The 7 Mistakes Brands Make in Affiliate Programs
If…
Forbes is an American business magazine…[that] features articles on finance, industry, investing, and marketing topics… (source: Wikipedia)
Then…
Why am I seeing this listicle for dad gifts on Forbes?
I remember when I first realized that ecommerce didn’t need the e anymore.
Originally, the e in ecommerce was used to separate retail markets from the online markets. But now companies transact both online, offline, in-line, and out of line.
It doesn’t matter where transactions take place. It’s just business.
A few years ago I was on the phone with an affiliate expert talking with him to see if an affiliate program was a good idea for a company I was working with. From what little I knew at the time, affiliates were customers or influencers who earn a little commish for sending traffic your way.
Like having an army of salespeople. Sounded rad!
But…
He told me about Amazon and Big Mag. Amazon was getting a massive amount of sales through referrals from affiliates. Big magazines no longer survived off ads like they used to. Now affiliate revenue is a big part of their business model.
Then it all started to come together. Marketers were already talking about ad fatigue. Customer experience banner blindness almost always… or were just so tired of it all so they downloaded ad-blockers.
Those display ads just didn’t work anymore (excluding social ads, that’s different). Search ads were Ok, but people were used to that too, so they would scroll down to the “organic” articles for legitimate information.
Those articles may have rankes organically, but the content is more GMO than not. Listicles and advertorials were just another form of advertising.
The Trojan Horses of ads.
Let’s see how it works…
Google “best gifts for him” real quick…or not… this is faster:
We got GQ, Esquire, Good Housekeeping, and Town & Country… and many more.
These are some major players. Major SEO juice. Major ad budgets. All gobbling up the traffic from extremely common keywords people have around the holidays, anniversaries, and birthdays.
And all 65 gifts “that’ll impress any guy” will have an affiliate link to a brand website or marketplace who will pay out a commission to the magazine.
It’s just business, I get that.
But how can we mere marketing mortals compete with them?
If You Can’t Beat ‘Em…
So that conversation happened in 2018, and I was probably already behind then, but over the last 4 years the lines between media and retail are even more blurred. Commerce is happening in all the nooks and crannies both on and offline.
Affiliate marketing has also come a long way, and even though we cannot outrank GQ’s 39 Best Gifts for Men in 2022, we can be one of those 39 best gifts in GQ.
A while when I was working with a fitness brand, we got this ↓ into a listicle in a major magazine. This one affiliate placement drove well over 100k in revenue.
People nowadays are privy to the fact that these are a little more GMO than organic recommendations. But if the magazine is reputable, they do actual vet the companies they promote. So in the end it is a win-win-win for everyone involved.
Large media publications are just one type of affiliate. Social media influencers, loyal customers, niche blogs, anyone with an audience can be a good affiliate.
So don’t let my rant limit your thinking in terms of how to leverage this type of marketing.
It’s important to know all the tools available and understanding how they work in your favor. That is how you keep that competitive edge.
Let’s look into getting one set up…
Start an Affiliate Program.
There are a number of affiliate networks that are popular for ecommerce. CJ. Impact. Rakuten. Typically, these have software for tracking and payouts, as well as a large pool of potential partners (such as GQ and your favorite social influencer). Each come with their own pros and cons, but you will always be one that fit your needs.
There is also the do-it-yourself route for the budget conscious marketer. You have apps like GoAffPro or UpPromote to help with tracking. It is more difficult and time consuming, but if you don’t want to pay a few thousands bucks to get setup on one of the bigger networks, this is an option.
Sometime being scrappy is the way to start out.
I won’t get into the details of starting one in this article. It is fairly straightforward once you start digging around into the networks and apps available.
What I want to introduce here is probably the best overview you can find online for understanding affiliate marketing and how to do it successfully.
And that is thanks to Paul Drecksler. He is a master of affiliate marketing and came on the podcast to share tonnes* of information about how to manage an affiliate program and do it right.
