How to create and Affiliate programme

Analyse the Competition

Before you start an affiliate program, it is good to analyse what your competitors are doing. The competitive environment will help you understand how to set commissions, promotions and objectives.

Decide on the Goal for your Programme

Setting clear goals for your programme will help you identify the affiliates you wish to recruit. An affiliate marketing programme should consist of a balanced mix of affiliate partners.

Short-Term or Long-Term?

If the campaign’s goal is short-term, e.g., launching a new product or promoting a sale, it might be best to create a high incentive campaign that will attract many affiliates and drive traffic fast. If the goal is longer-term, such as launching in a fresh territory or expanding your customer base, you will need to partner with sites to which shoppers continually return.

Who is the Target Customer?

Think about how your target customer shops, e.g., what sites they read and emails to which they subscribe. Select affiliates that specialise in your business area and attract your target customer.

What is Your Goal?

What is the purpose of the programme? Are you trying to boost revenue? Do you more newsletter subscribers? How much do you want to spend to acquire a customer? Some common goals that you might have for your programme could be:

  • To increase the sales volume by 5% year on year
  • To increase the sales value by 10% month on month
  • To increase average order value by $20 by October 2017
  • To increase the number of active affiliates in the programme by 30% by the end of the year

Choosing an Affiliate Network

There are many affiliate networks available, and the same site may well be on several affiliate networks. Consider the following when selecting a network:

  • Fees and agreements. Some networks will want to charge a monthly fee whilst others will be free. Also, be wary of entering into long term agreements. A 30-day notice period is usually plenty.
  • Relevant publishers. Publishers with an established affiliate business are likely to work with specific affiliate networks and may be reluctant to join another just to work with you. Request a list of affiliates that are relevant to your business from each network.
  • Other publishers. Avoid networks with publishers that you would not want to be associated with (e.g., gambling) as your brand may end up alongside these. Consider whether the network works with any large brand which will attract high-quality publishers.
  • Reporting. What is the quality of the reporting available? Can you drill down to see where the traffic and sales are originating?
  • Support. What level of support will you receive? Will you have a dedicated account manager?

One frequent mistake is to think that you should look elsewhere if your competitors are on a network. The presence of competitors may be a good thing as they may well be there as this is the best source of affiliates.

Create Collateral for Publishers

Some publishers will require collateral to help promote your business to their audience, so it is best to provide as much collateral available as possible when inviting publishers to join your campaign. Content includes logos, digital banners and videos of your products.

Recruit Publishers

Once you have created your programme, it is time to recruit publishers. Your aim should be to get publishers on board who have an audience that matches your target customer. Affiliate networks will have a browsable list of affiliates. You should also get a list of suitable publishers when you onboard to a new network.

Monitor Results

Once you have your affiliate programme up and running, you need to measure your progress against your set goals. For this, you need to decide the Key performance indicators (KPIs) you will be using. Some KPIs will be sales related; however, as your campaign’s health depends on recruiting and retaining good affiliates, you should also watch metrics covering the quality and quantity of affiliates signed up to your programme. Commonly used KPIs include:

Affiliate Traffic

Monitor trends in your affiliate traffic over time and compare to your other sales channels. If your affiliate traffic is declining, it is time to engage with your current affiliates and recruit more new ones. Declining affiliate traffic may be because other advertisers offer better commission or your website is not converting. Ensure that your affiliates have enough incentive to promote your products.

Revenue from Affiliates

Revenue is a measure of the overall impact of your affiliate programme on your business. If revenue is declining this could be due to a drop in traffic (see above). Alternatively, if traffic is unchanged but revenue is down, it could be a problem with site conversion rate.

Percentage of Active Affiliates

An active affiliate is an affiliate which generates sales within a set period (as decided by the advertiser). This measure provides valuable feedback on the quality of your affiliates. If only a fraction of your affiliates are active, it is time to re-evaluate your affiliate recruitment strategy. It may be that you are not targeting the right segments.

Note: Before measuring this metric, you will need to decide what you consider an ‘active’ affiliate. This is defined as an affiliate who generate x sales in y period, e.g., one sale in three months.

Affiliate Marketing: Types of Publisher

A publisher is an individual or company that earns commission from promoting an advertisers’ products or services. This may be through links in copy on websites such as blogs or articles, social media posts, newsletters, or clickable banners or images.

