Affiliate Marketing is a grouping of Web-based marketing techniques comprised of a central business which rewards “affiliates” on a per-visit, or per-customer, basis. Customers and/or visits accrued through the affiliate’s private efforts are compensated by the Business. The industry is four-legged, centered on: Retailers (brands, merchants), Networks(systems for containing affiliate offers and payment regulation), Publishers(Affiliates), and Customers. Understanding the pros and cons of Affiliate Marketing is essential to using it for your business or brand.
With the recent expansion of the affiliate marketing field, meta-marketers like affiliate management groups and agencies, third party vendors and meta-affiliates have become prominent industry-wide, comprising a second level of market players. Because of the advertising methods made use of by affiliates, Affiliate Marketing tends to experience a degree of overlap with other internet marketing techniques like Pay Per Click marketing, SEO, e-mail marketing and general advertising by display. Atypical affiliate methods like mass-reviewing a service, product, or partner agency also take place.
Although Affiliate Marketing is sometimes confused or conflated with Referral Marketing (both are third-party driven retail redirection services with a goal client), Affiliate Marketing depends entirely on financial motivators to compel sales higher, whereas Referral Marketing involves personal relationships and trust-based social contracts to do the same. While recent years have seen an increase in emphasis of SEO, e-mail, and website syndication by internet advertisers in the United States market and abroad, Affiliate Marketing maintains a strong, if low-profile, presence in the Web marketing world. It is an important part of online advertising and comprises a significant percentage of content on the Web.
So, how should an important tool like Affiliate Marketing be approached?
1. Implement Affiliate Marketing Efficiently
No matter what your business or brand’s focus is, efficiency is a key part of any market strategy. Some merchants make use of in-house affiliate programs with software available to the public, though others prefer to hire third-party service providers as intermediaries to keep tabs on traffic, sales, and successful referrals from the merchant’s affiliates. While an intermediary service provides the parent merchant with increased autonomy and fewer micromanagement responsibilities, the increase in expense can often be prohibitive, especially for smaller businesses. An in-house affiliate-tracking program should be the option of choice for merchants for whom scale is an issue, and even if your business can afford the services of a third-party service provider, consider efficiency carefully!
Remember that no matter how far-reaching your link network, and no matter how cutting-edge the software and market techniques you’re using, a streamlined business model is still an essential component to success in the competitive Web marketing world.
2. Consider Your Options
As a relatively new discipline in marketing science, Affiliate Marketing is a broad field with few industry-general categorization standards. Many varieties of Affiliate Marketing websites exist, each using distinct techniques but all understood to occupy a certain market niche. When considering which branches of Affiliate Marketing to make use of, a general knowledge of the types and techniques available is important.
Pay Per Click services like the ones offered by search engines Yahoo! and Google provide purchase opportunities throughout the web’s countless surfing venues. By offering partner sites a percentage of revenues, a PPC service creates an enormous network of pay-for-performance mini markets which represent click-through points to the merchant’s main hub. Classic variations like the ad banner and revenue sharing are other iterations of PPC. Click fraud, farmed out to “clickers,” humans or drone programs who click PPC links repeatedly, is an inherent danger of PPC services and a reason to consider it only with caution.
Meta Affiliates or Top-Tier Affiliates which maintain their own networks of affiliate marketers can be an attractive prospect for merchants looking to reach a large and pre-established group. The cost of these services, however, is often prohibitive and they’re only available on a practical level to businesses with significant capital.
Coupon and rebate service websites, charitable donation sites, loyalty-based sites offering reward systems for purchases, comparison shopping directories, opt-in e-mail directories, websites featuring heavy use of adbars and other advertising techniques, and file-hosting sites represent just a few of the many venues in which Affiliate Marketing is prevalent and lucrative.
