An Advertiser’s Guide to Working with Affiliate Networks

It was just last week that I received a call from an advertiser looking to work with an affiliate network to drive sales for his exercise insoles product. He had just launched the ecommerce site, and appeared to salivate over the idea of performance marketing and what it could do for his business. “You mean I only have to pay you when I sell a product? Sold baby, sold!” I recall him saying. After having reviewed his offering, it was clear that much more work was required and that he simply wasn’t ready on many levels. And off I sent him, like a grade 5 student, to complete a homework assignment to get him prepared.

This scenario has played over and over again in my daily work life as VP of Sales for MediaTrust. All too often we receive calls from advertisers with great products that are unfamiliar with the nuances of performance marketing, how affiliate networks operate, and what is needed to be ready. These experiences have inspired me to share some high level thoughts on how advertisers can be better prepared, so here goes:

1) Know Your Numbers

a. Affiliate networks will want to know how well your offer converts (what portion of the clicks turn into sales/leads), so make sure to track that. This conversion rate metric is used as ammunition when affiliate managers have to sell your offer to affiliates. The higher the conversion rate, the more appealing your offer is. If you have the conversion rate broken down by traffic type (email, web, search etc.), that’s even better.

b. Make sure that your payout is competitive (you can view your competitor’s payouts using offer engines like tracking202.com, affiliate scout, and offervault.). Affiliate networks will compare your payout to industry norms, so do your homework here and don’t waste their time.

c. Make sure you’re well funded. Affiliate networks can drive huge volume so be prepared. If you have continuity programs, make sure you have enough cash flow to be able to pay your affiliate network bills before you get paid by the consumer.

2) Know Your Pricing Model

a. What model should you choose? CPA? CPL? Rev-Share? Hybrid? If you are an ecommerce site with multiple products to sell, perhaps a rev-share model may work better than a fixed CPA (cost per acquisition) payout. If that’s the case, make sure the CPA network you choose has rev-share tracking capability, or work with a rev-share platform like Commission Junction that specializes in that. Remember, affiliate networks (aka CPA networks), are for the most part, blind networks – the traffic source is unknown to the advertiser. Rev-share platforms allow affiliates to apply directly to you (so you know who they are), but you have to manage them and promote your offer yourself. With CPL (cost per lead) campaigns make sure you know your customer lifetime value (LTV) so that you can offer a competitive payout and not get burned.

3) Know Your Offer and Make it Competitive

a. Have multiple language landing pages with LOCAL content. What resonates with consumers from Des Moines, Iowa, may be quite different with those consumers from Paris, France.

b. Make your offer unique – incorporate video (www.livefaceonweb.com is a cheap way to go for commercials), click to call technology, testimonials, open untapped geographies, accept multiple currencies, offer a soft sell approach (hook consumers in with lead gen or free trial), explore different pricing models, offer to run contests, etc.

c. Communicate the demographics of your customers to the affiliate network. This will help affiliates better target your market and will help them achieve a higher ROI, which means more volume and quality traffic for you.

d. What is your value proposition? How is it different and why should a network promote it? What are the features and benefits?

e. Better monetize your path to be able to offer a higher payout- monetize abandons through responder emails and exit chat windows, incorporate opt-in cross sells/up sells, monetize confirmation pages with CPC feeds, etc.

f. Be compliant – read up on recent FTC online marketing regulations, Can-Spam, new credit card regulations, and other best practices literature.

4) Know Your Traffic Types

a. Traffic sources have changed over the years. It’s no longer just web, email and search. The more traffic sources you can accept, the argument goes, the more volume you can expect. Consider virtual monetization facebook applications, social media advertising, mobile and CPA TV/Radio ad networks (like RevShare) as possible traffic sources. Note that traffic quality will differ between traffic types, so I would consider testing these before accepting this traffic on a network. If you’ve found that email works best for your type of offer, share your success with the network so that traffic type can be better leveraged.

5) Know Your Technology

a. Make sure you can track affiliate network traffic. There are many off the shelf applications, including Direct Track, Hitpath, Affiliate Pro, etc. that do a decent job and don’t break the bank.

6) Make Sure Your Offer is Optimized

a. Affiliates don’t like to be guinea pigs so test your offer through media buys and make sure your landing page and digital assets (banners, emails, etc.) have been optimized for network distribution. If affiliates get burned, they won’t want to run your offer again. There are many books, whitepapers and sites on multivariate testing/analytics and best practices so reviewing these could prove helpful. Google Website Optimizer is a free application for analytics worth using as well.

b. In terms of landing page best practices, be mindful of what attributes your page should have. Remember: the site must build Trust, must service a Need, must Help them with something, and give it to them in a Hurry.

7) Know Thy Network

a. Let’s face it, there are 100’s of affiliate networks out there. This is what happens when there are low barriers to entry, high demand and commoditized technologies in an industry. Not all networks are equal however. Make sure they have excellent affiliate screening processes, fraud detection technologies, great reputations (check out wickedfire and other blogs/forums), are connected to good industry associations (like the Performance Marketing Alliance) and have an appropriate affiliate base to promote your offer. Interview your network as much as they interview you and leverage performance marketing groups in social media sites like LinkedIn to obtain more feedback from objective sources.

b. Working with multiple networks – this idea that if you work with more networks, the more money you’ll make. This is not entirely true. Given the optics that affiliates have these days through offer engines, the industry has been greatly commoditized. As such, affiliate networks are increasingly competing on price and when advertisers work with multiple networks, affiliates will leverage this and bounce from one network to a higher paying one. Ultimately the networks experience margin erosion so much that they need to call the advertiser and ask for a higher payout – therefore costing you more money. I would suggest working with 1-3 good networks max.

We’ve all heard the cliché, “Your success is our success” and that couldn’t be more true when working with affiliate networks. They can be valuable partners in your overall marketing strategy, so in the interest in making performance marketing successful for you, make sure to do your homework.

Should you have any questions or would like to chat, I’m always available at jmossanen@mediatrust.com.