Affiliate Marketing For Online Merchants

There are hundreds of small online retailers without affiliate campaigns in the UK. The aim of this article is to provide an overview on the important factors required to create, manage and potentially out rival an affiliate campaign. The first section consists of basic understanding on affiliates and affiliate marketing. A set of questions are also provided for merchants to decide if they need an affiliate campaign. The second section shows the affiliate campaign setup process and the final section has useful ingredients for recruiting affiliates and managing a successful affiliate campaign.

This section is important to understand what is affiliate marketing, who affiliates are and if you being an online merchant, need an affiliate campaign?

What is an affiliate campaign?
In simple terms, affiliate campaign is an opportunity and process for online merchants to promote their products or services to the relevant audience through affiliate partners. Affiliates provide targeted users to merchants and earn a percentage or fixed bounty in return.

How does it work?
There are several ways merchants could setup an affiliate campaign. The most successful method is by working with an affiliate network and they will be responsible for setting up the campaign for you from the beginning. The other option is to purchase an affiliate tracking software and manage it yourself. We will explore the pros and cons of each setup later in the article.

What is an affiliate network?
An affiliate network is a technology provider to manage an affiliate campaign. That will contain setting up the affiliate campaign, managing sales & tracking, recruiting affiliates, authorising payments, communicating and providing promotional contents to affiliates.

The affiliate mix!
As mentioned above, affiliates could be individuals working from home, professional affiliate or media companies. The aim of each affiliate is to provide relevant traffic to merchant website and earn a bounty in return. The affiliates mix could entail content websites, email newsletter companies, search engine professionals, individuals with websites, blogs or forum, cashback or voucher websites, RSS engines, article directories, widgets, content writers and a so on.

Do I need an affiliate campaign?
This question can not be answered by a network or an affiliate for a merchant. If you answer Yes to the questions below then definitely you need an affiliate campaign.
1 – Do you have a website?
2 – What do you sell on the website (products / services)?
3a– If it is service then do you gather customer data i.e. Contact details of potential customers?
3b– If you sell products then is the website transactional?
4 – If yes to point 3a or 3b then write down your profit margins on a paper.
5 – Do you need relevant traffic on your website i.e. potential customers to purchase your product or service?
6 – Do you advertise online / offline? If yes then do you have a sales budget? Some may argue that it should be covered in the marketing budget.
7 – Do you wish to pay affiliates only when the customer agrees to purchase your product/service?
8 – Please identify a couple of your direct competitors and view their websites or call their marketing mangers to find out if they have an affiliate campaign and what value do they offer to their affiliates? This exercise is only required if you are not sure what should you offer to your affiliates.
9 – Once you have analysed how much you are willing to offer to affiliates then deduct the cost from your profit margins. For example if you are computer retailer with only 5% profit margin then how much are willing to give away to affiliates? The last point can guide you to find the value/bounty you can offer.

Have you answered yes to the top six answers and identified the bounty you will be willing to offer that is similar if not comparatively higher. Don’t worry if it is not even close to what your competitors have on offer for affiliates. Well, my conclusion is that you definitely need an affiliate campaign.

The second section shows how to setup an affiliate campaign and what elements are important to consider while choosing the right technology or technology providers.

Affiliate Technology
I do not recommend setting up an affiliate campaign through purchasing a third party affiliate management software. However, it may be comparatively cheaper but may not be an effective and competitive tool for a new merchant in the industry.

The major issues are you are required technical resources to setup the technology, recruit and communicate with affiliates, make regular payments and so on. So let’s concentrate on the tried and tested affiliate technology and management providers.

Affiliate Networks 
Affiliate networks are affiliate technology and management providers. Well, some of them are just technology providers so it could be tricky for you to choose the right network just by searching in Google. Some of the important factors you need to consider while choosing an affiliate network for your campaign are as follows.

Read affiliate comments on the affiliate networks on Affiliates4u.com forum. You will be surprised to explore minor issues which are neglected by large networks i.e. effective communication or affiliate payments on time. I will also recommend posting a question on the forum to view how and on which network affiliates would like to work with you and if your affiliate proposition is appealing to them?

