this will include your sector, products, consumer brand awareness, the level of competition and the quality of your own site, together with your pricing strategy. All of these factors need to be correctly aligned in attracting and perhaps more importantly retaining the right affiliates. Major brands may offer lower headline commission rates but will engender greater consumer confidence and thus higher click-through rates and conversion rates and potentially better earnings. 10 sales at £20 commission from a major brand will be more attractive the one potential sale at £300 from an unknown market entrant.
That isn’t to say that new market entrants are unwelcome. Quite the contrary. New innovative offerings in a competitive space can server to help to differentiate one affiliate from another and most experienced affiliates will spread their risk accordingly.
Headline commission rates aside, affiliates are looking for merchants with attractive, FAST, easy to use sites (still sadly a minority). It takes a great deal of effort, time and money to attract traffic to an affiliate site in 2009. Few affiliates will be prepared to see their hard-earned visitors click the back button in frustration at a poorly designed or badly constructed merchant site.
If yours is a commoditised product or you have a large range of products, make sure you provide the networks and your affiliates with a data feed. This is particularly vital for price comparison sites and a decent Google Base feed may also help drive free traffic from Google product search and from the new `One Box`, part of Google`s universal search strategy.
Make sure programme terms are fair and that any commission reversals can be fully explained and justified. Keep you affiliates` attention with well constructed offers and voucher codes and be sure that the validity period and conditions surrounding these are made abundantly clear so that your affiliates can stay within the latest IAB guidelines concerning the use of voucher codes.
Communication is essential: whether you are working directly with your affiliates or via the networks and their account management teams, make sure that communications are clear, timely and positive. So many merchants rattle their affiliates with micro complaints, negative communications and poorly designed promotions. No-one wants to promote a £0.0002p saving on a bottle of shampoo between 3pm and 5pm this afternoon “sorry we forgot to tell you earlier”. No-one wants to be told that “we are currently reviewing the validity of the affiliate channel in the context of our upcoming marketing plans”. Positive. Timely. Accurate. Those are they keys.
Ultimately, any UK affiliate marketing program will only succeed so far without the backing of the major affiliate publishers. Getting them on side is only the first part of the equation. Handle the programme well and it will mushroom.
Lammo.net is one of the most popular Affiliate Marketing Blogs in the UK. With a reputation for “telling it like it is”, it has attracted a very loyal following amongst the Internet Marketing community as a whole. Lammo is updated several times a week with news, comment and opinion on the very latest topics to affect the Affiliate Marketing Industry.