2018 Ultimate Guide to Affiliate Definitions & Abbreviations

Looking into creating an affiliate program for your Technology or SaaS based company – but get bogged down with all the terminology when doing your research?

This post is meant to be used as a resource for understanding “lingo” commonly used in the affiliate marketing industry so you are not confused with reference terms.

Entities in Affiliate Marketing:

  • Merchant –¬†Is a company that offers a service or product (Can also be used interchangeably¬†with “Advertiser” in the context of having an affiliate program. More below).
  • Advertiser –¬†In an affiliate marketing relationship, the Advertiser is the entity that offers the product or service that the Affiliate/Publisher promotes to an audience.
  • Affiliate (partner)¬†– ¬†Is any person, company, or organization that promotes a Merchant’s/Advertiser’s products or services.
  • Publisher –¬†Another name for an affiliate or affiliate partner.
  • Network –¬†A third party platform used by Advertisers to run their affiliate program on. For the Advertiser’s benefit: A network handles payment of commissions and collection of tax forms, compliance and monitoring, and other services an Advertiser might not be equipped to handle. For the Publisher’s benefit: The Publisher can centralize all affiliate programs they are a part of under one area. The network acts as a middleman marketplace for the two entities.
  • Sub-Affiliate Network – A Network for which the network operator’s themselves, join affiliate programs as Publishers. They then recruit affiliates under their network to promote these products and services at a lower-than-offered commission rate (commission arbitrage).¬†For example, If I ran an affiliate network, I can join example.com’s affiliate program for which I would receive $100 for each customer I refer to them. I would then allow my sub affiliate’s to promote, and then I would pay them a $50 commission (netting $50).
  • Offer:¬†The actual product or service that is being promoted from the merchant on behalf of the affiliate.

Affiliate Program Building Block Terms:

  • Commission: The reward an affiliate/publisher receives for performing some action designated by the Merchant/Advertiser.
  • CPA (Cost-Per-Action): The basic commission structure of all affiliate programs;¬†Publisher performs this action, they receive this commission amount.¬†
    • CPS (Cost-Per Sale): Specified Commission for the action of referring a sale as an affiliate to a merchant/advertiser. For example: If I as an affiliate, refer 1 customer (make 1 referred sale) – I would receive $50. $50 is the CPS.
    • CPL (Cost-Per-Lead): Specified Commission for the action of referring a lead as an affiliate to a merchant/advertiser. A lead can be anything from submitting a web form, starting a chat, etc.
    • CPC (Cost-Per-Click):¬†Specified Commission for the action of clicking on a link from an affiliate to a merchant/advertiser’s website.¬†This is costly and often not used any affiliate programs anymore.¬†
    • CPM (Cost-Per-View or Pay-Per-View PPV):¬†Specified Commission for the action of viewing a webpage through a link to a merchant/advertiser’s website.¬†This is costly and often not used any affiliate programs anymore.¬†
    • Pay-Per-Call: Payment from Merchant to Affiliate for triggering a call to the merchant (other specifications to qualify such as call time, region, etc. can be qualifications¬†for the commission).¬†
    • Pop offers or traffic:¬†This refers to running ads on mobile apps and games where the affiliate can run a merchant’s ad and get paid a commission rate (there can be different types like Pop ups, Pop under and toolbars).
    • Redirect offers or traffic:¬†This refers to promoting a merchant or sending traffic through parked domains or redirect domains. For example, if someone owned a domain: fastfreeinternet.com and the affiliate is promoting a internet service provider, working with the owner of the domain (or part of a redirect network) could redirect that URL to the merchant’s affiliate link for a specific period of time.
  • Cookie Duration: Is the window of time provided by the merchant to the affiliate from when: a link is clicked by a prospective customer to when they buy the product or service. ¬†For example: A cookie duration of 60 days means: a prospective client ¬†has 60 days or less between the time they clicked an affiliate link to when they buy the product or services (to ensure it is attributed to that affiliate.
  • Tracking Pixel:¬†an image or javascript code placed on a merchant’s site to track clicks, impressions, sales/conversions, etc. (there are different kind of pixels to track different behaviors).

