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Affiliate Marketing: 10 Dos & Don'ts

Robert Moskowitz
Affiliate Marketing: 10 Dos & Don'ts Robert Moskowitz
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Affiliate marketing doesn't just happen. Here are the ten steps to take when implementing a program:


1. Think through the program


Affiliate Marketing (AM) can be a powerful addition to your company’s marketing arsenal. But you greatly reduce your odds of success if you shoot from the hip or fail to anticipate any of the key challenges. So do your thinking in detail before you launch the program.


2. Recruit the best affiliates


The success of your AM program depends on the results of your affiliates, who will generally fall into the common 80/20 pattern: 20 percent of your affiliates will generate 80 percent of your business. The more you do to find the best fitting, hardest working affiliates, the more you tilt the playing field in your favor.


3. Take care of your affiliates


Your affiliates are the engines that produce these sales, so it’s prudent to keep your affiliates happy, motivated and knowledgeable. Every investment in your affiliates will come back many times over in additional sales. While you can’t do their job for them, you can give them the tools and information they want and need to be successful. 


4. Pay a top-rated commission


If you’re stingy with commissions, you’ll attract lower-quality affiliates who will produce fewer sales. To get the best, pay what they’re worth to you.


5. Establish a second tier


Top affiliates are attracted by the potential for secondary income, over and above what they personally generate in sales. So structure your commissions to provide overrides on new affiliates that existing affiliates bring into the program.


6. Support your affiliates


The most successful AM programs utilize newsletters, informative Web sites and other kinds of community-building, sales-building communications that help the affiliates do their jobs. It’s also important that you respond quickly to feedback so your affiliates feel they can get their problems solved and their questions answered.


7. Monitor affiliate performance


Your AM program will produce a better bottom line if you’re tracking the results, and perhaps also the efforts, of each affiliate. This way, you’ll be able to see who is producing and who isn’t, and where you can make a change to increase the results of your affiliates.


8. Tweak your product line


AM works best when prospects can choose from a variety of products and services, allowing more people to find something they’re happy to buy from you. Look for opportunities to adjust, expand and proliferate your offerings to increase their appeal.


9. Make new customers part of the family


The most difficult task is getting someone to make the first contact with your company. So it’s generally fruitful to repeatedly contact prospects and customers drawn in through your affiliates. Over time, they will buy from you again and again.


10. Use viral marketing elements


AM feeds off the power of the Internet, which makes it a great environment for viral marketing elements: the emotional and psychological cues that encourage people to drive others to your site. A sales-generating system all its own, viral marketing can provide a natural synergy with your AM program.


Here are some things you shouldn't do:


1. Expect to get something for nothing


AM is a legitimate approach to prospecting for and closing sales that follows the same rules of business as every other sales channel. You must do it right, invest wisely and follow through responsibly if you want it to produce for you. There is no free lunch in this, or any other, method of doing business.


2. Offload too much responsibility to your network vendor


You’ll probably want to hire an outside vendor to handle most of the grunt-work involved in managing your network of affiliates. But these are primarily technical vendors, and cannot substitute for commitment and involvement from your company’s key managers.


3. Make the program a stepchild


You get out of AM what you put into it, so you’re making a mistake if you let it find its own way, piggy-backing on other sales efforts and making do without sufficient resources. Give your AM program a fair shot by allocating enough time and energy, and by providing every Web site and tool it may need.


4. Let problems fester


AM is a trial and error exercise, particularly in the first year. If you let things proceed too far in the wrong direction, you’ll have a hard time dragging the program onto the right track later on. Catch problems early and address them aggressively.


5. Commit only for the short term


AM is also a momentum business. If you expect quick results from a short-term commitment, you’re going to be disappointed. Give your program a year or longer to find its legs and begin delivering on its promise and potential.


6. Appear on Link Farm sites


There’s a significant quality aspect to successful AM, where more is not always better. Sites that offer nothing but dozens and dozens of links to merchants like you are unlikely to appeal to your best prospects or drive much business your way. Stay away from affiliates who do nothing but add your name to a long list of offerings.


7. Discourage your affiliates from being individuals


Involvement and commitment from the top should not translate into micromanagement or severe restrictions on your affiliates. Each successful affiliate will have his or her own way of attracting prospects. Don’t stifle their individuality, or you’ll limit your AM program’s results.


8. Let the program run on auto-pilot


AM programs require attention and guidance. They can’t thrive in an atmosphere of indifference. If you aren’t willing to provide an in-house manager, you’re severely handicapping your program from the outset.


9. Let costs get out of hand


There are lots of ways to throw money down the drain in AM. Be careful to avoid all of them! If you discard your normal business acumen when approving AM expenditures, you’re making it almost impossible for the program to generate a satisfactory return on investment.


10. Let the program stagnate


There’s a normal attrition rate among affiliates. If you don’t take steps to grow your AM program (at least enough to offset the steady loss of affiliates for reasons beyond your control), your program will wither and eventually die.


