Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate’s own marketing efforts. The industry has four core players: the merchant (also known as ‘retailer’ or ‘brand’), the network (that contains offers for the affiliate to choose from and also takes care of the payments), the publisher (also known as ‘the affiliate’), and the customer. The market has grown in complexity, resulting in the emergence of a secondary tier of players, including affiliate management agencies, super-affiliates and specialized third party vendors.
– source: Wikipedia
You can become an Affiliate in two ways:
- Affiliate Networks like Daisycon, ShareASale or many others.
- Exclusive Affiliate Program e.g. being an affiliate for your hosting company or Amazon.com.
Advantages of an Affiliate Network
A big advantage of an affiliate network is the lessening of the administrative burden on both sides, the merchant and the affiliate. Another huge advantage is ofcourse the great number of affiliates already available for you to run your campaign if your a merchant, and visa versa for the affiliates.
Affiliate networks mostly get a monthly fee for their services from the merchant and they get a cut of the reimbursement for the affiliate. The lower the percentage for the network the better, as this wil increase the incentive for the affiliate to place your ads on his site.
Running a campaign of a merchant on your site is mostly dependant on the amount of the commission. The nature of the commission, is it per click, per lead or per sale? The overall clickability of a campaign and ofcourse also the compatability of the campaign with your own content. But that ofcourse works two ways round.
If your a merchant and you want to run your ad campaign through an affiliate network it is always good to compare networks, and to negotiate about certain terms and fees. Because of the great competition there is always room to negotiate on these factors.
I won’t go in deeper regarding seperate Affiliate Programs, it mainly boiles down to the same criterea as Affiliate Networks, but then ofcourse without the third party (The Affiliate Network). Mostly big companies like e.g. Amazon.com have their own affiliate programs. An advantage over network affiliating is ofcourse that the advertiser has a stronger bargaining position. A great disadvantage would be the enormous administrative tasks to compensate the affiliates in a correct manner.
Deciding which calculation model to use to pay out commissions is an important step as well. There are several ways to reimburse affiliates:
- Pay per lead
- Pay per sale
- Pay per click
- A combination of the above
Is your commission in line with what your competition is doing. Nowadays there are so many affiliate programs available that the affiliate has to choose, and ofcourse this decision is based on arguments most favorable to him (or his wallet).
The height of the commission for your affiliates also is dependant on your own conversion rate of your website. If your website converts really good, that will give you the possibility to lower your fee per sale for the affiliates. 100 times 2 is more than 2 times 20 😉
And for leads and clicks you could higher the fee, if youre site converts these clicks and leads really well into sales.
Best practices in Affiliate Marketing
for merchants are:
- React quickly on questions of affiliates.
- Quick approval mechanisme for affiliate leads, clicks or sales.
- Provide easy promotional material, make it easy for affiliates to implement your ads.
- Provide great textual and visual material for affiliates to use. Good ads can also add to the popularity and “coolness” of the affiliate site.
- Hold some exclusivity on your campaigns by not permitting every affiliate to your program.
- Implement some sort of Bonus structure for the best affiliates in your program.
for affiliates are:
- Be sure the campaign fits your website.
- Read the guidelines of the Affiliateprogram and follow them.
- Be quick in putting up temporary campaigns, such as seasonal campaigns. And don’t forget to remove them in time. No summersales in Midwinter;)
- Be proactive in approaching the merchant or the network with your questions.
- Be picky about the campaigns you put on your sites. You can’t run them all, so you better get the most out of the ones you choose.
- If a campaign doesn’t work out for you, don’t hesitate to replace it with a better one.
Things you can better not do.
Don’t think you’ll grow rich overnight.
Don’t overdo it with ads on your site. To many ads are also a negative ranking factor e.g. in Google.
Don’t mix what can’t be mixed. No Fast food campaigns on a site for vegetarians.
In my blog about affiliate marketing I show all kind of things and articles, videos etc which I find interesting. Do with it what you want.