3. Recruiting Good Publishers
A large pool of publishers is one of the attendant factors to an affiliate network with an established advertising base. Recruiting quality publishers, as well as cherry-picking top publisher applicants, is a key part of maximizing a brand’s online potential. Affiliate partners that attract a brand’s target element without conflicting with the advertiser’s existing Web venues are ideal sectors for expansion. Keeping abreast of the Web hotspots related to your brand’s field or subject can help to increase inbound traffic and increase revenues.
High-traffic websites are typically uninterested in CPA or revenue sharing deals, as such arrangements represent a high degree of risk for them. Low to medium-risk CPC and Cost Per Mille agreements are much more likely to find traction in these potential affiliate publishers. Remember to be discerning when selecting your business or brand’s publishers, as good integration and effective market spread will keep you from competing with yourself.
4. Choosing The Right Ad Network
Online advertising networks, or ad networks, are agencies specializing in the connection of advertisers with sites wishing to host advertisements. An ad network’s main concerns are acquiring potential ad space from Web publishers and finding the advertisers whose demand is best suited to filling that space. Making sure your brand and your ad network are well-matched is an important step in ensuring your brand’s online vitality, and it shouldn’t be done halfway.
Assess the advertising pools of ad networks you’re considering doing business with. If their available space doesn’t suit your needs or mesh well with your brand’s general “feel,” then keep looking elsewhere. You can afford to hold out for a perfect match, and an imperfect one will just tie up resources in a probable dead-end. Online advertising networks are most commonly grouped into three distinct types. Vertical Networks represent a portfolio of publications, offer full transparency to the advertiser concerning ad-run locations, and usually handle high-quality traffic. Vertical Networks are often used by brand marketers, and may include site-wide ads as a general service.
Blind Networks offer competitive pricing to, primarily, direct marketers in exchange for taking over the control of where those marketers’ ads will be featured. Some networks allow marketers to exclude specific sites from the list of potential venues. Ad targeting technology, conversion optimization, and bulk buying allow Blind Networks to keep pricing low and achieve high penetration, though not necessarily of uniform quality.
The third network type, Targeted Networks or 2.0 Ad networks, rely on specific contextual targeting technologies built into their Ad servers. By analyzing consumer clickstream statistics Target Networks enhance the value of the inventory they purchase by assuring that it is accurately assessed for maximum synergy with ad placement. Connection with social networking sites is an increasingly important part of what Targeted Networks achieve through social graph technology and enhancement routines.
From a common-sense point of view it is advisable to confine your efforts to one or two approaches, preferably keeping to one coherent strategy. Don’t spread a brand’s identity too thinly or you’ll risk confusion in your consumer body.
5. The Perils of Search Engine Spam
Spamdexing, the practice observed by unscrupulous businesses to create computer-generated webpages consisting solely of merchant-provided data feeds, has been a significant part of affiliate marketing since its inception. Spamdexing, with its ability to easily target many market sectors through keyword hyperdensity, may seem like a novel way to promote an affiliate network, but not only has Google (through expert application of web-crawling assessment programs) largely succeeded in preventing any Spamdex-style webpages from sticking around for more than a handful of days, Spamdexing also draws a lot of negative attention from consumers for its intrusive, clutter-heavy approach.
With an increasingly strong grudge held by the internet community against low-quality websites infested with thinly-veiled affiliate links, maintaining standards is a more pertinent concern than ever. Link association and the production of high-quality content have therefore become priority goals for affiliate marketing webmasters throughout the market. The stronger the relation between article and affiliate link, the more likely the article will be seen as legitimate by both consumers and web-policing crawler programs. Tactics like Banner Farming and Spamdexing bring more trouble than they’re worth, and you’re better off sticking to a quality-before-quantity strategy. The goodwill of the online public is worth it.
6. Maintain Scrutiny
Keeping abreast of current trends, referring to guides and how-to’s, and watching closely the numbers yielded by your affiliate marketing endeavors can help to refine your strategy. Remember to adjust your approach based on results. While it might seem like basic sense, common logical fallacies can keep brands from staying successful by associating them with outdated campaigns and strategies. Stay current, and keep an ear to the ground.