Related Features:


Affiliate Marketing 101
What is it, and what are the benefits and challenges for marketers?


Making Affiliate Marketing Work
Perceived as a “free” way to build more sales, affiliate marketing actually requires a great deal of time, effort and resources.


Counting More than Cash
The success of an affiliate marketing program doesn't rest solely on profit.


Robert Moskowitz is a consultant and author who speaks and writes frequently in the U.S. and abroad on such topics as white collar productivity, knowledge management, practical use of the Internet, telecommuting, caring for aging parents, and business applications of information technologies. He has authored several books, including "How To Organize Your Work and Your Life," and "Parenting Your Aging Parents," and teaches several "online courses."

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Hutchinson: In a noisy attention economy, the metrics of reach, frequency, impressions and click through seem to be crumbling beneath a growing need for more relevant metrics, like say, (drum roll please) "engagement."


Of course, the trouble with engagement is that it's tough to measure. But at a recent ad:tech conference, you presented to a full house what seemed like a perfectly sound and universal way to measure engagement. Has EMM Group split the atom here?


Hastings: I like the analogy (especially since it was a scientist from my Alma Mater, Cambridge University, who identified the nucleic model of the atom).


The analogy we used at ad:tech was another scientific one: the transition from one S-Curve to another. In technology, the S-curve portrays the life of a technology that starts with a disruptive innovation, advances through competitive exploration of possibilities to achieve the breakthrough to industry standards, and then reaps its economic rewards in maturity.


As it does so, the next S-curve starts to form as a new disruptive cycle begins, and will eventually replace the old one.


 


Marketing is at the end of its old S-curve, where no matter how much effort we put into it, we will not improve returns.


One of the phenomena of the old S Curve is the model of marketing communications as a funnel. We put communications in at the top, and it gurgles through the funnel to turn -- by increasingly smaller percentages -- communications into awareness, and then awareness into consideration, trial, repeat purchase and loyalty.


It's frighteningly inefficient, and the inefficiency is designed in!


The new S-curve is based on the new concept of customer engagement. Engagement is a dialog conducted via a multiplicity of contact points, selected by the customer. Engagement is built around two key changes in the operating environment:


1) First, the addressable consumer or customer. Increasingly, we are able to reach our customer individually as an electronic address as that consumer moves between a desktop computer attached to the internet, a laptop on the go, a web-enabled mobile hand held communications device or an iPod. They might be using email, instant messenger, blogging, knowledge management tools, collaborative business software or shopping. We can reach them at most times and follow them around the web to analyze behavior that reveals their needs.


2) Second, customer control over the content they choose to receive. Advertising -- or indeed anything that we might typically have thought of as "marketing communications" that simply interrupts them before they have put their hands up to say "please tell me something" -- is anathema.


Engagement is customer controlled. To engage with a customer, we must understand their needs and preferences pretty much as individuals, or at least in very, very finely segmented groups, and communicate with them when they choose, rather than when the brand owner chooses. Engagement requires personal, individual meaning, and therefore it requires personal, individual understanding.


In order to become a standard for marketing, the first requirement of customer engagement as a marketing tool is that we have measures of engagement. At ad:tech, we introduced the concepts of :



  • Customer Engagement Points

  • Share of Customer Engagement

  • Engagement Conversion Rate

These are the cornerstones of the new engagement measurement system. They generate derivative measures like cost per engagement point and cost per share point of engagement.


It's a complete new paradigm, and it unleashes the new marketing S-Curve. Its key points are:



  • It embraces all contacts with the consumer from the web to word of mouth to conventional communications. The customer tells us what qualifies as a contact.

  • Every contact has a value, weighted by combining cognitive value (information generating a rational shift in favor of the brand), affective value (generating a positive feeling about the brand) and persuasive value (generating a shift in behavior towards the brand).

  • All the values roll up to a total brand engagement score. This is a global currency. A brand engagement point in Berlin can be compared to a brand engagement point in Beijing, or Buffalo or Buenos Aries.

Next: What does this do to the brand-agency relationship?

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Hutchinson: So what does this new environment, or discipline of process, metrics and "hyper-trackability" in modern marketing do to the brand-agency relationship? 


Hastings: The old form of agency relationship is at the top of the old S-curve. It's run out of steam.


The new relationship has to be built around integrated marketing: how to get the most Brand Engagement Points (BEP) from the array of communications, website contacts, CRM, trade shows, word-of-mouth, product placement and product-in-use experience, all at the most efficient cost per BEP.


That requires a complex integration algorithm, and it requires a single role of integrator.


It remains to be seen if any agency can operate the new algorithm. They can run the model and do the math, but can they play the integrator role? That requires the objective allocation of dollars between all the methods of contacting the customer for engagement. It requires that the choice of contact precede the choice of creative theme, a difficult shift of priorities for agencies.


