At this point you probably encountered other businesses earning well through offering a partner or affiliate program and want to learn more on how you can excel with proper affiliate program management from the start.
Well…
You’ve come to the right place! With many years of experience in the industry and founders that have worked all sides of the table, as publisher, advertiser and affiliate network, we’ll spill the beans on hard earned experience and guide you through the industry pitfalls and save you time and steps which might cost you dearly and include many tips that you can implement for free!
We’ll take you through everything and once you have the basics in place we recommend to read our advanced guide, that can take your (at that point) current affiliate activities to the next level.
The basics
To get you started, then the absolute basics is that you have a website or eCommerce that sells something and you want another website (affiliate) to refer relevant traffic to your business.
Obviously they don’t do that for free (unless you know or owe them), the way that is done is commonly via a partner or affiliate program, where they get commission per completed action, which usually is a sale or lead.
How to attribute that commission is in most cases via an affiliate program offered through affiliate networks (we’ll get into the details of affiliate networks later).
Unless you’re a large advertiser and can develop your own partner program, but until then, affiliate networks is the way to go and is how you can reach a large audience of affiliate partners and match make the ones that fit your business + have the affiliate network support and software help you track and grow those partners.
The affiliate network essentially offers the software to track sales as a result of the visitors sent by your affiliate partners. From the revenue amount the affiliate network calculate a commission, which is paid back to your affiliates as reward for their efforts.
The largest affiliate networks in the business are Awin, CJ, Tradedoubler, Daisycon, Adtraction, TradeTracker, Partnerize, Impact.com etc. In another article we’ll cover the benefits of each to find you the ideal match.
The affiliate marketing model
Next step is setting up the affiliate partner program, but first we need to lay out the details and material to affiliate program management that affiliates and networks require.
- Strategy
- Commission
- Tracking
- Descriptions
- Promotions
- Banners
- Product feeds
- Types of affiliates
Affiliate marketing strategy
Going into the business you need to have a strategy to pave the way for growth. Take inspiration from the place your business is now and where do you see it in 3 years with affiliate marketing helping to achieve that.
To give an example, are you currently present in 1 country, but wish to expand abroad, then affiliate is the right way to go, because it is very forgiving and cost effective trying out new markets with affiliate marketing. Although factors like brandawareness has an effect of how easy it is for you to penetrate the market and have success.
Also going into new markets you need to be more aggressive on commission and incentives to make sure you can make impact in a market already filled with competitors.
Consider what your strategy is on how to attract affiliate partners to work with you. Is it a large product portfolio, good conversion rates, unique product offer, high commission, strong brand, consistent relevant promotions among others.
There are many factors to consider, but a well tailored program starts with a great performing website and good products or services to sell, because that adds up to making it easier for affiliates to sell and earn you revenue.
For the strategy you also need to determine which types of affiliates create value for your business besides making sales. If you are starting from scratch I recommend testing all and with experience narrow the partner types you see work well for your business. Read more about the individual types further down.
Commission model
This is usually the most common question and it also has the most common answer: It depends…
Because it depends on the strategy, do you wish affiliate to be the driver of incremental sales, driving new sales, increase conversion rate on your website, let me take you through the things you need to consider.
Every industry is different, but the most common commission is a percentage of sale. How to find what percentage to offer, you need to look at your ROAS (Return On Ad Spend) target.
For the sake of simplicity, let’s say target ROAS is 10x the spend, meaning offering a 10% commission would give you 10x return.
Calculating affiliate EPC
In order to find out whether that is attractive to your potential partners we need to calculate how much an affiliate would earn per click and anything about or above 0,3€ pr. click is good. Again this depends on the industry, country and competitiveness in the market, but is a good rule of thumb.
Affiliates call this the EPC (Earnings per click) which is their main metric, because factors like conversion rate, average order value and commission weigh in, but the EPC will tell them how much they can expect to be paid all things considered.
