Affiliate Program best practice tips
The article below was done in 2008, I look back at it and not much has changed. The principals are still very much the same. This article is aimed at merchant/advertisers. I hope you find it useful.
AffiliateProgramAdvice.com
Affiliate Marketing Best Practice 2008
WHAT IS AFFILIATE MARKETING?
In layman’s terms, affiliate marketing is about the relationship between you (the merchant/Advertiser), the affiliate tracking software provider (The Network) and the affiliates (publishers). It is ultimately a loyalty program between you and the affiliate with the network operating as a facilitator and intermediate. Your affiliates will become your virtual sales force driving new traffic, new customer acquisitions and ultimately sales through a variety of tracked linking methods. You pay your affiliates only when a sale or lead has been generated. In essence you are only ever paying for results.
WHY IS AFFILIATE MARKETING EFFECTIVE?
Everything can be tracked back as it is all transparent right down to the last penny. Advice, get a good analytics package and look beyond google analytics
• Affiliate Marketing increases brand awareness
• Brings your products and or services right into the homes of your target audience
• Your affiliates are your partners and some will become champions of your products and or services.
• Affiliates have cross over skills in their own marketing and technical experise.
• Good old fashioned relationship building
What is affiliate marketing best practice?
In an industry where there is very little written about affiliate marketing best practice, “best practice” can and does mean different things to different people. From an affiliate’s perspective it’s about being paid on time, it’s about clear terms and conditions, it’s about being given the right tools and information to assist them.
From a merchants perspective, it’s about affiliates adhering to their terms and conditions, it’s about how affiliates are promoting them or should be promoting them and its ultimately about getting new sales and or leads but at no risk to the their brand or existing marketing initiatives.
For affiliate networks, its about facilitating merchants and affiliates ensuring their technology is reliable, payments in and out is swift and providing a service that can accommodate the growing demands of an expanding industry, in a nut shell best practice is all about procedures and ethical marketing.
You may be quite surprised to hear that there is no mystery or marketing psychobabble to have to decipher, 99% of best practice is good old fashioned common sense and remembering who our end user is, consumers and affiliates alike.
But if there was one single piece of advice I had to give any merchant coming into our industry, if your website does not convert overall, then affiliate marketing is probably not what you should be focusing on as no amount of additional traffic is going to fix the real heart and soul of your business, namely your website and or demand of your products or services.
There are very few clear guide lines out there and some even conflict with others. The consequences of this renders the industry exposed to ambiguity and open to multiple different interpretations, further to add, each guide can lean more in one direction depending on which ever side of the fence you happen to be sitting on.
What we have seen develop in recent years and in the absence of a definitive best practice, is a pattern of “best practice” being initiated by experienced industry authorities from all sides of the fence. In essence the industry has regulated itself to a greater or lesser degree and no better example can be made, then in the case of combating spyware in the UK. In fact, best practice guides can be traced back to the first affiliate marketing white paper in the UK written specifically for e-consultacy.com in 2002 by yours truly. Since then we have seen quite a few publications emerge and exploring best practice.
When the IAB announced it was coming into the affiliate marketing space, it was a bitter sweet moment. On the one hand those that had been working in the industry immediately recognized this was a clear signal that affiliate marketing was not longer the poor relation to other marketing initiatives and that it had come into its own. How ever one feels compelled to ask questions about motives and in who’s best interests were they looking after? Their subscribers or the wider industry at large? However whatever the motives at least there are big companies trying to get some industry regulations in place which can only be seen as positive. Many of them come from the affiliate networks themselves. The political climate still battles with “its one thing writing about best practice but its an altogether different matter enforcing it.”. The writing has been on the wall for a long time and we advocate and would support any kind of affiliate association set up by affiliates for affiliates with an independent and impartial authority can accommodate more then just its own members. Until we come together collectively the industry still remains fragmented but a lot less so then ten years ago.