It was thought that the creation of the new conglomerates like WPP and Omnicom would offer integration to the client but it has not happened yet. We see the integrator role being played inside the client organization. That makes the agency just one of a choice of vendors, and a choice that is governed by scientific resource allocation methods.


On what will the new relationship be built? We believe it will be in efficiency (cost of service optimization) rather than creativity. We don't see a lot of agencies stepping up to the plate.


Hutchinson: Perhaps these pressures between the new and old S Curves are also contributing to the grim statistics we keep seeing from Spencer Stuart, wherein the average tenure of today's CMO keeps dropping: from 23.6 months in 2004 to 23.2 months in 2006?


Hastings: The CMO is not a real "C" in many organizations. The idea of having a head of marketing on a par with the CFO, CTO and so on is a vaguely nice concept, but the responsibilities are not well defined.


And the reason for that is that most CEOs don't understand marketing and its role in the corporation. They appoint CMOs and expect some kind of a miracle to happen, such as great PR or a brand turnaround, and get impatient very quickly when it doesn't happen. They fail to think hard enough about the organization design, process, technologies and other needs of the CMO to have a true impact.


There's a ton of resistance to CMOs from business unit heads who want command of their P&L and budgets. Unless organization design and process design ferrets this out, the BU heads will win.


Hutchinson: Your book, "The New Marketing Mission," was the first book I had ever read by a group of marketing executives to deliberately include the practices of project and program management as a means to organizationally align or "re-shape" the company around customer insights and brand. 


Typically, marketing and project management have been diametrically opposed cultures and communities. Is enterprise marketing management changing this?


Hastings: Enterprise marketing management combines process, metrics, organization and technology. It employs one sub-process to generate insights and another, linked sub-process to go from insights to innovation, and a third sub-process to get the innovation to market. It develops repeatable capabilities and models such as product launch models that can be used again and again as templates. It absolutely uses project and program management principles, tools, methods, measurements and technologies.


When you see the new organizational construct of Marketing Operations popping up in technology companies, those are built on project and program management principles.


Marketing Operations will be a new dominant paradigm in marketing: highly disciplined, highly scientific, highly measured, highly enabled with technology. The old idea of marketing as an ad hoc, "pull it out of thin air" creative artistry is dead. Creativity has its role, but it plays the same role as it does in architecture: it's a contribution to a scientific and technically robust engineering process that produces a building that is beautiful but also functional, reliable, and built on a solidly engineered foundation.


Additional resources:


Listen to a podcast of Hunter Hastings' ad:tech session.


Download the PowerPoint presentation.


David Hutchinson is Senior Vice President of Program Partners. Read full bio.

Vine provides double the impact of a banner ad


What if Vine shows us that the consumer attention span is even shorter than we think? We know from analytics that a consumer only looks at a banner ad for three seconds on average. Could the same be true for a video ad?


Leah Spalding, western region VP at Dynamic Logic, tells us why the six-second ad will serve as a learning tool for marketers to gauge just how long they have to tell their story.


Vine adds sound and motion to the marketer's Twitter toolbox


Marketers learned how to advertise on Twitter using only 140 characters or less, and the consumer loved it. While challenging, the industry eventually got very good at tightening up messaging. This has made Twitter one of the most popular social networks for the digital marketing industry.


Josh Dreller, director of marketing research at Kenshoo, tells us why Vine is even more appealing to marketers than simple tweets. He says images are much more impactful than text for the digital audience.


The six-second spot supports a brand's overall story


What if six-second ads could serve as a complimentary vehicle for longer, more in-depth video advertisements? Vine is showing us that short video content is popular with consumers. Instead of crafting an entire digital video strategy around a series of six-second ads, marketers could learn to use the six-second ad as a way to enhance and compliment longer pre-roll.


Tamera Bousquet, managing director at Piston, tells us why campaigns can be crafted using six-, 15-, and 30-second video ads to enhance the overall story they're trying to tell. Having many ad lengths (and using them wisely) could profoundly strengthen your messaging.


Vine will help marketers tighten up their messaging approach


Does having 30 to 60 seconds of video to work with spoil marketers? The consumer attention span keeps shrinking every year, but the ads are remaining the same length. The popularity of Vine is setting the stage for a world where 30 seconds feels like an eternity.


Tamera Bousquet continues our conversation, explaining why six seconds might not replace 30 in the near future, but the industry will use it to learn how to sharpen a campaign's message and achieve higher consumer engagement.

Marketers will learn to be more engaging


How long will a consumer watch your ad? As long as it's engaging. Traditionally, 30- to 60-second ads take their time capturing the audience's attention, but six seconds leaves no time for fluff. If you're forced to tell a story in six seconds, you'll learn to capture the audience right away. Marketers will take the lessons they learn from creating six-second ads and apply them when creating longer video advertisements.


Alastair Green, Team One's executive creative director, expresses his belief that while marketers love telling longer stories, engagement is the ultimate key to an effective six-, 30-, or 60-second video campaign.


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