Named a PerformanceIN Top 50 Industry Player for two years, Stephanie Harris is a 16-year industry veteran and owner/CEO of PartnerCentric.
Affiliate marketing can be a great tool for business growth. It can help you gain new customers, drive more sales, create awareness for your business and generate traffic and word of mouth.
Like any business strategy, there are certain tactics you can implement to succeed in affiliate marketing. And, as I’ve learned in my 16 years working in affiliate marketing, there also are pitfalls that could potentially impact your ROI.
Keep in mind that no strategy is static. The world is constantly changing, and affiliate marketing is a fluid channel for reaching customers. Today’s affiliate marketing programs have to be approached differently, given the vastly changed economic climate. COVID-19 has been a game-changer, and we can no longer count on historical trends like seasonality, traditional customer needs or timing for key events (for example, this year’s Amazon Prime Day has been delayed) to forecast results. This can affect inventory levels, online fraud, content strategy — particularly among influencers — and, most of all, your strategic game plan for a successful affiliate marketing program.
Before embarking on any program, the first step is to build a foundation. Organize your data so you can interpret your results. Plot the variables to track in advance; this makes it easier to build a dashboard to measure them. Also, consider the value of each affiliate and their promotional methods. That way, you can commission appropriately, taking into consideration your internal margins and new customer lifetime value (LTV).
While the pandemic has changed affiliate marketing, it also has created opportunities. I believe now is the time to experiment and try to work with bigger publishers. Many publishers have likely taken hits in revenue from Amazon, Walmart and other retailers that have been cutting their commissions rates or suspending their programs.
Here are additional insider tips for building a stronger affiliate marketing program.
- Avoid Ad Fraud
All online traffic isn’t equal. The digital advertising industry defines ad fraud as false impressions on traffic, clicks and leads. It gives the illusion of high-value traffic from consumers interested in your product, but ad fraud activities are generated by bots, data centers and other illegitimate sources. Victims of ad fraud waste valuable advertising dollars due to inaccurate data that gives a false picture of activity. According to industry research, North American advertisers lost $44 million in ad spending in 2018 due to fraudulent traffic — and that number is expected to increase to $100 million by 2023.
Affiliate marketing is a high-ROI channel with many benefits for brands, but bad actors can attempt to take advantage, so having a mitigation strategy is key. If something seems off (e.g., high reversal rates, metrics that don’t align with industry norms, unknown traffic sources) with one of your publisher’s results, ask them how they generate their traffic and the source. Even after they share their traffic source, maintain a healthy skepticism. If they point to thousands of clicks and hundreds of sales from a low-traffic blog with minimal content, it’s possible their traffic is actually coming from another source. Most affiliate networks and tracking platforms offer support to advertisers in addressing ad fraud. If a publisher’s traffic seems suspect, leverage your platform’s resources to investigate.
- Stay In The Top Three On Industry Review And Ranking Sites
According to my company’s research, those in the top three spots on ranking and review sites get 90% of the traffic from those sites. If you’re in the fourth position or lower, you’re likely not getting a strong ROI due to significantly less traffic and visibility.
Make sure you’re checking the sites you’re investing in to see where your level of investment leaves you in the rankings. A lower ranking means you may want to increase your investment. At the same time, track your return so you know whether it even makes sense to keep investing in that particular publisher. If you’re keeping track and checking your results regularly, you can adjust quickly and avoid wasting your marketing dollars.
- Keep Track Of Competitors
When tracking your positions and placement locations on sites, pay attention to how they relate to those of your competitors. Publishers in certain categories will naturally optimize their own revenue, which can indicate which competitors are getting top focus from those publishers due to a blend of payouts and conversion rates. If you see a certain competitor increasing their share of voice within a vertical of publishers, you can understand where their focus lies.
Knowing how competitors are investing in a particular channel gives you a huge advantage. It can assist you in planning your marketing spending and achieving faster and better ROI. You can even plan your strategies around your competitors’. If you know when a competitor will be doing a big promotion, you can take advantage of putting out an even larger one or decide on a different day to get maximum impact.
Tracking where your competitors are spending their budget clues you into their strategy, allowing you to find “blue ocean” opportunities and take advantage of inventory they are not focusing on. Conversely, you may even be able to reverse engineer their seasonal promotional calendar to better compete against them.
- Understand Your Attribution Systems And Gaps
Look at the true contributions and value of your affiliates (check out what your internal analytics are telling you), and compare them to what you’re paying through the traditional networks and platforms. Understand which affiliates are providing the right value so you only pay out on actions you have deemed successful in helping you reach your larger goals. Align these two figures so you’re paying on the exact value you’re seeing in your internal reporting.
No strategy fits every situation perfectly. If you plan ahead, lay out a road map that fits your goals, study your competition and be aware of what’s driving your traffic, you’ll be on the path toward affiliate marketing success.