Affiliate Marketing is a good advertising foundation for companies to maximize their brands’ awareness and sales. The benefit here is a distribution channel with low risk and good measurability, as companies only pay for the already-made action. This is especially the case when a company choses the option, which only pays a commission for every order (CPO). Advertisers can use various affiliate models to efficiently expand their range online.
Along with Google Adsense, Affiliate Marketing is a company’s’ form of monetisation for their own website. This is the equivalence to offline distributors.
To maximise the results of both online and offline, it‘s essential to have basic knowledge on this topic, in order to avoid some common mistakes.
1. Do not underestimate the relevance and expenses
As previously mentioned, online marketing is the equivalent to offline marketing and should be treated the same way. Affiliate Marketing can be a significant contribution to a company’s online marketing goals. Therefore, this channel has to be maintained intensively, which also includes a strong partnership with top affiliates. In reality, this is rarely the case and the online channel does not get the attention that is needed for a successful and lasting cooperation.
2. Short term expectations lead to disappointment
It’s definitely a misconception, that an affiliate programme’s performance immediately achieves success on a high level right from the get-go. This high level has to be reached by creating a performance affiliate base. This has to be continuously optimised so that within time, the base can grow due to the channel’s own innovative ability.
Empirical data shows that the first relevant results are only available as soon as three to six months after starting the programme. Even then, it’s important for the Affiliate Marketing Manager to keep in mind that it’s a people business, based on cooperative partnership. It’s not collaboration with a search engine. So, campaigns cannot be started and stopped on an ad hoc basis. Affiliate programmes have to be maintained and expanded continuously to ensure a steady development of performance. Companies should add this to their budget plans and shouldn’t forget about the effort affiliate marketing needs.
3. Wasted opportunities through a lack of flexibility and openness
For the last 20 years, Affiliate Marketing has steadily been in motion, and always will be. Affiliate Marketing is permanently changing, and with its innovations in technology and new ways of affiliate and payment models, it also changes the market conditions. Therefore, it is of utmost importance to keep updated with new trends, and be open to new approaches. Thus, networking and staying in contact with affiliates, should be of high priority for Affiliate Managers. Nevertheless, even though being active is essential here, the brand’s value must not be compromised by impetuous decisions.
4. Hidden cost traps in Affiliate Marketing
There are now new challenges for companies, as the customer journey has changed with the digital era. As users have many “touch-points” which can occur on a single channel as well as cross-channels, it’s advisable to use a cookie filter. Thereby, companies do not have to pay multiple commissions for one customer. In this new attribution model, every touch-point gets its’ own quantifier – no matter whether it’s on a single channel, or across channels. This guarantees proportional provisioning within the customer journey.
Advertisers, who don’t want to have multiple commissions, should pay attention to this. Just as they should also pay attention to CPO’s, which have a higher rate than necessary. In the retail sector especially, a comparison of sales is necessary, as the payment is supposed to be referring to the effectively bought products. Returns, taxes and dispatch should not be involved (Net Provisioning).
5. The silo mentality prevents maximum success
In companies, different people typically handle online marketing channels. The budgets for single channels are often determined at the beginning of the year. Thereby, every channel has the opportunity to gain optimal results. However, this silo mentality is counterproductive for the company. Rather than working together, the different channels compete with each other. For better results, companies should make the different silos work across channels. With the interlocking of the various disciplines, the channels work towards the same goal.
The users‘ data is also an important aspect, which offers a base for targeting activities. The information helps to improve the customer journey, as users can be optimally addressed. Here you have to keep in mind, that the undefined borders to other performance marketing channels such as social media or re- and pre-targeting on a CPO-base in display-media, can be another opportunity, not a barrier.
6. Local support for global campaigns
Every country is different. This is also the case when it comes to online marketing and affiliate marketing. Many companies and brands have global campaigns for online marketing. In these situations, it’s of utmost importance that every campaign matches the motto “think global, act local”. Campaigns cannot be adapted on a one-to-one basis, from the home country’s market to the global market. Local market conditions are as relevant as the preferred methods of paying, purchase power and Internet penetration. Furthermore, a global strategy should include channel-related considerations for local networks or affiliate models. This, of course, depends on the branch’s level of development in the country at hand.
As the Affiliate Marketing can be quite different in every single country, flexibility for potential co-operations is necessary for a global strategy.
How to avoid these errors (and others)?
Everyone who wants to be successful with affiliate marketing has to be able to understand and work with this increasingly complex topic, which has changed over the last 20 years (no matter whether it concerns online, offline or different touch-points of the customer journey), the development of affiliate marketing never stops. Stagnation in this field should therefore also be avoided. And even though data-driven campaigns are still not common in affiliate marketing, a targeted control of campaigns is possible by evaluating the percentage of new customers, above-average shopping carts and low cancellation rate.
