Sooner or later, every online store and every B2C provider will reach a point where affiliate marketing becomes an interesting option. Either because of too much dependence on Amazon, whether because of the ever-increasing costs of display marketing and Adwords reservations, or simply because someone threw the possibility of their own affiliate partner program into the room. After all, it’s the only marketing industry that doesn’t require a fixed budget due to performance billing.
The next, logical step is to consider what exactly such an affiliate strategy should look like. And this is exactly the point where most of them, be they lacking in experience and/or know-how, almost throw in the towel again. This is exactly where this article – he wrote Tibor Bauerone of the best-known affiliate experts on the German affiliate scene – step in and provide initial help.
In order to start an affiliate program, there are some preliminary considerations to be made. The main points are
- Sew
- partnership models
- commission model
- Technique
- coupon theme
- Internal/external workflow
- Goals and expectations
Let’s go through all the points together. It is important to tackle each point beforehand and have the answers in your pocket before you begin. Once you’ve figured out all the points, putting them on is a piece of cake.
Which affiliate network should I choose?
The two most important questions are:
- In which country is the program to start / is the program to be available internationally later
- Is the product special or standard e-commerce?
If you limit yourself to one country, it is always a good idea to choose a local affiliate network. There are account managers who know the country, know how the affiliate works in the country and who also have the right, successful partners from the country in their quick selection.
However, if it is clear in advance that the affiliate program will be launched in different countries sooner or later, you should look for a network partner that covers these countries (preferably locally). It is much easier and often cheaper to start a network in a new country than to choose a new one over and over again.
However, a possible strategy of 2 networks should also be considered. It may be useful to choose an international network and a smaller local network.
The second question concerns the product itself, there are special networks for digital products, for banking and insurance, but also for telecommunications and erotica. Depending on the country, there are very special networks dedicated to a specific topic. If you have any of these products, it is advisable to contact these networks.
Otherwise, it doesn’t matter where you go. Almost every network has similar tracking technology and almost every branch can be found on almost every network. The network’s offer, own experience with the respective network and/or the experience of the person who will ultimately be responsible for the program should be decisive. Because this person has to deal with the features and idiosyncrasies of the network day in and day out.
Affiliate marketing is a people business – it doesn’t matter that much What than on it how and that’s it with whom on.
Which partner models should I enable? Which ones are there?
It can be said that affiliate marketing can be used to map everything else you do in terms of marketing activities, but everything to CPO and CPL (per sale and per lead). Basically, you work with the following partner models
- Retargeting – kind of like Criteo, but based on sales
- Cashback – e.g. Shoop. The partner will pass on part of his own commission to the end customer
- Coupon sites
- Content Pages – Pages that are thematically related to a product or target group
- Closed groups – just like employee benefits, offers are only available to a certain group
- Display partner – instead of CPM (CPM) all on a CPO basis
- Loyalty – like Payback or Deutschlandcard
- CSS partners – partners who, for example, place ads on GoogleShopping
- AdWords partner
These partners probably account for the largest portion of affiliate sales volume. There are other great technology partners, but that would be beyond the scope. The question is who should be able to join the affiliate program. Each company must make this decision for itself.
If voucher marketing is a thorn in one store’s side, these partners mean the best sales solution ever for another store. There may already be direct cooperation with loyalty partners and this prevents cooperation with others of this kind, each program operator must decide for himself.
To begin with, it would be advisable not to do without any of the partner patterns if possible. During operation, you can evaluate and optimize the program according to its development.
How much should I actually pay my partners?
On topic “What Affiliate Marketing Costs” already has an article, which briefly discusses costs. However, the following points should be added to the considerations.
- Do I want to authorize new and existing customers separately?
- I want to create an attribution model where the order in the customer journey determines who gets how much?
- Should I create a commission scale that rewards good/better affiliates with higher commissions?
- Do I want to pay different commissions for different products/groups of products or do I want mixed billing?
