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.