5 Questions to Ask Before Implementing an Affiliate Marketing Strategy
In this age of media buying, some big questions persist about the effectiveness of programmatic and pay-per-click (PPC) advertising.
Ad view counts can be deceptive, as bots make up a large percentage of so-called viewers. In fact, a report from the security firm Imperva shows that 52 percent of web traffic comes from bots. The Bot Baseline Report's findings are similarly grim, forecasting losses of $6.5 billion for businesses worldwide caused by bot fraud in 2017.
Bots seem to be much more receptive to display ads than humans. Intrusive PPC ads are seen as a nuisance, as evidenced by the rise of ad blocker software. In 2016, the use of ad blockers across all devices rose by 30 percent, according to a report from PageFair.
Even when inauthentic PPC and programmatic ads aren’t blocked by software, they rarely generate quality leads. Consumers are bombarded with irrelevant ads that fail to make a connection with them — and that's why affiliate marketing is much more attractive for both businesses and customers.
Beyond Bots and PPC: The Affiliate Approach
Real people almost always ignore generic PPC ads but pay attention to specific publishers or influencers who demonstrate expertise in their niche and thus convey their authenticity. For key demographics, authenticity is paramount: According to research, 43 percent of Millennials must trust the company or site that produced content before they will consume it. Moreover, 61 percent of women won’t click on an influencer’s ad unless it feels genuine.
As companies look for higher-quality leads and more ways to drive results beyond programmatic display and other digital media channels, driving lead generation efforts through affiliate marketing is on the rise. Because people are less likely to ignore niche publishers or influencers who draw upon a specific expertise to genuinely connect with them, many businesses are investing in affiliate marketing for their lead generation programs.
Publishers only get paid when their promotional efforts succeed, and commission payouts are structured around the business's lead generation goals. Compared to paying upfront fees for programmatic or PPC ads, which often have an uncertain effect on lead generation, these performance partnerships are more attractive to companies.
The Keys to Implementing an Effective Affiliate Program
Both B2C and B2B companies have found that affiliate marketing is one of the most cost-effective, scalable models for enhancing their customer acquisition strategies, generating high-value leads, and driving traffic to their sites. Before you implement an affiliate program at your own company, first carefully consider the answers to the following questions:
- What do you want to achieve with affiliate marketing?
Before launching your campaign, it’s essential to define your goals and metrics of success. Generating a certain number of leads requires a specific approach tailored to that goal; determining the end goal of a specific lead takes another tack.
Take a deeper dive into your leads to determine what you expect of them. Is it their information? Do you want them to purchase a product or service, or make a referral? By structuring your commission payout around your goals, your affiliate partners will be aligned with them and working to execute on your brand’s strategy.
- Who are you selling to?
By understanding the type of lead you are looking for, you can better identify the types of partners you want to work with. Is your audience college students searching for ways to save money? Or do you want to grow a base of leads that have a large disposable income?
Knowing the answers to these types of questions not only helps you segment the types of publishers you partner with, but it also helps you structure your program's creative. Understanding your audience segment is key to letting your partners know what messages you want to resonate with their followers.
Your customers will determine the affiliates you choose to work with. If your target demographic is young college students, find an affiliate partner who appeals to that group; alternatively, if you're a B2B company trying to appeal to executives and board members, you'll need an affiliate who can sway them. Different types of content naturally attract different groups of people. Make sure your affiliate knows which group you're going after.
- Who do you want to work with?
Focus on quality partnerships rather than quantity.Quality partnership building is the key to a successful affiliate lead generation program. Although it may be tempting to fill your program with as many partners as possible, it’s better to focus on partners who are brand-aligned and have an audience that will deliver the types of leads you want.
This helps you avoid publishers that aren’t aligned with your brand and don’t deliver the types of leads you want. Having high-value partners who drive steady traffic is preferable to dealing with fraudulent, low-quality lead issues.
As with any other business partnership, your relationship with your affiliate should be based on shared values. There are plenty of content creators and niche experts, but not all of them will resonate with your company and your customers. Instead of gathering a high number of affiliates from your field, focus on selecting only those who will best connect with your customers. Solid affiliates will earn more commissions for themselves while attracting the right kind of leads for you.
- How will you compensate your affiliates?
Ideally, your affiliates would immediately know whether their leads were valid or not; unfortunately, depending on the end goal for your lead, that process may take minutes or months to complete. Either way, maintaining transparent communication with your partners about how often and when lead quality will be evaluated is important to growing a strong relationship with them. Be sure to set clear expectations with your partners by defining what a quality lead looks like so that they can send the highest quality lead volume your way.
Once you have determined clear metrics for success, decide how you will reward your affiliates for meeting them. You could reward affiliates every time one of their leads fills out an online form or only when one of their leads makes a purchase. Make these end goals clear to your affiliates so that they'll direct their energy toward meeting them.
In terms of compensation, you could offer a percentage of sales or a set dollar amount for a number of leads. Alternatively, providing influencers with promotional giveaways is a great opportunity for them to create content and engage with followers while receiving a free product as compensation.
- Where are you heading?
After creating quality relationships with your affiliate partners, it's essential to keep them engaged once you start seeing success from their efforts. Get creative — create campaigns to incentivize your affiliates to promote your program and encourage their followers to convert.
These tested tactics have produced successful results:
- Offer a tiered commission structure: Say you give affiliates $10 for the first 100 valid leads they bring to you; you might further reward them with $20 for all valid leads beyond the first 100 leads. This tiered commission structure is a great way to incentivize your highest-performing partners to bring in even more quality leads.
- Offer a giveaway to a relevant microinfluencer: Microinfluencers have highly engaged audiences, which makes them great affiliate partners. By offering a promotional giveaway to microinfluencers, you allow them to create exciting content on their site and give their followers the chance to win a prize from your company. It's a win-win-win!
Starting an affiliate partnership will sometimes bring immediate results, but businesses and affiliates both usually benefit the most from sustained, nurtured relationships. Maintain trust with clear, open communication about commission, company goals, and target demographics.
As the marketing landscape continues to change with new technology, affiliate partnerships remain the strongest avenue for creating connections with consumers. Inauthentic and intrusive PPC and programmatic ads are clearly falling by the wayside. The companies that develop strong affiliate partnerships will pick up those customers who have their ad blockers on.
Laurie Cutts is the vice president of marketing at Acceleration Partners, a performance marketing agency focused on online customer acquisition for the world’s largest brands.