Affiliate promotional terms:

  • Banner: ¬†Usually a JPEG or a Gif (animated) file that affiliate’s place on their website or blog to display an advertisement of the merchant’s products or services.
  • Text link:¬†Html code that presents text with a hyperlink in it (usually an affiliate link).
  • Deep linking: When an affiliate links to another page on a merchant’s site, than what is provided in the default affiliate link. For example, if your default affiliate link is: example.com?affiliate=TOM and an affiliate wanted to link to a merchant’s pricing page – they could use a deep link like:¬†example.com/pricing?affiliate=TOM
  • Swipe files:¬†written content (such as blog posts or email copy) that are created by the merchant for the affiliate to use to market their products and services better.
  • cloaking links (redirects):¬†When an affiliate runs their assigned affiliate link or parameter through a redirected URL so that other affiliates or merchants don’t see their structured URL’s. Note: this is a best practice ¬†– and not seen as something an affiliates is doing to not allow you to see how they are promoting.¬†
  • Cobranded landing page –¬†A page provided by the merchant (on the merchant’s site) that has information about a specific affiliate/publisher so that the specific publisher can use it to promote sed merchant for better conversion rates.
  • Typosquatting –¬† a method used by some affiliates to take advantage of misspelled domain names (often redirected to an affiliate link) in efforts to direct visitors who have misspelled the domain when typing into the browser.¬†For example, someone might buy McDonlads.com to direct people who type this, through an affiliate link. This is forbidden in most affiliate program’s terms and conditions.¬†
  • Trademarking bidding –¬†The act of bidding on a companies registered trademarks within Pay Per Click Ad networks.¬†For example, an affiliate could bid on “Gap.com” in their PPC ads, and show their affiliate link vs. the companies ads. In a majority of affiliate programs, this is not allowed.¬†
  • Cookie Stuffing –¬†¬†Considered theft/stealing, is the act a publisher intently makes by stealing attribution of another channel or affiliate’s referred sales. For example, an affiliate might figure out (technically) how to find other affiliate’s promoting a product and prior to customer’s going to the merchant’s site – they remove or overwrite the other channel or affiliate’s cookie with their own.
  • Toolbar –¬†Is a addon or extension to a browser for some function to a user. For example, one toolbar might promise visitors who download it – “earn money searching the internet.” The toolbar publisher would then direct users to sites he is an affiliate for, and if those users take a specific action – then the toolbar publisher gets a commission.¬†Toolbars are often not allowed in a majority of affiliate programs.¬†
  • iframed sites –¬†is the act a publisher takes to create a version of a merchant’s site within an iframe (so it looks like the real site to the user).¬†This is often not allowed and strictly enforced in most affiliate programs.¬†

Common Metric and reporting Terms:

  • EPC (Earnings Per Click):¬†In an affiliate program, it’s the affiliate’s earnings divided by the affiliates clicks x 100. This is used by affiliates to understand their earning potential if they choose to promote a program.
  • AOV (Average order value):¬†It’s the total revenue divided by the total # of orders for a given period of time.
  • CR% (Conversion rate percentage):¬†It’s the total sales/orders divided by the traffic for a given period of time.
  • ROAS (Return on Ad Spend): Is Revenue/cost of promotions or ads.¬†¬†

Common Commission Junction abbreviation and definitions:

  • Transaction –¬†Is a a commission record found in your CJ reports.¬†¬†
  • CID # (Customer ID) –¬†Is a unique number given to each commission junction publisher record.
  • PID # (Publisher ID) ¬†–¬†Is a unique number given to each website under a publisher record in Commission Junction (often use to correlate a commission record with a specific website under a Publisher’s account).
  • AID # (Ad ID) – Is a unique number given to each Ad (banner, text link, etc.) within a Advertiser’s
  • SID # (Shopper ID) – is a unique, alphameric code that is appears on a transaction to identify specific shoppers or sources of where a commission/transaction took place.
  • Program Terms: Are the established terms and conditions between the merchant and publisher.
  • Application Rules:¬†Are the accept and decline criteria you can put in place to approve or decline new publishers into your affiliate program.
  • Flex ID:¬†The Flex ID sub-tab enables you to assign an ID of your choosing to a publisher CID. This advertiser-assigned ID can be passed to your site on the click, from the respective publisher.
  • Corrections: ¬† The act of merchant correcting (and sometimes declining) a commission because it was: returned, duplicate, referred by another affiliate.
  • Subscriptions: ¬†For merchants to send data to CJ (through Email, FTP, etc.) with a list of Order ID’s to correct.
  • Publisher Sign Up Form:¬†Link merchants can link to from your website to direct your visitors to become publishers on the CJ network.
  • Publisher Group: ¬†A feature for merchants/advertisers to group publisher’s in their affiliate program (to report on or use to email with Commission Junction).

If you’d like to see more affiliate marketing terms and abbreviations, check out the Earning Guys Article here.¬†

Are there terms that you have come across that you don’t know? Please comment below and I can answer and add them to the list!

How to Find Affiliates Breaking Your Terms & Conditions

If you had an affiliate program actively running for over 6 months, something you need to consider is how your affiliates are promoting you and if their promotions are violating your terms and conditions.

Why is this so important? Doesn’t verification of sales before commission payments are made, negate the need for upfront investigation? No – and here is why.

If an affiliate is promoting your brand and products/ services and is advertising wrong discounts, wrong information, etc. you’d agree that is not good right?