Best Practice
When setting up an affiliate program merchants need to set up the rules for affiliates to follow. We call these terms and conditions. Terms and conditions is a vital element of any affiliate program. It is the first port of call for affiliates to understand what they can or can’t do. It’s the one piece of information that will protect all parties. It’s the one piece of information that merchants and affiliate networks can refer to in the rare cases of an affiliate in breach of the terms and conditions. In the same way your customers have to adhere to returns policy, affiliates need these guide lines too. Do you need to seek legal advice? Your affiliate network or agency can help you put this together for you, but a word of caution, if you make your terms and conditions too restrictive or too lax, both scenarios could cause you problems down the line. The first could render your affiliates to be confused and will assume they can do XYZ when really you only wanted them to do XY & Z has you pulling your hair out, probably best not to lock the door after the horse has bolted. By contrast, a too restrictive terms and conditions could deter affiliates from joining your program altogether, or end up providing our industry bloggers with fodder to highlight the fact that you don’t get affiliate marketing. A good true example of a restrictive clause “affiliates must not rank above us in the search engines” and here is another little gem, “Affiliates must not bid on the term Flowers”, from a well known florist.
It’s ok not to know, but it would be unwise to bury your head in the sand, there are thousands of people all wanting to help you and here is a tip, why not ask the very people who will be promoting you? A good example of terms and conditions
Tools
Industry sized banners
There are many that would argue the point of banners at all, indeed if we look at our stats we know the majority of leads or sales do originate from text links. How ever we have been monitoring the effectiveness of good strong quality banners and if they really do yield any impact on sales or leads. Without hesitation, they do drive leads and sales as well as raising or re-enforcing the brand.
So what size banners should you offer. The most popular is 468×60, 88×31, 125×125, 234×60, 120×600.
We also supply the following to cover all bases. The majority of affiliates will find at least one suitable size banner. Note keep your domain name extension off the banner, why? Affiliates deem this as affiliate commission leakage. They would rather their visitor clicks through the banner link then type the url directly into their browser. The rationale here is that the visitor would not have known about the merchant unless the visitor had visited the affiliate’s site first, quite right too!
Banners & Buttons
Banner Size Banner Type
468 x 60
234 x 60
125 x 125
120 x 240
120 x 90
120 x 60
88 x 31 Full Banner
Half Banner
Square Button
Vertical Banner
Button #1
Button #2
Micro Bar
Rectangles & Pop Ups
Banner Size Banner Type
300 x 250
250 x 250
240 x 400
336 x 280
180 x 150 Medium Rectangle
Square Pop-up
Vertical Rectangle
Large Rectangle
Rectangle
Skyscrapers
Banner Size Banner Type
160 x 600
120 x 600 Wide Skyscraper
Skyscraper
Text links
This really speaks for itself, the best converting text link is in fact, your domain but without the extension. Example BadboyMMA
Deep links
I have always found merchants who don’t allow deep linking to a product and or category a little short sighted. We know the consumers search for products, product numbers and product brands. I always thought this restriction was done through lack of understanding, but recently, I became aware that some resellers in the USA are not allowed to promote certain brands via the affiliate route and therefore they disable deep linking to this product and or category. If there are no such restrictions in place then allow affiliates to deep link.
Data feed
A data feed is a file that contains all the products you sell in your online shop. This file is in a standard format that can easily be read by an affiliate’s script to display all these products on his or her website including an affiliate link to the specific product’s page in your shop. This link directly to the product specific page on your site is called a deep link. The most used formats for product feeds are text files in either CSV or Tab delimited format. In a CSV formatted files the various fields of the product record are separated by commas and text is enclosed by apostrophes (example “product number”,”product name”,”product description”, price,”URL”,”image URL” which with data would look like this: “P123N”,”Green widget”,”Our green widgets…”,25.00,”http://www.thewidgetshop.co.uk?prodid=P123N”,”http://www.thewidgetshop.co.uk/images/green_widget.jpg”). In a Tab delimited file you have the same data as in the previous example, but instead of commas and apostrophes each field is separate by a
Clear information
Don’t assume anything. The amount of affiliate programs that have been launched without any demographics of what type of customer the merchant is looking for, its so prevalent and what this does is make the affiliate stop and think, do they really want to go out and do the research on your products? Your audience?
