Thanks again to our special webinar guest today, Shawn Collins. A 10 year veteran of affiliate marketing both on the affiliate manager side and the publisher side, Shawn shared his expertise on a number of topics.
If you missed today’s call, here’s a full recap. If you would rather, just watch the on-demand version of the affiliate marketing webinar.
Affiliate Marketing Players
Affiliates – Refers to content publishers who promote your products for a commission or other monetary incentive including bloggers, product review portals, ezine publishers (experts on a topic with loyal mailing list subscribers) or even social networking sites like Imeem or Last.fm.
Merchants – Retailers (products) or site owners (memberships) that pay a flat fee, per click or revenue share with affiliates for sales or leads.
Networks – Networks like Commission Junction and Linkshare provide a marketplace of affiliate programs where affiliates and sellers can connect.
Affiliate Marketing Managers: In House vs Outsourced
Your decision will depend on your budget and your needs. Seasoned, outsourced experts may cost you around $10,000 per month, but you tend to get what you pay for. Experts have more experience and connections. In-house experts are hard to find, and newbies require benefits, office space, training time and learning curve. But if you are a smaller retailer and you only have, say, 12 affiliates, you don’t need an expensive manager and can get a good deal (lower wage) inexperienced manager who can learn for free in forums and from blogs, and work on growing their experience while growing your affiliate base. It’s also nice to have someone in house to keep accountable versus the disconnect that can happen with outsourcing (time zone differences or your manager is running multiple client programs). So it’s a trade off.
How to Enable Affiliates to Sell More
You can’t just recruit new quality affiliates and then do nothing. Once you have them in the door you need to activate and engage affiliates. Personal welcome emails are good, phone calls and postal mail (100% open rate) are even better. This sets you apart from the competition and establishes a good relationship. You can also send samples of products to encourage reviews. Your affiliates will be more likely to promote you when you go this extra mile.
Don’t just give your affiliates banners, educate them. Create a sales kit with your company history, demographic information, popular products, tips on what makes your products great and examples of affiliates that perform well for you. Video content and product samples create even more enthusiasm.
How to Manage Brand Concerns
Manual application approval is important. Automated affiliate approval attracts fraudulent players and hurts you in the long run. There are dirty affiliates out there. If an affiliate applies with a free email account, that’s a red flag. You can also check Whois to make sure the domain belongs to the applicant (a bit harder with hosted blogs). Shawn refrained from sharing all his secrets so shady affiliates don’t figure out what he looks for. Another idea is to maintain a blacklist across affiliate programs once you spot bad affiliates.
You must also provide clear Terms and Conditions for your program. One concern is affiliates bidding on your brand names in AdWords, so an FAQ document that addresses “Can I Bid on Your Brand?” is a good idea. Some affiliates will bid on your trademark terms without checking your Terms and Conditions, or will just go ahead and do it anyway until they get caught. Some go so far as to daypart evenings and weekends or geotarget campaigns, excluding the zipcode of your head office – hoping you never check up on it. Even after a warning, they will continue to do it, hoping you won’t check twice. So monitoring your affiliate activity is essential.
You can monitor your accounts simply by running queries for your brand names in the search engines. OPMs (outsourced programs managers) can do this across many accounts, and they are more likely than a hired 9-5 employee to check different data centers and monitor evenings and weekends.
Include policies surrounding breach of Terms and Conditions. Shawn used to give 3 strikes, but now he gives just one warning, stating in his Terms and Conditions that after one warning, he has the right to terminate the relationship and the affiliate will forfeit pending commissions.
What about Pay Per Post?
Shawn believes these were built for corruption – he even stopped reading blogs that take paid reviews. In his opinion it’s an integrity issue. (I imagine that with an affiliate program you don’t need to buy reviews, your affiliates will do that for free in order to make referral commissions.)
Attracting Super Affiliates
The 80/20 Pareto principle can be more like 95/5 or 98/2 in affiliate marketing (98% of sales from 2% of your affiliates)- so super affiliates are huge. These folks get approached all the time, so sending an unsolicited email is not a great way to catch their attention. Let them find you. Go to the places they hang out – their forum or blog (or go to one of Shawn’s networking summits), and get a rapport going – then it’s much easier to approach and recruit. If you bring in the right super affiliate it can account for 90% of your business for a single month. Definitely worth it.
You should also appreciate that VIP super affiliates command higher payouts. If you pay 5% commission for ordinary affiliates, you should emphasize to super affiliates in your approach that you’ll pay them more because they’re more important to you. Build that into your affiliate program. Tiered payout structures are fine for regular Joes, but don’t make a super affiliate have to “prove it to you.”