The most common publishing types are:

Bloggers and Content Sites

Bloggers and content sites (e.g., review sites, online newspapers) build up an audience by writing engaging and informative content. Affiliate marketing is one of the ways they monetise their content and audience. They may promote affiliate products directly within their content or alongside it. An example of a site supported by affiliate income is PCMag.

Offers, Cashback and Coupon Sites

Consumers love discounts and merchants can use this to their advantage by distributing their deals on offer sites. These websites then drive traffic to the offer on the advertisers site. Offer websites include:

  • Voucher/coupon sites. These sites list codes by brand and type. Examples: my voucher codes, voucher cloud
  • Cashback sites. These sites pay out all or most of the affiliate commission they receive to their members. They also list codes that can be used in conjunction with the cashback. Examples: Quidco, Topcashback
  • Apps and browser extensions. These help consumers quickly find discounts while shopping, e.g. camel camel camel, Honey
  • Social Media and blogs. Sites related to discussing discount codes.

Shopping Comparison Sites

Shopping comparison sites were popular in the noughties, but most of them disappeared when Google moved into this space. The ones who remain make some of all their revenue through affiliate schemes. Examples:  Pricesearcher, Pricespy.

Email Marketing

Some publishing businesses have built up large email marketing lists, which they contact regularly. The emails will be a mixture of helpful content and promotions. Emailers work hard to build trust and authority with their subscribers so when they recommend a product, purchase rates tend to be high.

An example organisation that has built up an extensive, targeted list is Bounty. Bounty provides new parents with a hospital gift pack with samples from a range of brands. Alongside the pack, parents can sign up for Bounty’s newsletter, which has tens of thousands of subscribers.

Social Media Influencers

Influencers are users on social media platforms such as Instagram, Youtube, Facebook, TikTok and Twitter who have built up a substantial following. Whilst high profile influencers can demand hefty upfront fees for promoting products, others will earn additional income through affiliate commissions.

How Affiliate Marketing Works

An advertiser that promotes its products via affiliate marketing is running an affiliate scheme or programme. Some merchants will manage their own programmes, where they are responsible for paying the advertiser directly. However, most will employ an affiliate network that will handle all the tracking and payments to publishers on their behalf. An affiliate network will also have existing relationships with publishers, enabling them to promote the merchant’s programme to their current advertisers and start driving referrals quickly.

The advertiser typically only pays on results with affiliate marketing, which is an attractive model for merchants. On top of the commission, some advertisers will offer opportunities to pay for placement to get additional exposure.

The process of affiliate marketing is as follows:

  1. Potential customer lands on the publisher’s website
  2. Customer clicks an affiliate link and it taken a landing page detailing the advertiser’s product.
  3. Customer buys product and tracking software records the purchase data and reports this to the network.
  4. Publisher earns a set percentage of the transaction value as a commission.

The affiliate link the customer clicks upon contains a unique code which identifies the publisher. The affiliate network the transaction using this code and pays out depending on their programme’s terms (e.g., 5% of sales not including shipping).

For example, when purchasing a new bike, a person may research offers on a bike-focused website (e.g., Singletrack). They read a review they like (a ‘Giant’ bike) and click through to the Giant site to purchase. In this case, Singletrack is the publisher, and the advertiser is Giant. Giant would pay Singletrack a commission for generating a sale through their site. If an affiliate network facilitates the programme, they will manage commission and tracking, and the advertiser and publisher will not communicate directly.

Tracking

Generally, affiliate programs work on a commission basis where the commission is awarded to the last publisher site which was visited before the consumer made the purchase.

To track the sale, the advertising merchant (or the network they work with) gives each affiliate a unique link to record who was responsible for a sale. When a user clicks that link, a file called a cookie is saved on their device. An affiliate cookie does two things:

  1. It helps the merchant attribute the sale back to the right publisher.
  2. It records the date of the interaction. Typically, publishers will get paid if a sale is made days or weeks after the visit. The advertiser sets this period.

When a consumer clicks upon a publisher’s affiliate link, they will be taken to the advertiser’s site. At the same time, a cookie will be stored onto the consumer’s browser, allowing the network to record the details of the consumer’s journey.

When a consumer purchase from the advertiser’s website, they will be taken to a confirmation page which contains the network’s conversion tracking. The affiliate network can now track the consumer’s purchase journey to purchase, enabling them to award the publisher’s commission.

