Lammo.net: Affiliate Marketing Blog

Affiliate marketing is fundamentally a method of promoting products and / or services through an independent agent, or, in everyday terms, the process of driving traffic from one website to another for the benefit of both. Affiliate marketing is a powerful and controllable method of on-line marketing and yet in some quarters has been considered the poor relation of other online marketing activities. However, with the increased availability of broadband Internet, improved consumer confidence and the eCommerce industry in the United Kingdom predicted to exceed £50 billion by 2011, according to some estimates, more and more on-line retailers and marketeers are turning their attention towards affiliate marketing networks.

How Affiliate Marketing Networks Work
Affiliate marketing networks assist in the creation of mutually beneficial relationships between providers of products and services (”merchants”) and internet marketeers, owners of existing websites and specialist affiliate publishers (”affiliates”) willing to drive traffic to the merchants in return for commission payments. The affiliate networks are thus intermediaries, benefitting all parties by reducing the number of individual relationships they need to manage and providing economy of scale to all.

Understanding the Network / Merchant Relationship
For an individual merchant to manage literally thousands of direct affiliate relationships is almost impossible. A network thus offers several significant advantages to a merchant:-

1. The recruitment and management of a large number of relevant affiliates
2. ‘Push’ promotion of the merchant’s products, services and special offers
3. Tracking of all traffic, leads and sales and reporting / analysis
4. Affiliate payments and reporting
5. Campaign advice, creation, management and control

Almost all of the major UK networks charge merchants a monthly fee, in addition to a percentage of sales revenue driven through the network in question. Most merchants are only too happy to pay this: it would be far more costly (impossible in most cases) to manage the affiliate channel directly.

From an Affiliate Perspective
Once again, the key benefits are primarily those of aggregation and volume — the ability to identify and participate in multiple affiliate programs and to manage all tracking, sales and commission payments from within a single environment. That said, most experienced affiliate publishers will have accounts with all of the major UK networks including Tradedoubler, Affiliate Window, Paid on Results, Webgains, Affiliate Future and Commission Junction so in fact affiliates are managing several environments! Because the major affiliate networks handle and track high volumes of traffic, they can provide affiliates with considerable detail as to conversion rates and average earnings for a given program. This is of particular value when assessing a potential merchant. All tracking and reporting is also provided in ever more sophisticated interfaces. In fact the network interfaces are now so sophisticated that many affiliates struggle to find their way around them! The various text links, banner and graphical links available for a particular program can be accessed and the code generated and downloaded with the affiliate’s own tracking ID included in the links to ensure accuracy of tracking.

Merchant Exclusivity
In some cases, a merchant will sign an exclusive deal with one of the networks and its program can only be accessed through that route. In others, the same merchant is available in more than one of the networks although commission levels have been known to differ so it is always worth cross-checking occasionally. Sometimes the differential is transient and may simply be the network waiving some or all of its own commission element as part of a ’sweetener’ deal to win the merchant and / or to boost affiliate numbers.

A Two Way Relationship
Whilst affiliates don’t pay the networks a monthly retainer, they are nevertheless regarded as a vital part of the business and treated accordingly. You may find this surprising after reading the many complaints on forums as to the quality of network support. Whilst there has historically been something of a tendency to put 12 year old account managers straight into the fray, there is a growing recognition amongst the better networks as to the need to recruit, properly support and groom strong affiliates. Ultimately, with ever increasing pressure on affiliates in both natural and paid search, which we will cover in other articles on lammo.net, really good affiliates are hard to come by.

An affiliate-network relationship is like any other business relationship. It needs to be properly serviced and grown. The affiliate needs to demonstrate solid performance and to play the game (sticking to brand bidding rules being a good example here). The network needs to maintain and grow a strong merchant base, pay its affiliates on time and to communicate regularly, clearly and effectively with both parties. On the subject of communication, most of the networks will communicate regularly via email with affiliates, advising as to the current offers and vouchers available from the programs in which the affiliate is participating. Whilst this information isn’t flawless and is often a little late, the networks are making strenuous efforts to improve this, most notably Webgains and Affiliate Window. Most networks will also alert the affiliate as to any merchant site or tracking failures (which occur surprisingly often) allowing the affiliate, if desired, to temporarily suspend or substitute affiliate links to minimise loss of earnings.

Making it Work
According to some estimates, at least 500, and possibly as many as 2,500, unique visitors a day are necessary for a website to generate sufficient revenue from advertising alone, to remain even vaguely profitable. These figures mean very little, however, if the visitors to a publisher site do not click through to a merchant site and actually buy a product or service. Affiliate publishers thus need to build trust and credibility with their visitors so that they return to the site again and again.

As in all other online marketing activities, traffic talks. Attracting visitors at a sensible economic rate is the greatest challenge in affiliate marketing and one we will explore elsewhere here at lammo.net.

Further Affiliate Marketing Network Information

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affiliatehomebasedbusiness.com

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