To calculate that, you need to look at how much your business earn per click and for the sake of simplicity, let’s say your analytics tells you, that on average you earn 5€ pr. click, then if your plan was to offer 10% commission of sales, then what would be your cost pr. sale, is the affiliate EPC and they would roughly here earn 0,5€ pr. click, which would be a strong starting point.
You need to consider that this is an estimation before we have data and here is how it’s calculated.
(Revenue / Click) * Commission = Affiliate EPC
How to calculate affiliate epc
We recommend you talk with your affiliate manager or affiliate network to have insight on what EPC you are trying to hit in order to be competitive.
Also bear in mind that the level you decide on, there should still be room to negotiate higher commission, which we also go more in-depth about in our advanced parthership management guide. Never max-out on the general commission you decide to offer.
Because once a commission level is launched the only way adjusting it should be upwards. If commission levels are regularly decreased it will hurt your reputation and business doing affiliate. Several affiliate programs have destroyed the affiliate partnerships channel for them by adjusting commissions regularly to achieve short-term gains.
How does affiliate tracking work?
The idea of tracking is easy, but the implementation in todays environment being compliant can be tricky. Most networks are helpful, but this is an area we often assist companies, because we have in-house developers specialising in affiliate network tracking and many years experience integrating them.
The fundamentals are, that an affiliate has a tracking link on their website, once clicked, they end up on your website and will be tagged, if they convert, the information about the sale will be sent to the network and a commission calculated based on the agreement.
To be able to make the partnership happen, usually a two-part tracking solution needs to be installed. Each network has their slightly different ways of doing so, but it always consists of a solution that tags the visitor with cookies or other means of tracking and then a conversion script that triggers when a tagged visitor makes a sale or lead that needs to be attributed to an affiliate.
There’s a multitude of affiliate tracking solutions out there and the overall idea is the same, but implementations and capabilities are different. Read more about it in our section for affiliate marketing tracking integration here.
Description and onboarding
The first impression an affiliate gets of your business, is them browsing their networks or competitor websites for possible businesses to promote.
When they want to learn more, they search up your program where it is available and reads the terms and descriptions available.
Usually this point is underestimated and the necessary time and material not properly created to give a good presentation and first impression of what you offer, all points should count towards making your affiliate program attractive for potential affiliate partners.
This is why you should ask yourself, why should an affiliate join your campaign and start promoting your business and first of all give a short written presentation along with key areas mentioned that sells your business to them in regards to picking up your campaign.
This could be numbers on AOV (Average Order Value), CR (Conversion Rate), potential EPC (Earning Per Click).
Could also be details about your business on what to promote, like which specific products are bestsellers, what are the peak seasons, how to filter your product search to find specific products or services that might be relevant.
Or attractive affiliate promotions, like you hold competitions regularly, give first sale a manual bonus of 50€, you update promotion material and banners regularly to fit peak season etc.
Promotions
To make sure to nurture your affiliate program and attract affiliates working with you and grow your current relations, then here are some ways you can make sure you are present in the market.
Update affiliates on what is on sale – This is free, but will point them in the direction of what to promote.
Affiliate competitions – You need to be creative towards how you can make a competition, but sales or revenue goals are the most common to engage with you affiliates.
Campaign material update – Regularly update banners, product feeds etc. to first of all make sure it’s still relevant, but also to promote towards your affiliates when to update their promotions.
There are plenty of ways to promote your program towards affiliates, it very much depends on your business and industry, but the key takeaway should be that the goal is to be present towards your affiliates and engage with them whenever you have something relevant.
Product and data feeds
Essential for affiliate marketing today is that you offer a product feed for your products or services available.
Once your program is live it becomes clear that these feeds needs to stay active and working, why we also offer a feed management and monitoring tool, that makes feeds compatible, but also alerts if something is wrong. Make sure to check your feeds often, as they will be a key driver to success.
In most cases you already use feeds integrated with your facebook ads or Google shopping ads. You can use the same for affiliate marketing supplied to your affiliate network.
If you do not already have a feed available, services like Avecdo.com offer 1 free feed and works with most CMS and networks.
A product feed is basically a file that lists all your products in rows with the columns being the different attributes, like description, name, price etc.
