Affiliate Marketing: Step by Step Overview
Affiliate marketing has been around for years and has been evolving more rapidly than many other areas of advertising. Affiliate programs run the gamut from niche based boutique programs to massive programs going after as many people as possible. The answer is that there is no one answer and each company and brand will have their own needs and solutions. Just as the answer to the question asking the panelists to rank the solution providers was unanswerable, each of the three panelists had very different programs and philosophies. But, even with an industry that is mature, there are still some who are making mistakes, including some of the panelists.
The three panelists have varying experience and perspectives. Shawn Collins of Shawn Collins Consulting has the most experience and is now an independent program manager working with five merchants. Carolyn Tang is the manager for Orbitz and CheapTickets, inheriting a program with 150,000 affiliates - unfortunately only 2,000 of them are active. Then there was Ryan Erwin from Oakley, a company that has serious brand issues and is very discerning with any partnership they make - affiliate or otherwise. Oakley is a latecomer to this area, starting their program just last fall.
One of the new trends in Affiliate marketing is the “lean and mean” program where the manager is very selective in who they accept into the program. The advantage of this is that the program is easier to manage and you can more easily track affiliates and there is less risk of having rogue affiliates cause problems. The problem I see is that these programs are self limiting.
Oakley has 200 affiliates and they think this is a good number. They don’t want thousands of affiliates because it could be too much work to police and train. If they do not want to have more affiliates, how can they grow their program and increase sales? You can’t expect affiliates to grow sales by themselves and have a program that can continue to be supported by management. If 200 affiliates can produce a good program that accounts for about 50% of the online sales, then why not look for the next 200 affiliates? Why not come up with a plan on how you can manage 2,000 affiliates? Unless your niche is so small that you can’t find that many quality sites, then you should be able to find thousands of great affiliates for any program.
Another issue with the Oakley program is their choice of service provider. Exclusive programs have their place, but why pay 30% for the “network” CJ offers if you don’t even want 99.9% of the people there? Oakley would be better served with an in-house or third party program that does not charge a premium for their Network. CJ is a great choice for mass market merchants and those who want to get a lot of affiliates quickly. Since this is the opposite of their desires, the choice seems odd.
While Oakley is very stringent, approving only 7% of applicants, they do agree with the others that the best affiliates are those who provide great content. Original content was one theme mentioned by each of the panelists when describing a top affiliate.
Trademark bidding was one place where the panelists did not agree. Shawn Collins prohibits all bidding on trademarked terms, Orbitz allows limited bidding, and Oakley lets affiliates “bottom feed” on terms. Orbitz allows certain terms that they do not have experience in, such as their recent foray into bookings from Mexico and their lack of experience bidding on Spanish Language terms.
Each panelist had valid reason why they use outsourced or in-house managers, but I felt that Carolyn’s reasoning for having the manager be an employee showed a full understanding of the issue. She commented that by being in the same office every day the affiliate program is better integrated with the rest of the company. The side benefit is that she has also been immersed in the travel industry and has gained insights that she would not be possible if the program was outsourced to a solution provider or outside manager.
What does the panel see for the future? Shawn Collins sees a new frontier in RSS, with affiliates using it to place targeted ads into their site. Carolyn Tang sees a bright future in affiliates using other channels such as phones or WiFi. And Ryan Erwin sees affiliates producing meaningful content.
Audience questions lasted quite a while - longer than any other session I attended - and they were generally probing. The audience was most interested in the pros and cons of using a networked provider (the answer is that it depends), multiple providers (they can be a pain because you have to remove duplicate orders), and keyword bidding.