There are 4-5 cost of layers involved in the process; Setup cost, affiliate commission, network markup on affiliate commission, monthly management fees, occasional promotional cost and these are excluding VAT. The setup cost only covers the integration of tracking pixels and not the banner/creative designs. The merchants are responsible for providing the creative.

Just to give you an idea, the setup fees could be in the range of £0-£5000, monthly management fees £0-£500, network markup is normally 20-30% on your affiliate commission, promotional cost could start from £50 to £20,000 and don’t forget to include extra cost if you have an agency to manage your campaign. Of course there is no harm in paying all that cost if you can achieve a valuable ROI that should be reviewed at least quarterly.

I would strongly recommend working on affiliate commission and network markup model with the networks. I hardly view good return on monthly management fees, promotional cost and some ridiculous set up fees. If you are not sure then email me and I can recommend some networks based on your business and product range.

Another factor you need to analyse while choosing an affiliate network is your competition. If your competitors work with network A then why should you work with network B? What additional benefits do they offer you and at what cost? Some networks specialise in particular niche that can beneficial in terms of gaining similar affiliate base and offering them additional bounty on the same channel. It will also be useful to review your network performance at least on quarterly basis.

How to setup affiliate tracking?
Once you have chosen an affiliate network and analysed the cost, it’s time to start technical integration. The first step is to add tracking facilities (pixels or tags). It is normally a JavaScript code that needs to be implemented on the checkout confirmation page. The aim of the code is to track sales referred by your affiliates and fire the relevant order details back to your affiliate network. Your network can help you to implement and test the tracking pixels.

Here some of the important elements you need to understand at this stage.
- If you are using more than one affiliate network at a time then consult with your networks for local cookie to stop duplicate sales.
- Are you de duping the sales against only affiliate networks or the entire marketing mix?
I would suggest reading my other post “De Duping For Merchants” to understand how merchants should implement the tracking facilities to have better control on the tracking facilities.

Links, Creative, Product Feeds, Dynamic Contents & phone numbers
Prior to launch, you will have to provide essential contents to affiliates that can be published on their websites. The contents are delivered through the affiliate network. Here are some tips for you to provide links, banners, product feeds and dynamic contents.

Links 
- Provide deep link facility to affiliates
- Update links on regular basis and drop the referrals on best selling products, categories etc

Creative
- Design banners in different sizes, from different categories & in different colours
- Clear and clean call to action on the banners
- Design jpg/gif banners and flash based if required
- Use your strong brand identity, if the brand is well known
- Integrate your other promotional themes in the banner i.e. as seen on TV, on BBC etc
- Add authentic credentials (not SSL logo) i.e. Best Seller Award, Lowest Price Award etc
- Use quality product images
- Use rollover effects to add 2-3 frames/layers of message but don’t exaggerate it with flashy effects

Some of the banner sizes acceptable for affiliates are as follows.
- 728 x 90 Leader board banner
- 468 x 60 Full horizontal banner
- 234 x 60 Half banner
- 125 x 125 Square button
- 120 x 240 Vertical banner
- 120 x 90 Button
- 120 x 60 Button
- 88 x 31 Micro button
- 300 x 250 Medium Rectangle
- 250 x 250 Square Pop-Up
- 240 x 400 Vertical Rectangle
- 336 x 280 Large Rectangle
- 180 x 150 Rectangle
- 425×600 Extra Large Rectangle
- 425×500 Extra Large Rectangle
- 425×425 Extra Large Rectangle
- 160 x 600 Wide Skyscraper
- 120 x 600 Skyscraper
- 300 x 600 Half Page

Product Feeds
This is a huge topic to be discussed separately but let me to give you an overview on its purpose and integration. Product Feed contains the list of necessary product information required for your affiliates to publish your entire product range on their websites. Product Feeds could be provided both for products or services depending on the choice of your network. Product feeds could be supplied in excel, xml or text file and some of the important columns in the product feed are be as follows.
- Product Name
- Price
- Description
- Image URL
- Click through URL

You can include additional elements that could be necessary based on your product information i.e. delivery cost, colour, size, large image URL, specification, quality, delivery time, warranty, SKU, EAN, ISBN, voucher code, up sell and cross sell item URLs etc.