Advantages of working with external agencies
Many companies choose an external agency to run affiliate programmes, in order to ensure optimal handling. To avoid problems between channels (as mentioned before), the optimal support from an agency includes handling all performance-marketing channels. The budget allocation thereby becomes more efficient, and the different channels follow the same goal. This is exactly the principle in which NetBooster’s follows.
The know-how and time: Agencies who work with affiliate marketing on a daily basis, and are specialists on this topic, have a routine in optimising and developing partner-programmes. They have the necessary ‘know-how’ on the different kinds of affiliate and are able to recommend and create individual strategies. The agencies’ Account Managers are able to invest enough time into developing partnerships, which is typically not feasible for online marketing managers who work for the company itself.
metapeople, (part of NetBooster Group), in Duisburg e.g. has three teams of six people who focus solely on affiliate marketing. Amongst other things, they are specialised in the travel and telecommunication industry as well as in the retail sector (with focus on the fashion sector), and have competent knowledge about particular verticals.
Intensive Contact: Agencies link advertisers and their sales partners as they are in constant contact with all relevant affiliates. Agencies don’t only communicate with them by e-mail or telephone, but also have regular meetings and visit fairs where affiliates introduce new products. As agencies know about new developments, decisions can be made quicker, thereby operations can also be implemented on short notice.
The annual “Performance Night”, that metapeople, (part of NetBooster Group), organises on the eve before the dmexco in Cologne, focuses on this topic. Here, Advertisers are able to meet their affiliates in person, talk to them about different performance channels and also discuss any other topic in mind. Furthermore, NetBoosger Group regularly takes part in networking events to strengthen partnerships with affiliates and work on new co-operations for their clients.
International experience: As mentioned before, the market can be quite different in other countries. As such, leading agencies have knowledge about what types of affiliate will work in which country and which types won’t. When agencies have locations in several countries, they know the particular networks and are able to choose the right strategy for their client.
In 2011, metapeople became a subsidiary of the NetBooster Group. Together they have more than 800 employees in 25 locations around the world. NetBooster Group is therefore able to offer global strategies for optimal use, for clients.
Always up-to-date: Agencies‘ experts are the first contacts when networks and affiliates introduce their new developments and products and furthermore, agencies are always up-to-date with new trends on the market through their daily work. This routine and knowledge about trends guarantees that companies get the best consultation about the products and services.
Development is an important topic for NetBooster Group. Its employees take part in many meetings or webinars with affiliates and networks, where they get to discuss new trends. Thereby, together with the agency, they can directly suggest which clients these innovations could be relevant for.
Permanent exchange of knowledge: Agencies have a broad understanding as they work for clients from different branches and exchange their knowledge within the agency. This leads to an optimised support, as this broad knowledge is the foundation for creating the best individual strategy for each client.
A monthly exchange takes place in meetings at NetBooster Group’s German agency in Duisburg. But that is only one small part of the exchange. As NetBooster works global, the exchange between colleagues from Germany, Switzerland, France, Great Britain, the Nordic countries and also the MENA region, guarantees permanent news about the different markets, types of affiliate and network-developments.
Modern technology: It’s recommended to have one agency for all online marketing channels. The reasoning behind this is quite simple;big agencies are also up-to-date when it comes to modern technologies and for topics just as cross-device tracking, cross-channel tracking or the analysis of customer journeys, they usually have their own departments for technology and development. You can thereby use the whole range of gained data, for your online marketing strategy.
Effective protection against fraud: With affiliate fraud, it’s possible to get unauthorised provisions or those of which are contrary to the contract. Agencies are able to detect such frauds and manipulations because of the daily use of the programmes and the necessary tools. Tasks that are time consuming but always work in the same way are easily accelerated by the agencies’ technical know-how.
NetBooster Group provides a variety of options to avoid such fraud as well as quickly detecting infringements like brand bidding or ad-hijacking. An in-house tracking and reporting tool can for example, measure relevant dates in real time. Clients also have their own access to the real-time analysis of their campaigns and programmes as transparency is of utmost importance in affiliate marketing. To guarantee the optimal use of this tool, NetBooster Group also has its’ own development department.
This also enables us to easily react to individual clients’ wishes, and by interfaces (APIs) standard, processes can be adapted quickly, guaranteeing that merchants only pay for real sales.
To discuss your Affiliate Marketing strategy, get in contact with us:
Managing Director, metapeople Germany
NetBooster Group CEO