It is important that the following are always present, but the more information included the better and the affiliate network you’ve decided to work with can navigate you through what information is more important than others.
Must-have:
- ID
- Name
- Description
- Price
- Image link
- Deep link
Nice-to-have
- Availability
- EAN/GTIN/MPN
- Sale price
- Shipping
- Brand
- Gender
- Product type
We are specialists in affiliate data feeds and read more about how we retrieve, optimize and integrate data feeds for advertisers.
Banners
Banners come in many shapes and sizes and consult with your affiliate network what they need.
It is always good to have a set of evergreen banners, meaning generic banners that work through all seasons in the most common sizes and formats.
Add peak season material when going into those times a year and make sure to also consult with top affiliates whether they are interested in custom material, if this is something you have the ressources available for. This can strengthen your relationship and fortify placements since not all offer this opportunity.
Do not underestimate the branding aspect of having affiliate banners on websites, because you really get bang for the buck. Given banners placements most often are paid by the view or click and with a CPA deal, you only pay for sales, but get all the branding value on top for free!
Banners are either static PNG, JPG or moving GIF or HTML5 banners. Some networks accept other formats too.
How to manage affiliates
So learning about affiliate marketing, how to manage affiliates is the big question. To make sure you do it properly these are the steps to have in order, so the frame of collaborating is set and affiliates add value to the strategy your business has set to achieve targets.
1. Define your strategy
Which affiliates do you want to work with? This is defined by the industry you work with and the country you ship or offer your services to.
To reach success it is important to try out as much as possible to find where affiliate marketing adds value to your business, but also restricted to just the types that don’t overrule your current activies.
If you are in doubt about what the different types can offer, then in the next section you can read more about them individually.
2. Choose your affiliate network
Unless you’re a very large advertiser that can offer your own affiliate program and tracking, the most common method is by signing a contract with the affiliate network that is active and supports your country and industry.
There are countless options and in most cases we recommend signing up to just 1-2 that cover the markets you are interested in or overlap slightly.
Be aware that the commission and fee model for each vary and also the terms are usually stricter the bigger network you choose, so that you do not commit to a network that maybe ties you down for years.
It is important to keep it flexible, so you can switch if the network does not live up to your expectations.
3. Tracking, commission and material
Ready to launch you need to determine commission and provide all the material needed for your affiliates to start promoting.
Implementing the right tracking is crucial and read more about it in the tracking section above.
Finding the right commission read more about that under the section on calculating the affiliate EPC to find the right balance between paying affiliates properly to keep your program attractive and still keeping a profit.
Materials you need to provide them information about your business, data feed and banners, widgets etc.
4. Launching your program
The first 3 months invest a lot in promoting your program, creating hype and getting on calls with publishers.
Make sure all incentives are used in terms of higher commission, material, emails etc. Because this will help attract and test out new collaborations trying out your program.
Some businesses are very season driven, so make sure you launch your program well in advance to get most out of it.
5. Managing affiliates
After the first months has passed, usually a clear picture shows which affiliates are the traffic and revenue drivers for your business.
Make sure to maximize these by being in close communication and offer incentives to do as much as possible with them.
If your program benefits from adding more of the same, then investigate and recruit more to work with you of the same type.
You manage your affiliates by keeping a close contact and making sure they have all they need to continue promoting with you. If you succeed to do so, they will be a steady profit driver with minimal effort going forward.
Types of affiliates
The biggest advantage of working with affiliate marketing is that it serves as being omni-channel, meaning that it covers multiple if not all marketing disciplines. Making it great to compliment or be in charge of the areas you currently aren’t covering.
It can be a bit overwhelming with the many types and how they can give value, but think of the AIDA model and traffic coming in different places in the conversion funnel. You can use affiliates to supplement the areas you might be missing to either generate more demand or improving the ways of capturing it.
To visualize this, then see below how a rough breakdown of the main area that the affiliate types fit in the funnel. Of course some can cover more, depending on their scope, but this give a good idea on what affiliates you are after wether your goal is to generate or capture demand.
