Affiliate marketing is a strategy that’s growing in popularity with a range of marketers. When a business has negotiated a good commission contract with its affiliates, it can provide a good return for both parties. However, if the terms aren’t as expected or the affiliate doesn’t meet the business’s requirements, the strategy may not deliver its return on investment.
However long you’ve been working on or using an affiliate marketing strategy, it’s likely it will need optimising at some point. This article will give some steps you can take to continue getting the best results on your affiliate activity.
How effective is affiliate marketing?
Interest in affiliate marketing has increased over the last few years. With the growing number of influencers and experts using their platforms to promote products and services, there are more affiliates out there looking for brands to partner with and vice versa. Indeed, these sorts of partnerships are now used by 81% of brands.
Not only that, but it works for lots of businesses. In the US, affiliate marketing is now matching email in terms of the amount of eCommerce orders it drives. Alongside e-marketing, social commerce and display advertising, affiliate marketers are one of the biggest total sources, with 16% of purchases being driven via these partnerships.
Though there are many potential benefits to working with affiliates, having an effective strategy will help businesses avoid any pitfalls. This may include becoming a victim of fraud or theft and a loss of control over the content created by an affiliate.
How does affiliate marketing work?
One of the advantages of affiliate marketing is that there’s lots of flexibility in the approach that can be taken. From the types of affiliates you use to the way they promote a brand’s products or services and their method of compensation. A standard affiliate marketing process works as follows:
- Brands search for appropriate affiliates to partner with, these may be individual creators, influencers or another company
- A contract agreement is made between the brand and the affiliate to set out the types of content that will be created, how sales will be tracked and the terms of payment for the affiliate
- An affiliate will then start to create and share content about the brand’s services or products
- Any conversions driven by the affiliate’s activities will be tracked using specific links, tags or pixels
- The affiliate will then be reimbursed or given a commission for every conversion they influence
Depending on the terms of the agreement, this process will then be repeated with other content, products and services. However, there are some key elements which adjust this process to specific requirements:
- Affiliate networks: platforms that match brands to affiliates based on their industry, expertise and requirements, meaning businesses don’t have to search themselves
- Direct affiliates: affiliates which have been contacted by a brand directly to form a partnership
- Unattached affiliates: affiliates with no direct connection to the products or services they’re selling, they aren’t experts in related fields and can’t make recommendations or give advice on usage
- Related affiliates: though they still can’t give advice on usage, related affiliates do have expertise or knowledge linked to the products or services they’re promoting, meaning they’re trusted as a source of information
- Involved affiliates: individuals who have used the products or services they’re promoting, meaning they can share recommendations based on this experience, this directly ties an affiliate’s reputation to the advice they give
- Cost per action (CPA): when a commission fee is paid to an affiliate every time a prospect completes a defined ‘action’ (such as a content download, link click or form completion) as a result of their activity
- Cost per sale (CPS): when a commission fee is paid to an affiliate every time a prospect converts as a result of their activity
By understanding the exact methods and terms and conditions of affiliate marketing agreements, brands can know how to adjust their strategy for better results.
Improving your affiliate marketing strategy
Taking the following steps will help you develop a strategy that will give you the best return on any commission you’re paying to affiliates.
Set goals and KPIs
Before you even think of reaching out to relevant affiliates, it’s essential that you have an idea of what you want to achieve with your affiliate marketing strategy. If you’ve already started working with affiliates but haven’t set out specific objectives, then defining these will help you maximise the value of the agreements you have in place.
Some goals or metrics you might want to use for your affiliate marketing strategy include:
- Increasing awareness of your brand with higher reach and impressions
- Driving a specific number of clicks on a trackable link to a product page
- Nurturing more prospects by driving them to download your content
- Achieving a certain return on investment for every £1 you pay an affiliate
- Growing the number of conversions by a set amount for a specific product or service
The particular objectives you choose will depend on your needs and where affiliate marketing fits within your wider strategy. Setting these will help you pick the right affiliates, put the most appropriate terms in your partnership agreement and understand which performance metrics you should track.
Find the right affiliates
Key to a successful affiliate marketing strategy is choosing the most appropriate partners for your brand and requirements. Depending on your objectives, you might want to find an affiliate who’s an expert in a particular niche, has influence on specific social media platforms or can tap into audiences with certain target demographics.
There are two main ways to find affiliates, doing it manually through your own research and outreach or via a network. Though the former approach takes more time and effort, it does give you more control over the type of affiliates you reach out to. In contrast, using a network means you can access and reach out to more affiliates more easily.
Whichever method you use, performing due diligence research on any individual will give you the confidence that they’ll enhance rather than damage your brand.
Establish terms and conditions
Before making any content or adverts with your affiliate, you need to put a contract that sets out the terms of your partnership in place. Key elements that need to be included in this agreement are:
- What the affiliate’s commission fee will be
- When an affiliate’s commission fee will be paid e.g. per conversion or action
- How the affiliate’s activities will be tracked e.g. via pixel or tag
- The type of content an affiliate is expected to deliver
- Limits and guidelines on what the affiliate can or cannot say in their content
- Steps to be taken in the case of suspected fraud or inaccurate reporting by an affiliate
Getting advice from an agency that’s experienced in dealing with affiliate contracts will set the terms of your partnership and help protect your brand and budget from any bad actors.
Track accurate results
As well as knowing what performance metrics you want to track, having the infrastructure in place to monitor them accurately is essential. Whether your affiliate is getting paid per conversion or action, having control over the measurement and tracking of these measures is key to ensuring you’re paying the correct commission.
Alongside establishing accurate tracking technology, having a thorough process for verifying any prospects that are converted or nurtured by affiliates will help you avoid becoming the victim of fraud. For example, you may need to requalify the contact details of any prospects who fill out a form as a result of affiliate activity.
Taking the time to think through the process carefully and getting expert advice on how to avoid unscrupulous activity will ensure your budget is being put to good use.
Review, refine and repeat
Once you’ve started running affiliate marketing campaigns, it’s important to run regular reports of this activity. Measuring the performance against your specific goals or KPIs will help you identify what content works, which affiliates are most effective and how you can adjust your strategy to maximise your budget.
Reviewing regularly and using this data to inform any future activity will help you refine your affiliate marketing strategy and leverage this tactic as effectively as possible.
Our expert team is experienced in delivering effective affiliate marketing strategies for a range of businesses. Get in touch to find out how we can help.
