By Adam Ward

The term “affiliate marketing” conjures up a lot of images for different people. To some, it conjures up a work-from-home-in-your-undies picture. To others, it is synonymous with online fraud. Even to those who know it is used by legitimate businesses to make legitimate sales, they often think it somehow doesn’t have to follow the same discipline as traditional marketing.

Affiliate marketing is, after all, marketing. It is just a different flavor, just like TV ads and print ads are different flavors of advertising. Sure, one may use a different medium, and have different terminology, but both try to build brands and drive sales.

Sales don’t just happen. Businesses spend a lot of time and money figuring out who their customers are, how to most efficiently convince those customers they should be buying their products, and what the proper triggers are that will get them to actually buy. They then develop well-trained sales teams to implement their proven sales strategies.

So it strikes me as more than a little reckless when these same companies, thinking that an affiliate program can increase their online sales, decide to dabble in affiliate marketing without giving it the same consideration as their other marketing efforts. They might think that because they only pay when they see results, there is little harm if nothing comes of their testing the waters.

However, there is always a cost. Advertisers have to hire an affiliate manager to run their programs, re-task an existing employee to do it, or hire an outsourced program manager to run it for them. They need to buy tracking software, develop it in-house, or join an affiliate network. None of those options is cheap.

Based on the number of new advertisers joining networks (AffiliateTip reported that LinkShare has added nearly 200 advertisers so far this year), we’re going to see more and more advertisers jumping into affiliate marketing. So for those advertisers, here’s some advice: treat your affiliate marketing efforts the same as your other marketing efforts.

1. Do your research. If you already know who your customers are, figure out where they are online. Just like you would be more likely to place print ads in magazines that cover your desired demographic, there will be some websites that are frequented by more of your customers than other sites. Do those sites run affiliate ads on their sites? If so, what networks do they belong to?
2. If you don’t already know, figure out your margins. Online publishers (your affiliates), will not only want to run your ads if they think they’ll see a high conversion rate, but also if they think you’re generous in your commissions. Since you can’t be profitable paying more commissions than you can afford, figure out how much you can pay before you start your affiliate program.
3. If your competitors are running affiliate programs, figure out what they are paying in commissions. Can you beat that? Are there websites running your competitors’ ads? If so, those websites might be more eager to run your ads than if you’re pushing an untested program.
4. Be prepared to treat your affiliates well. You can think of them as special customers, crucial business partners, indispensible distributors, or whatever. But the fact is they will be pushing sales your way. They may even pay money out of their own pockets to drive traffic on behalf of your program. If you communicate well with them, are open and honest in your dealings, and take care of them, they will want to work with you, even if you may not pay as much as others. Remember that they have limited ad space on their sites, and possibly hundreds of advertisers wanting their ads in that space.
5. Transfer the best practices you’ve established in your offline marketing to your online marketing efforts. Give your affiliate marketing team the tools they need to be successful in their jobs.

Although there is certainly a learning curve with affiliate marketing, if you view it as a legitimate source for new revenue, you’re much more likely to be satisfied with your results than if you just jump in to test the water.

Tags: Affiliate Marketing, Best Practices

This entry was posted on Monday, July 26th, 2010 at 4:22 pm and is filed under For Advertisers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.