All too often marketers witness clients pass up great opportunities, programs, and strategies due to preconceived notions and myths surrounding particular initiatives. Affiliate marketing is a prime example of a program that is often approached with high caution, and rightfully so. The topic of affiliate marketing is a widely contested one, with industry veterans, newcomers, and everyone in between often debating effectiveness and efficiency.
Regardless of seniority, position, and industry – it’s important to understand the myths (and truths) behind building an affiliate marketing program, as a strong strategy does have the potential to increase business and sales.
Affiliate Marketing, in layman’s terms, is the offering of commission to a partner called an “affiliate” when they generate a conversion, such as a lead or sale. Alternatively, if you wanted to be an affiliate company, you’re paid to bring online traffic and/or customers to businesses.
Although this sounds like a win-win, it’s certainly more complex than meets the eye, and an unmanaged program can quickly end up costing businesses a lot of money, which brings me to myth #1…
Affiliate Websites Don’t Require Much Management
An affiliate marketing program is a lot of work, and much like any marketing campaign, the perfect recipe involves a mixture of trial and error, and research. Many business owners make the mistake of blindly picking an affiliate to partner with then simply letting the campaign run its course. While this might work for some, most businesses will end up losing money in the long run.
Depending on your budget, you may want to consider hiring a project manager to oversee these efforts. A project manager will help you create affiliate guidelines, build commission structures, monitor performance, and recruit new affiliate partners by seeking out the most efficient partnerships for your business. Most importantly, they’ll help you avoid costly affiliate marketing mistakes. This brings me to myth #2…
Affiliate Marketing is The Least Time Consuming Way to Get New Business
As mentioned above, it’s not uncommon to see business owners commit to an affiliate program blindly and with little resources assigned to the effort. Mistakes can cost you business, and poor management of an affiliate program will cost you not only potential sales, but time, effort and energy. Here are some common mistakes from an affiliate point of view, all mistakes a project manager knows to avoid…
- Not having creative available in all standard ad sizes
- Using dated creative
- Not meeting creative deadlines associated with seasonal promotions or timely campaigns
- Poorly designed landing pages
- A lack of URL tracking options
This is just a sample of the management tasks involved with running an affective affiliate campaign. However, expanding on my last point regarding tracking options brings me to myth #3…
Affiliate Marketing Success = Being on as Many Sites as Possible
The most important rule to apply towards an affiliate marketing campaign is ‘quality over quantity’. There are quite literally thousands of websites on the internet that are willing and (debatably) able to promote your product. However, are these partners helping you reach your business sales objectives? By setting up accurate tracking on all of your campaigns you’re able to monitor and make better judgement on what is and isn’t working.
The key to success is finding a tight group of affiliate partners that will deliver results that meet your goals. And with that we arrive at myth #4...
“My Sales Are Up, So It Must Be Working!”
Goals come in many shapes and forms, for Blue Fountain Media, we pride ourselves on delivering stunning results – whether that is visually, analytically, or financially. One of the first steps a marketer should take when advising on affiliate programs is deciding on an appropriate goal.
Most commonly the goal is an attainable cost per acquisition (CPA), aka – the average you’re willing to spend to obtain sale. For both B2B and B2C industries’, setting a CPA ensures you’re spending within your margins and generating cost-effective business leads.
Alternatively, businesses may look towards affiliate marketing with goals other than a full sale. Whether it’s a sign of interest, a lead, or a closed sale, it’s important to understand your businesses goals before committing to an affiliate payment model. And on that note, I present myth #5…
CPA Is the Best and Only Affiliate Payment Method
When deciding which payment method to use, there needs to be careful consideration placed towards all methods before committing to one. Affiliate sites commonly work on a CPA, cost per click (CPC), or fixed cost model.
- CPA is the most popular payment model, particularly since that is what the publisher base is most used to and is acknowledged as being amongst the least risky. If your goal is acquisition, this may be your safest best.
- CPC is a popular alternative to CPA, with commission paid per lead rather than per sale. CPC is popular with businesses that sell or provide items or services of larger monetary amounts. For example, a consumer is unlikely to purchase a car online, and as such setting a goal of acquisition is close to impossible.
- Fixed Cost is another alternative payment structure. The pricing of a fixed cost package should factor in exposure, duration, and relevancy to affiliate partner.
The most important thing to take into consideration when choosing a payment model is what is it your campaign is trying to achieve.
Affiliate marketing isn’t easy, but by fostering relationships, finding your best suited affiliate partners, and applying realistic, well-defined goals, an affiliate marketing campaign can drive profit and help your business reach its objectives.