Affiliates are brilliant at sending targeted traffic, they are experts in organic search, they are wizards with technology and spotting new trends and their analytical skills are second to none, but their one weakness, they cant read your mind! You need to provide clear information, who, what, where, when and how. Would you allow a complete stranger to promote you without giving them any idea about your business? So why would this be any different for affiliates.
Affiliate News letters, should contain news.
New in
Promotions
Best sellers
Copy
Campaigns
Graphics
Off line PR
Above all campaigns specifically created with affiliates in mind.
Clear payment terms
When will you validate a sale or a lead? When will affiliates get paid? How will affiliates get paid? Will you be doing claw backs. A claw back is taking back affiliate commissions, example on a fraudulent order? Perhaps on returns? Or affiliate abuse?
A word of caution, if your returns are very high, most likely affiliates will not continue to promote you if you claw commissions back. Maybe this is a case where by the problem lies squarely at your door step?
Affiliate network own terms and conditions.
Don’t’ forget, affiliates and merchants are also bound by the affiliate networks terms and conditions and your own terms and conditions should not conflict with the affiliate networks terms and conditions.
Paid Search and brand bidding
Firstly, if no one is looking for you in the search engines, you are not a brand, you are actually trying to build a brand. This is a term that is misused a lot. So if no one is searching for your name, it would not be advisable to implement a no brand bidding policy. You may decide to do your pay per click in-house, in which case you would ask the affiliates not to bid on your name, or not to compete on terms. You may even decide to have a total ppc ban. But you need to weigh up the pros and cons. Affiliates front the cost of the click, they take the risk and the only time you pay out is when a lead or sale has occurred. But affiliates will need to make a return of investment, so you are back looking at your website conversions. Some affiliates are experts, in fact most affiliates that we know who do paid search are better then the big Paid Search Agencies.
Merchants who have trademarks, the rules have changed slightly. Once upon a time in google, you could protect your name from competitors and as an extra measure to ensure affiliates don’t brand bid. How ever google once again shifted the goal posts, Helen Deehan of Tigerstep.com says “The recent change in Google’s trademark enforcement policy has caused a stir in affiliate marketing circles. Google’s justification seems to be that if a user is looking for a given company then they are most likely to go to that company whatever competing adverts are shown for a particular search. As long as an advert does not explicitly infringe a third party’s trademark rights, Google see no need to unilaterally deny that advert. They also see no need to act as some kind of unpaid internet trademark police. The big question, of course, is what impact this change is likely to have on both trademark owners and advertisers of all sizes. The immediate change is the sudden appearance of a plethora of new ads by competitor companies bidding on searches involving third party brand names. The incentive here is easy to see.
Imagine a budget holiday company, looking to take market share from their biggest rival. Why not pay to get your advert shown when someone is searching explicitly for the rival? After all, a customer in the market for a budget holiday of the type you and your rival supply might be just as interested in your offering as that of the company they are actually searching for.
Or imagine a vacuum manufacturer suddenly free to bid on the word ‘Dyson’. A trademarked term, yes. A customer interested in vacuum cleaners? Probably. Worth a few pennies in advertising? Of course.
Annoying to Dyson and Co? Absolutely.
The next obvious change (and of course the real reason Google have implemented this) is the upward impact on CPC prices. If you and only you are allowed to bid on your trademarked brand name, then the ad that gets shown is your ad, and it will only cost you a penny. If your main rivals are now also free to bid on your trademarked term, they will naturally bid up the cost of advertising on that term in order to take the coveted top spot away from you.