Affiliate networks are services that mediate between the publisher and the advertiser. Advertisers publish their affiliate programs on an affiliate network, and publishers can search the network to find programs they wish to promote. An affiliate network manages the relationship between publisher including advertiser tracking and payments.

To use the services of a network, advertisers and publishers must first create an account with the network. Once they have been accepted, advertisers can add their programs to the network, to which publishers apply.

Publishers can apply to any programme in which they wish to participate. Once accepted as an affiliate partner with the advertiser, they have access to a choice of promotional texts or creatives for use on social media, emails or websites. The publisher places the affiliate link on their site, and when potential customers click on the link, they are taken to the advertiser’s website to complete their purchase. The visit is tracked by the affiliate network so that the sale can be attributed to the publisher.

Affiliate networks will typically offer two levels of service:

  • Self-service. Where the advertiser will manage their programme, including recruiting affiliates and managing commission.
  • Managed service. The network will manage the programme on the advertiser’s behalf, enabling them to employ best practice in running their programmes.

Affiliate Network vs Direct Affiliate Marketing?

Advertisers can work directly with publishers to promote their products, but it is more straightforward and secure to use an affiliate network. Benefits of using an affiliate network include:

Managed Affiliate Solution

Managing an affiliate programme is complex. Affiliate networks streamlines the process by providing technology, end-to-end tracking, payment and reporting making it easy to track, monitor and tweak your programme. The larger networks will also have a range of publishers already signed up to their network, ready for an advertiser to onboard.

Quick Programme Launch

Bigger affiliate networks will already have a range of publishers on their books who can be swiftly onboarded onto any new programme. Joining an established network means publishers are more likely to trust you and your brand, even if they do not know you. Having systems in place for tracking and payment offers publishers peace of mind that they will get paid.

Affiliate networks offering account management can support advertisers with reporting that provides feedback on performance and benchmarking. They can also suggest campaign ideas and recommendations to help the advertiser achieve their objectives.

Approval of Publishers

Publishers must apply to join an affiliate network and then get request approval for each advertiser program. Not all publishers are accepted, so your products are only promoted by publishers the network has decided are good partners for the advertisers on their platform.

Sales Tracking and Reporting

Affiliate networks should provide you with a comprehensive dashboard that tracks impressions, clicks, conversions, sales and revenue and generates reports. You can monitor which publishers and campaigns generate the most sales, allowing you to optimize your affiliate marketing.

Benefits of Affilate Marketing

Affiliate marketing lets an online retailer (referred to as the advertiser) increase sales by allowing others targeting the same audience (known as affiliates or publishers) to earn a commission by recommending their products.

The publisher promotes products using a unique link. They get paid a commission when a visitor to their site clicks on this link (e.g., a banner, logo, or text link), goes to the advertiser’s website and performs a particular action. Usually, this is completing a transaction such as buying a product or subscribing to a service.

Benefits of Affiliate Marketing

Affiliate marketing is a massive opportunity for all eCommerce businesses. In fact, affiliate marketing is responsible for driving up to 16% of eCommerce sales in the USA (Source: Business Insider). Benefits include:

Targeted Traffic

Whatever your product type, there will be publishers who are focused on your niche. Sites such as review site and bloggers can send targeted traffic to your products. For example, a pram review site might wish to have affiliate links to pram retailers to monetise their content.

Pay on Results

Affiliate marketing is a performance marketing channel with payment only made if a sale is completed. This model makes affiliate marketing a low-risk channel and attractive to merchants. Some affiliates will want to be paid for impressions, but this is much less favourable for the advertiser as it does not directly relate to sales.

Publishers may offer the opportunity to promote offers at additional cost. Whilst many affiliate networks are free to use, some will charge a monthly subscription.

Direct

Unlike some channels (e.g., online marketplaces), the merchant can invite them to opt-in to marketing messages after the sale.

Low Start-Up Costs

Setting up an affiliate programme through an existing network has limited setup costs.

Boost Brand Awareness

Consumers like to buy from retailers with which they are familiar. Affiliate marketing enables companies to grow brand awareness by appearing on multiple contextually relevant sites across the web. For example, by launching an affiliate scheme and recruiting the right advertisers, a clothing manufacturer could appear on numerous fashion-focused blogs.

Expand Internationally

The larger affiliate platforms will have an international presence and enable your brand to reach publishers worldwide.