Or what if an affiliate is impersonating your brand with iframes of their site or by bidding on your trademark in Google — and driving customers that you’d already get if you were bidding on your own keywords. Not so hot, huh?

Therefore, to keep this in check we need to keep tabs on how affiliates are promoting that might not necessarily get caught and stopped through your sale verification process.

Finding Affiliates that are using faulty or large discounts to promote your products:

Most affiliates, at least in my experience, are making claims on large discounts for two main reasons:

  • They want to rank for: Your brand name + highest discount to piggyback organic traffic.
  • They just want to get the sale – even if it is misleading to the customer and maybe sneak one past the Affiliate Manager, it’s something they won’t have to deal with.

The best way to find this is the most obvious: Google. Look at the search results of various keyword combos like:

  • Brand name + discount code
  • Brand name + promo code
  • Brand name +¬†current year¬†code

There is another option that can be leveraged here as well that we discuss in the next section….

How To Find if Affiliates that might be advertising old, incorrect, or misleading product information.

While, some programs don’t require (via the affiliate Terms & Conditions) affiliates to be responsible for correct information about your product or service (which is a two sided street: you have to keep them updated on any changes)– it’s always important to keep abreast of bad or old information out there about you as a merchant.

The best way to do this is: constantly reviewing referring URL source information of traffic coming from your affiliates. 

Spending some time each week going through traffic from affiliate URL’s and reviewing the information presented on the page for which the affiliate is linking to you – is crucial. You then can reach out the the affiliate if they have wrong information, old screenshots, incorrect pricing, oversold info on products or service, etc.

How to find affiliates who are bidding on your Trademarks:

Unless you have a PPC team and/or actively running Google PPC campaigns for your trademarked keywords – you might not know this is happening.

To find out, my suggestion is:

  • Clear browser cache or open up an incognito window.
  • Search google for “brand name” and see if campaigns are running in the paid ad section that are not your own (do same for Yahoo!, Bing, Yandex and other search engines)

advanced tips:

  • some affiliates might run PPC ads at different times and advertising different geographies, that given your location and time – might not be able to see. You can use a browser extension like Tunnello as VPN to check from different localized search engines ¬†(.co.uk, .ca, .nz, etc.)
  • If you are running a large program, you can invest in continual monitoring and reports when new PPC bidders put up campaigns with your registered trademarks. A company I have used in the past to help with this is BrandVerity.

How to find iframes, toolbars, or anything else misleading:

These options are a little bit harder to spot  Рbut nonetheless, can be targeted given a few approaches.

With iframes and toolbars: using a combination of referring URL’s and an SEO tool like Ahrefs.com – can help you analyze the backlinks. For instance, with Ahrefs, you can search referring domains and select/Filter by redirect: this will basically show anyone (and their source referring url) that is cloaking and redirecting their affiliate link (which, if you’re new to cloaking doesn’t necessarily mean they are doing something bad at all. However, if someone is doing something bad this is often a method they will use to hide this. In other words, correlation doesn’t always mean causation).

To wrap up, this is by no means an exhaustive list of how to stop every trick in the book that affiliates may use to break your terms (nor does it assume that these are the only term breaking rules people often break). However, it is a good introduction to help you realize the importance and due diligence of monitoring this on regular basis.

Definition: Affiliate Marketer vs. Affiliate Marketing Manager

Semantics can be a tricky thing, especially when it comes to job titles. In one industry or company, a role might mean one thing, but in the context of another the responsibilities might be entirely different.

When talking to business owners (especially small to mid-sized companies) I sometimes see a disconnect between two different roles: The role of an Affiliate Marketer and the Role of an Affiliate Marketing Manager.

Many companies often think: I need someone to manage my affiliate program. Therefore, I need an affiliate marketer. If they are a good Affiliate Marketer, they must know how to manage an affiliate program. 

Now, this is not uncommon to find an Affiliate Marketer turned Affiliate Marketing Manager. However there are distinguishable responsibilities between the two. For example, not all car mechanics know how to run the shop, right?

So let’s look at what an Affiliate Marketer is or does:

Affiliate Marketer Roles & Definition: 

  • Expert Marketer; often can promote/market a product or service better than the merchant (or in different ways to show more than one value proposition).
  • Responsible for driving traffic to an offer/product/service; “packs the store” so to speak.
  • Can be a Teacher/Educator; shows how or why a product or service is used for a particular vertical or audience.
  • Often operates his/her own web properties that relay the traffic on to the merchant.
  • Usually (but not always) a customer of the product or service he/she is promoting.