This time of year, show love by sending a gift basket or something to show you value your affiliate as a partner and you’ll do a good job at keeping affiliates happy.
How Do You Find Super Affiliates?
Networks determine who is a super performing affiliate. Commission Junction has a public 5 star system based on volume and earnings per click (EPC) called the “Commission Junction Performers” program.
If you find a hobbyist or owner of a thriving niche community who is not an affiliate for anybody, definitely approach them. Early on nobody heard of affiliate marketing but now people are more familiar with the concept so you don’t have to explain yourself, so it’s easier now than in the past.
Many merchants limit their affiliate programs to the US while there are many quality affiliates with high US traffic that could drive a lot of sales. Shawn has had bad experiences with Asia, Eastern Europe and Africa, with about 70% turning out to be scammers, so he prefers to stick with US, UK, Canada and Australia. But if someone wrote back to ask for reconsideration, Shawn has always had good luck with them.
How the Affiliate Game is Changing
Mobile phone marketing is going to “blow up.” With more qwerty keyboard phones, networks like Linkshare entering the mobile space and Google mobile Adsense there are a lot of opportunities here. AdMob.com publishes monthly stats (but forgive me, I can’t seem to find them.)
Video is another avenue to explore. Shawn runs a site called where you can even submit your products for review. Weviews has 1-2 minute videos which are uploaded to various video sites where affiliates can grab them to use on their sites. Video reviews are more personal, seeing a face builds trust and can really convert powerfully. And with Google Universal search which mixes images, video and news results in with webpages in search results, they’re great for pulling in search traffic, too.
Qoof.com is a service where customers (or affiliates) can create “Usermercials” and put their links in them. Webvideozone is another one to check out.
Chitika.com, Amazon and eBay are well-known for sidebar widgets that can be placed on affiliate blogs and serve up products within the window. In Shawn’s experience you need to build these yourself (well, most likely hire a programmer) because third party networks like Commission Junction aren’t offering these yet.
How do you deal with marketers who bid on your trademarks (or optimize for them) who not intending to sell your product (i.e. Google Adsense publishers)?
You can terminate them if they are your affiliate, otherwise first ask nicely. Failing that, you can take legal action with a cease-and-desist letter, which is costly and doesn’t necessarily solve the problem.
How can you find affiliates for non-retail products like B2B magazines?
You can find prospects through search engines – type in relevant keywords, approach these people and try to bring them on.
What are the pros and cons of smaller vs. larger networks?
Larger networks have a selling proposition that when you use them you have access to a larger pool of affiliates. But in Shawn’s experience the quality affiliates don’t join your program organically. Your affiliate manager should be doing active recruiting and not relying on network participation alone. To gain more exposure with the large network you may need to pay higher fees, so smaller companies with less programs to offer can be more cost effective.
How much time should you spend recruiting super affiliates who don’t have related sites?
Some might run PPC campaigns for you, some might do email campaigns (like story sellers or trusted ezine marketers) so you can target them even if they’re not doing related work.
How can affiliate managers protect themselves against scammers?
Local / federal spam laws can be severe – you have to be tight about what affiliates can do. Be on top of state laws and watch what affiliates are doing as much as you can. If you have too many affiliates to monitor, you should scale down the number of affiliates or scale up your staff.
Unsub Central is a great service for list cleaning. You and your affiliate partners can upload encrypted mailing lists and ensure that nobody receives an email that shouldn’t be on your list.
Is it more difficult for affiliates to scam you on straight commission models or should you move to PPC?
With revenue share is hard to scam you. Stolen credit cards are very risky for affiliates so that’s not much of a problem. But if you have a brick and mortar and online presence, they might buy online to earn their commission and return the item for a full refund in your physical store.
Click fraud is still a concern even with Google Adsense so it’s certainly a concern with other affiliate arrangements. Revenue share is still the safest.
What are typical costs per lead/sale and why should one get involved with affiliate marketing?
Affiliate marketing is a safe channel – you pay for performance. There are some fixed costs like modest fees (e.g. $100/month for tracking and reporting from networks) and then the rest is gravy. Average costs vary depending on industry and what your payout structure is like.
Looking for More?
He also runs several affiliate summit conferences, the next event is in Vegas February 24-26. There you can rub elbows with super affiliates, major affiliate networks and merchants which should make for some great networking. The keynote will be given by Jason Calacanis of Mahalo. If you can’t make it, there’s always Boston in August and New York in October – more info at AffiliateSummit.com.