Merchants who have previously implemented brand restrictions are now faced with something of a dilemma. Do they leave their T&Cs unchanged try to force affiliates to ‘keep off the grass’, or do they try and let affiliates absorb some of the new extra cost associated with protecting the brand against rival merchant bidding by relaxing the conditions and reactivating brand bidding?
Before this change, the incentives to restrict keyword bidding were obvious – the merchant had an easy way of controlling the cost of the most effective advertising they were likely to see – their own campaign on their own brand name. Where a retailer was also running an offline or PR campaign which naturally drove increased searches for their brand via search engines, this was massively important. The alternative of allowing affiliates to bid on brand terms effectively meant paying out again via commissions, an increase in marketing costs almost impossible to justify.
You need to see who exactly is bidding on your brand name. If it is affiliates of competitor programs then perhaps you should explore opening a dialogue with your competitor counterparts. Putting into place revised Terms & Conditions which state affiliates are not allowed to bid on competitor brand terms using your trademark and affiliate tracking URLS associated with that trademark. In return
for which your competitors would also implement the same T&C’s.
While this may help reduce some advertisers I doubt it will clear the pitch.
In the past I have tended to operate 2 policies that allow brand bidding via an affiliate program. The first is that the affiliate has to increase coverage for your brand via an agreed list of more generic terms, offsetting the return from so called ‘easy’ brand term sales against increasing coverage on more challenging ROI terms. The other option is to discuss with your network the option of allowing affiliates to bid on your brand name but reducing the commissions for those terms.
At the end of the day the decision is down to each individual Merchant. I would advise all companies operating an affiliate program to republish their Terms & Conditions so affiliates are reminded of their particular position on Paid Search activities.
If you have an open policy, then you need to ensure that Affiliates who are bidding on your brand name or misspellings, or who are using your brand name in their ad copy, funnel that traffic direct to your URL. Remember that it’s almost always better to try and sort out problems with brand bidding affiliates in an amicable way.
Finally, if you have implemented brand bidding restrictions you need to make it crystal clear which terms affiliates cannot bid on.
Each merchant will be different, some will attract more attention from competitors than others. Whatever policy you decide to implement do not be bullied into opening up brand bidding if you still feel it is not right for your company. You should be undertaking regular checks on the search engines at various points during the day and week and should review your position on brand bidding as required.
Multiple affiliate programs
If you have multiple affiliate programs a visitor can technically have visited your site through more than one affiliate cookie. For example when the visitor searches for one of your products in a search engine and clicks on several of the search results. Some of these results belong to some of your affiliates in affiliate network A, some of them to your affiliates in network B. On the order confirmation page you have implemented the tracking codes of both networks. When the visitor arrives on the confirmation page and because he / she is tagged by both networks the sale will appear in both networks.
To prevent these double registrations you can work with a local cookie. When the visitor comes to your site through an affiliate link the affiliate network can, if asked, pass on some extra data in the URL. This data includes a code to indicate the affiliate network and most of the times also the affiliate ID number. You can then based on the code indicating the affiliate network set a cookie that stores this code. This cookie should be set on any page where an affiliate can direct a visitor to. On the order confirmation page you can then read the data (the affiliate network code) from the cookie you set and based on the code display the tracking code of that affiliate network only. Normally you set the code for the affiliate network of the last referring affiliate. But ask your affiliate network what their policy is on this.
Conclusion
It’s not rocket science, it’s about being proactive and fair. Sometimes it’s about compromise, some times it’s about holding your hand up and saying “hey I don’t know” be aware there are thousands out there ready to help you make the right decisions and you end up being respected. There is and can be no room in this industry for arrogance or egos, certainly not when you start to work with the people who know this space intimately. Remember affiliates in some cases will know more then you in areas of search, be ready to accept this, but no one knows more about your business then you do! Affiliate marketing is about partnerships, all three players all working together to drive your business forward. Remember you only ever pay for results.
Written by Jessica Luthi
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