*UK spelling for emphasis
This is a 40-Min Master Class. Here is the outline:
7 Mistakes Brands Make With Their Affiliate Programs
Having a Wrong Mindset
WRONG: Many companies look at it as another channel that they can turn on and calculate ROI, like Google or Facebook ads. They go into it with the mindset of, "How can I create an affiliate program that'll make my business as much money as possible? How do I structure my incentives and compensation to offer the best ROI?" This is the wrong mindset because it leads to asking questions and making decisions that ultimately cause the program to fail.
RIGHT: The right mindset to have, if companies actually want to build a successful affiliate program, is, "How do I create an affiliate program that'll make my affiliates as much money as possible? How do I make my affiliates as successful as possible with our program? How can I structure my compensation package and provide resources, tools and training, and collaborate with my other forms of marketing to best support and create the most success for our partners with my affiliate program?"
Do this, and the money will follow.
Competing against your affiliates
Example, offering better discounts on your website or through other public marketing channels than what you offer your affiliates, overriding affiliate cookies in your newsletters or social media posts.
If affiliates don't make money, they won't be affiliates for very long.
Speaking the wrong language at outreach
Many companies speak to affiliates during outreach using terms like "earn extra cash". This isn't a hobby. This is our business. Speak our language. Demonstrate your ability to close the sale by providing metrics.
Companies that hide metrics means they have bad metrics.
Thinking that the handoff is finished when the visitor clicks to your website
Some products have longer educational cycles and require multiple touch points from the affiliate prior to the conversion. Add congruency to the handoff. Examples: affiliate branded landing pages with recommended products, dynamically displayed branded discount codes, affiliate photos / testimonials on the site
A brand’s website needs to continue the affiliate's convo, not start a new one.
Not training your affiliates on the best way to sell your product
Alternatively not learning from your best affiliates. Sometimes they're better at selling your product than you. --Ten one-on-one convos with affiliates creating custom campaigns will be more valuable than 100 auto e-mails with banners and text links
Not setting realistic expectations.
Same side of the coin as training. If affiliate makes one post and makes no sales, they won't post again. If brand sets expectation from the beginning that the most successful affiliates create brand awareness through multiple touch points (ie: 4 posts in one month, 2 stories, link in bio, landing page on affiliate website prior to handoff), they will set the affiliate up for success. --Setting commission tiers too high for unobtainable results. It's smart to incentivize your best affiliates with higher commissions or bonuses, but if the only way to make good money is through the higher tiers, then your new affiliates won't have incentive to get rolling.
Program must be highly profitable for them from the very beginning.
Contracts and brand guidelines
In order to have a successful affiliate program, the program needs organization and structure. Contracts need to be clear so the affiliate knows what they can, and more importantly, cannot do. Example, can they post on Reddit, or run Google Ads with your trademarked brand name. Don’t let just anyone do anything. Make it clear from the beginning so there are no hiccups later.
No accounting for The Perfect Storm that kills profits
The Perfect Storm happens when there are big sales or holidays. You already are paying a percentage to your affiliates, and then you add a sitewide discount, and maybe free shipping during that period. You might lose money on each sale once it all piles up.
Do the math that accounts for all promos, discounts, and commissions.
Not promoting your affiliates
Running an affiliate program is a two way street. Help boost your affiliate's content and online presence. If they're actually a good fit for your program, then they offer content that your customers would enjoy, so promote them and everyone wins.
Everyone wins.
This is just an outline of what we cover in our conversation. I highly recommend listening if you are getting into affiliate marketing. He gives real-world examples that are not in this outline.
There is a lot of opportunity in affiliate marketing. Not only what we currently think about as “affiliate marketing,” but in the sense that brand collaborations and partnerships are going to be more common and more beneficial in the future. Near future.
Like 2023 future.
The lines between brands and customers will blur, just as they did between media and advertisers.
Right now we have straightforward link-tracking and standard commissions, but as things in commerce progress, as they are wont to do, having the right mindset is important to start.
Paul wraps this sentiment up perfectly by stating that our jobs are to make partners more money and revenue will always be there.
But beware the pitfalls.
As a brand, you have to protect the soul of your brand. Not earn revenue at the cost of it.
If you know the core elements that give your brand staying power, then being open to new types of collaborations and partnerships can be effing awesome.
On the flip side. If you start chasing revenue where ever you can, you become a Forbes… featuring articles on finance, industry, investing, or gift ideas for who tf knows...