Content site affiliates
Content site affiliates are the most popular for advertisers to get promoting, but requires a strong business offering from the advertiser, but once you have good sites writing great content about your products or services it generates steady and high converting traffic.
Content sites are websites that create content ranking usually for organic search on Google and the articles they write recommend, review or in any other way include the products or services from advertisers.
Influencers
Influencers we all have heard of and probably already tried out promoting with to some extent. Influencers are people that has generated an audience followed through either social media or blog.
Working on a fully commission basis with influencers is usually hard, because they need more certainty to the deal than just being paid commission. That is why in most cases they are paid with a mix of commission and fixed fee.
Make sure that there is a true match between your product or service and the influencers in your scope to have the best effect.
CSS/Google Shopping affiliates
Emerging from the decision by the European Commission to limit Googles monopoly on Shopping ad results, the opportunity to create a CSS and running Google Shopping ads, which does not compete with an advertisers own Google Shopping ads has been a steadily growing area within affiliate marketing.
Read more about how it does not compete in Googles own article on the subject here.
These affiliate just need your product feed and will promote your business in the shopping results. Often they supplement current activities or excel if the advertiser is not strong currently in that area, which leads to increased business and marketshare.
Deal sites affiliates
Deal sites pick up the best deals from advertisers and promote them in their push channels. Which could be social media, website, newsletter, app etc.
These sites are ideal to generate demand and interest in a brand that has great deals already and if the deal site is happy with the commission received a strong collaboration with deal sites can be achieved following a lot of sales.
Cashback affiliates
Cashback sites are very common and big within the affiliate industry. In essence these are loyalty sites, that have a member only area and those members when purchasing online can get a percentage off a sale which is then paid back to the customer in cash, points, discounts or other ways that is attractive to the user group.
The cashback site business model is to use the commission offered from the advertiser, take a small cut and then pay back that amount to the customer via their own platform.
Voucher code affiliates
Probably the oldest type of affiliate and voucher sites pick up on voucher codes offered by advertisers and use their reach to offer the codes to potential customers.
With clear strategy they work well closing more sales in the bottom of the funnel.
Retargeting affiliates
Via implementing tracking on your website, they retarget your customers to close more sales. If you do not already promote to customers who visited your site already, then this is a strong and easy area to grow your revenue from customers already interested.
Maybe the timing or offer was not right at the time they visited your site and these affiliates makes sure to make to promote your products or service, so make sure they reconsider.
Native ads affiliates
Few companies work with native ads and this is a very popular area for affiliates to take over as it generates reach and sales in areas they usually are not active in.
Commonly native ads need images, ad texts and landing pages and will use their knowledge to promote you via adnetworks like Taboola, Outbrain etc.
Facebooks ads affiliates
Can be a great way to generate demand or retarget visitors if you are not already very active with facebook ads. It often requires a quite close collaboration having such collaboration, but is very scalable if it works out.
Google ads affiliates
Are you not already very active with Google ads and focus time elsewhere, then have affiliates take over all disciplines within Google ads, including display, search, shopping etc.
Display/Media buy affiliates
These affiliate are great at generating demand and buy traffic via different networks and sends them to your site. Have a close collaboration with them in order to supply them with the material they need and tailor the offers they promote to increase conversion rates.
On-site optimization affiliates
As mentioned, then the greatest traffic will not work if the website does not capture and convert the customer well.
This is why on-site optimization affiliates can be a good idea to close more sales from the traffic already received.
They offer multiple solutions, but most commonly have a script on your site that triggers pop-ups, gamification or other activities that engage the user in order to close more sales.
Still in doubt?
This is all you need to know when starting affiliate program management, of course affiliate marketing has many layers and can be very complicated, but with above in mind, you are off to a good start!
You are always welcome to reach out to us if you have questions or there is anything we can help with.
Nordpar affiliate program management specializes in scaling international brands with affiliate marketing tools. Our specialty is affiliate marketing and it is all we do. Rest assured that through our tools for automation and in-house experts we can take brands to the next level with affiliate marketing.