The Mystique of Affiliate Programs

When most people think about affiliate marketing, they think about ads on Web sites. In addition to those familiar banners, there are email components to affiliate programs. For those of you new to affiliate marketing, here’s a quick rundown.

Defining Affiliate Program

An affiliate program is a partnership with an online merchant (a Web site that sells goods or services). Essentially, it is a form of online advertising that includes email, banners, text links, pop ups — anything electronic — where a marketer pays only for results.

There are two sides of the affiliate program coin: the advertiser side and the publisher side. As an advertiser, you have the opportunity to place your brand and your products over the Web through a publisher’s sales channel — meaning increased branding and revenues for you. As a publisher, you can partner with advertisers. You earn revenue, take advantage of the real-time tracking and reporting offers, and are paid monthly. For many publishers, an affiliate program is like adding a sales staff without payroll hassles.

How Affiliate Programs Work

Established networks act as a third party to facilitate many programs. Major players include Commission Junction, Be Free, and LinkShare. For an extensive list of programs, take a look at ClickZ’s sister site, Refer-It.com.

Email Marketing and Affiliate Programs

I met with a client this week about the email component of his affiliate program. He couldn’t have been more enthusiastic about the results.

As a merchant, he uses his affiliate program to achieve email cost-per-acquisition (CPA) deals. He employs his networks to locate affiliates with email lists for use in his retail sector. Sometimes, he’ll insert a banner or button into an email newsletter. Occasionally, he mails a dedicated deployment to the affiliates’ lists. CPA revenues are used to negotiate the commissions, based on the degree of exposure. For instance, if only a button runs, he may pay 5 percent of sales. For a dedicated deployment, he pays 10 to 15 percent revenue.

Our client posts his creative on the network and affiliates “pick up,” or download, it. When the creative is pulled from the network, code to track click-throughs is included. This makes it easy for both parties to track activity. Reporting is in real time, so when recipients start responding, you see results.

Our client says he has saved lots of time with IT resources, because affiliate programs do the vast majority of work for him. Essentially, the affiliates take responsibility for making sure the tracking is correct. Why? So they get paid! Now that the program is up and running, much of it is on autopilot.

Our client represents a major household name brand. If you’re a merchant and your brand has high awareness, you’re already ahead of the game. Unknown brands must work harder to find strong affiliates with responsive audiences. A well-known brand does a good amount of the talking for a merchant. Of course, as with any marketing, a great deal of a campaign’s success depends on a strong set of clearly stated benefits in the offer. If you’re a merchant, offering premiums or strong discounts are a boon, but remember that they need to relate to the product and original offer.

The Hazards of Working With an Affiliate Program

One of the hazards of working with an affiliate program is that you can lose a bit of control with regard to branding issues. For example, affiliates may take your text link or banner and add sales language that is not always correct or partially changes the offer.

There are many points of view about affiliate programs, and I’d love you hear your thoughts about this subject. That said, please drop me an email with your point of view or comments about how your affiliate program is working.

More E-Tale Horror Stories…

Before I forget… does anyone out there have email marketing horror stories to share? I’d love to hear from you — please drop me a line. If you would like to receive our free monthly newsletter on email horror stories, click here to sign up.

Have a great week, and good luck with your marketing efforts!

— Lynne

P.S. Thanks to all for your diligence in keeping us on track with the spelling stuff (wink, wink). ClickZ had a technical glitch resulting in errors that looked like typos — now fixed, to our collective relief!

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