I would suggest providing additional and unique information to affiliates and networks that makes it easy for them to dynamically map the products. I was setting up a website for mobile phones and the product feeds from a merchant did not have colour attribute in a unique column for us to easily map it with our system. Finally, we decided to drop that merchant from our database as it required too much admin resource to manually check and add colours. Consult with your affiliates as which attributes/columns would they like to view in the feed that will make you a winner. View the list of comparison engines at paler.com to understand how your contents could be published through product feeds.

Dynamic Contents
That entirely depends how creative your network and developers are to design dynamic contents such as hotel booking form, fight ticket checker, mobile phone form, search form in the banners, wordpress plug-in for your affiliate feeds, widgets etc. Some networks do offer these facilities as built in their technology package and others expect you to design and incorporate it separately.

Phone Number
This is a controversial topic between merchants and affiliates. If affiliate referrals are conducting sales over the phone number then how tracking pixels are implemented etc. First of all merchants needs to make that decision if they are going to allow phone numbers on the website even for affiliate referrals. It is fairly easy to hide the phone numbers from affiliate referrals and I will strongly recommend it to build strong relationship with affiliates. The phone number could be concealed with the help of the tracking facilities. Some of my clients have disabled the phone number by identifying the campaign through the analytics package and others by providing additional parameter in the affiliate URL such as www.network.com/?p=n

Affiliate Recruitment
Now the final stage is to recruit relevant affiliates and building strong relationship with them. There are several ways to recruit relevant affiliates.

- Publish your campaign details on affiliate forums i.e. affiliates4u.com
- Attend affiliate exhibitions, round tables, parties and discussions
- Trawl on search engines with relevant keywords i.e. ‘computer memory’ shows more than 73,000,000 thousands results and it is fairly easy to find 20 affiliate websites from the first ten pages. This exercise can help you identify affiliate websites ranking higher based on your product or service keywords
- Contact your network to be included in monthly newsletters and request them to publish your campaign on their affiliate page that may not be free on some networks
- There are some software packages to find affiliates but I have personally never used it. However, I do recommend Hitwise but it may be expensive to justify for affiliate recruitment mainly for a new or small retailer. Hitwise can provide detailed list of websites driving traffic to your competitors that also include affiliates.
- I used to follow a tricky procedure but it really works. Once you have identified a couple of relevant affiliates. Use alexa.com free service to find the similar websites. I used to have unbroken chain for hours to explore relevant affiliates.
- Create an affiliate page on your website with detailed information on the commission, T&Cs and link to the networks
- Your customers could be your affiliates. Try adding your affiliate proposition in the order confirmation page or dispatch email.
- Setup additional benefits for new affiliates i.e. entry in to competition or double commission on first sale

Recommendations
Finally, here some important tips for online merchants that could potentially enhance the exposure and loyalty with your affiliates.
- Work with the different mix of affiliates and build strong relationships with your top 20 affiliates
- Keep researching new affiliates from networks, forums and analytics packages
- Validate the sales and make the affiliate payments on time
- Hide the sales phone number if possible
- Be honest to affiliates, don’t hide if you are not paying commission on VAT or delivery charges
- Offer discount voucher codes on products, categories or on the basket value
- Communicate frequently with your affiliates with latest offers, deals, voucher codes, creative and also show appreciation to them for working on your campaign
- Provide creative banners, graphics and latest product feeds
- Engage the affiliates through regular competitions
- Offer different or layered bonus structure to top performing affiliates
- Offer them instant support through email, phone, forums or internet messengers
- Affiliate campaign is built mainly on relationships and not just technology. It is vital for you build strong relationship both with your networks and affiliates
- Finally be simple, honest and straight with your affiliates

Good Luck.

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