January 2010 – Channel Crossing: Affiliate Marketing

Designing a Successful Affiliate Marketing Program

Forrester Research recently forecast U.S. affiliate marketing spending will reach $4 billion in 2014. Is your company taking advantage of this opportunity?

Although many direct response marketers, including Fortune 500 companies, have embraced online affiliate marketing, there are still some DR marketers hesitant to step outside their areas of expertise.

SIMPLE TIPS
Do not let fear of the unknown hold you back; following a few basic rules of traditional marketing can significantly minimize risk and enhance ROI.

Choose your partners wisely. There are branding implications to consider when working with an online agency or affiliate network. Potential partners should be put through the same rigorous interview process used to hire new employees.

• What level of experience and breadth of services do potential partners have?
• Does the agency share the marketer’s values?
• What type of vetting process is used for affiliates in the network?
• Do they provide ongoing campaign monitoring and brand protection services?
• Do they have an independent best practices or compliance departments?
• Do they stay up to date with industry standards and regulatory issues?
• Can the company provide references?

Select online advertising channels based on your target market. Hiring partners with expertise in market segmentation is essential. Reaching female baby boomers requires a different online advertising mix than reaching male Gen-Xers. Equally important is avoiding channels that could negatively impact the brand.

There are a variety of affiliate marketing channels that might work for DR marketers, including loyalty, social media, virtual currency, e-mail, search and display. The key is to test and find the most effective mix to meet lead generation or ROI goals.

Make sure you know where and how your ad campaigns are running. The word “transparency” is used a lot these days, but with various meanings. True transparency answers the questions “who, what, when, where and how.” If an affiliate network or agency will not disclose specifics about the distribution of a campaign, the marketer is at risk of receiving fraudulent leads or damaging its brand. The source of many problems can often be a single affiliate who merely jumps from network to network after being identified. Without true transparency, DR marketers forfeit visibility and lose control.

Not all leads are of equal value. Lead value may vary by channel, so why pay the same amount for lower quality leads? Working with a transparent network allows a marketer to see which channels are most valuable and set payments accordingly. It is often useful to work with a partner who has experience managing multiple networks. They can help analyze media buying options and make pricing recommendations to simplify the process.

Affiliate marketing is being used by many DR marketers to reach potential customers online. With initial due diligence, affiliate marketing can be a highly profitable component of your advertising mix.

Janice Roetenberg is director of corporate marketing for Adperio, a leading performance-based online marketing and advertising agency. She can be reached at jroetenberg@adperio.com.