And one more important tip: Whenever you calculate, don’t forget the network fee. Because networks typically base their fees on the publisher’s commission, the effective cost of a sale or lead is always the publisher’s commission plus the network’s commission. So if the network calculates a 30% network fee on the publisher’s commission, the effective cost is calculated at base commission x 1.3. If the network fee is 25%, the bill is base commission x 1.25, etc.
What do I need to consider technically?
Follow-up in affiliate marketing is the be-all and end-all. Without tracking, the partners and network cannot be paid and there is no way to measure the success of the affiliate program. There are a few considerations and important notes.
Depending on the website or store software used, there are ready-made plugins from affiliate software manufacturers. With each setup, the technology first requests the software.
If you want to connect retargeting, pretargeting, and some other technical partners, you need to install a tracking container in addition to standard tracking. Depending on the network, there are one or two different codes that need to be implemented. Here you should find out in advance whether the in-house technician or technical service provider for the website is familiar with the website, but also whether the website itself offers the possibility of affiliate marketing.
When it comes to retargeting, an HTLP, highly trafficked landing page must also be created. The website prevents overloading the internal server with additional virtual traffic.
If you want to start with multiple networks, a watch switch is essential. Otherwise, you risk paying twice for the sale. Here, too, you need to clarify in advance who is familiar with it and whether you may need to purchase additional services or solutions.
Part 1 tracking theme is now an important tracking point. For classic third-party tracking, it is necessary to implement this or another alternative technology. However, this is where the network can help at any time.
How do I deal with the issue of vouchers?
As mentioned, depending on the store, vouchers are a blessing or a curse. There are providers who generally work without vouchers. Allowing voucher partners also makes no sense. If the vouchers are in circulation or will be in circulation in the future, there are different considerations.
- Can partners use so-called “Ehda vouchers”? (These are vouchers on the “eh-da-are” page)
- Should partners only be allowed to use vouchers and promotions that were created for the affiliate channel?
- Can partners promote promotions that are running on other channels?
- Should sales that were not generated purely by affiliate campaigns be rewarded?
- Do I want to design campaigns only for affiliate partners?
- Do I / can I provide a separate landing page for the affiliate channel?
As you can see, this should be thought out in advance. There are certainly other interesting questions on this topic.
- What does the daily workflow actually look like?
- Do I even have the manpower to devote myself properly to the topic?
- Does a separate position have to be created for affiliate management?
- Do I need to purchase external labor and/or consulting services?
- If so, how much would it cost me?
- Are there other departments involved in affiliate marketing processes or can “short official channels” be used?
- Do other departments need to be trained/acquainted with affiliate matters?
The last two points in particular are extremely important, especially in larger companies. Misunderstandings or even small wars in the departments can directly affect the lack of sales.
When is my affiliate marketing successful?
Although this point is the last, it is sometimes the most important. It is necessary not only to define rational and healthy expectations, but also to constantly evaluate and optimize the results. However, you need goals to optimize. How do you know if what is happening is good or not? Goals and expectations are not the same thing.
The affiliate channel is expected to generate additional sales on its own, but also to support other channels. However, the goal can be expressed in clear numbers. On average, the affiliate channel contributes between 5% and 15% of total revenue. This varies depending on how many other channels are used, how much is enabled and disabled at the affiliate, and how strong your own program is compared to the competition.
Especially in the first year of the partnership program, clear goals are very important. It’s not about achieving these goals, it’s about gaining experience and finding out if the affiliate marketing channel even has the power to go in the right direction.
Only in the second year can you use the collected results and experience to reassess the achieved goals and set a new, optimized goal. Hard interim goals such as KPIs are just as important as soft ones. Soft goals may include reaching a certain number of publishers, securing a special contract, booking possible special placements, etc.
As you can see, there are many points to consider. The above ideas are just some of what you need to consider when rebooting.
About autor: Tibor Bauer himself has been working in affiliate marketing for 18 years. Among his tasks as an affiliate consultant is to support his customers with ideas, experience and knowledge even before starting an affiliate program. Provides advice and support to program operators as well as agencies and affiliates. More information can be found at https://tibor-bauer.de.