Now let’s look at Affiliate Marketing Manager:

Affiliate Marketing Manager Roles & Definition: 

  • Opportunity seeker & affiliate program marketer; Finds the¬†right¬†affiliate partners that could be a good fit for the merchant.
  • Is a relationship builder; Works between merchant and Affiliate Marketers to find the best outcomes for both (more customers and products/service sold for the merchant and more $$ commissions for the Affiliate Marketer).
  • Logistical Operator; Is behind the scenes ensuring tracking/attribution is working, affiliates are getting paid on time, driving new affiliate promotional campaigns/contests etc.
  • Gatekeeper/Policing; ensuring affiliates that are not a good fit for the program don’t get in¬†as well as affiliates that might be breaking terms and conditions with how they are promoting.

An Affiliate Marketing Manager could be a good Affiliate Marketer and vice versa; no doubt, that could be a possibility. Nonetheless, there are defined roles and developing backgrounds of experience for each.

So the next time you are looking to hire or get involved with an Affiliate Marketer or Affiliate Marketing Manager – remember they are different!

 

Should I Auto-Approve Affiliates in my Affiliate Program?

Once you have an affiliate program up and running, many always wonder:

Do I need to approve these affiliates or can I just set to approve ALL affiliates?

It’s often a case where a merchant doesn’t have the time to approve publishers¬†but in other cases it is times when they don’t see the value of reviewing and approving affiliate applications.

So the answer is: It depends. 

Let’s take the case for each and warning signs you should consider for both:

Approving Affiliates One-by-One:

If you have the opportunity (and resources and time) to review affiliate applications prior to joining, then by all means, do so. Why? the benefits are bountiful:

  • You can request certain information and review areas of promotion prior to them being active in your program. This gives you the ability to catch any potential “bad apples.”
  • You get to know who is in your program and can reach out to them to forge better relationships.

But, I really want to preface that if you don’t have the framework or commitment for regularly approving affiliate applications it can be detrimental.¬†

When an affiliate signs up for your program, they have a direct intention or at least an idea to promote your product or service. If they are stuck in any sort of “pending” period for you to review your application for a significant¬†amount of time (and I would argue that that pending time is more than 24 hours), then they could lose interest or be frustrated that someone is holding up the process. ¬†Even worse, if you don’t offer a way for pending affiliates to reach out to their Affiliate Manager then it can harbor even more frustration.

Auto Approving Affiliates:

Many in the industry look down on auto-approval since they think it is a “lazy” way to run a program. However, if you are getting hundreds of applications each day or week and don’t have the adequate support to review them – auto approving is an option…with caution.

If you have proper tools in place to monitor term violations as well as any potentially fraudulent activity, auto-approving can be possible.

Also, you will want to make sure that your Terms and Conditions are firm so that if affiliates/publishers do something harmful it can easily be referenced in the document, and action can be taken.

 

Overall, it really comes down to preference and if you have the tools and preparation for auto-approving.

Still not sure on your specific situation for approving affiliates? Let’s do a call or email. See how.¬†

 

Why Can’t I Just Run my Affiliate Program on Auto-pilot?

UpFoundry_Autopilot

Many who start an affiliate program for the goal of growing their customer base or expanding their revenue channels have an assumption that: “once they set up the program, shouldn’t It be able to operate on it’s own?”

While you CAN do this, many in the affiliate marketing industry would strongly advise against it. Why? Below, I discuss the many oversights to running your affiliate program on auto-pilot.

No Crowd control.

UpFoundry_Autopilot proggram

Imagine you own a popular night club. You have hundreds waiting to get into your establishment each night- the line is practically out the door. Now say you decide to have your nightclub run on auto-pilot. You remove the staff, and ditch the security guards out front. What do you think will happen?

When you run your program on auto-pilot you fail to filter out:

  • affiliates who join your program that might not be a good fit for your brand and target market.
  • affiliates who engage in fraudulent behavior to win commissions.
  • affiliates who don’t read your affiliate terms and decide to use marketing channels that you clearly state not to use (PPC, Social, etc.).

No Activity Monitoring

Continuing with the bar example I mentioned above, now let’s zero in on people buying drinks at their own discretion. Since you have no staff, you require all customers to take a drink and deposit cash in the register – without any staff watching. What will you think will happen?

With affiliates, it can be quite the same. While you could argue – “well, we check before we pay them, that the sale they made was¬†legitimate. Isn’t that enough?”¬†

Unfortunately, No. If you awarded a golf player $100 for each time he made a hole in one, but you were not allowed or covered your eyes when he/she hit the ball – would that be enough information to pay them the $100 when you see the ball in the hole?¬†I don’t think so.¬†

When you run your program on auto-pilot you miss:

  • What content/banners/links affiliates are promoting and how they are promoting.
  • Where your affiliates are promoting to bring you sales.

No growth and relationship building.

It’s the classic notion in business: Doing the same things or nothing at all, and expecting better results.¬†When you run your program on auto-pilot you are aiming for the lowest common denominator: How can I get the most activity and sales, without the work?

When you run your program on auto-pilot you miss out on:

  • Building long-lasting relationships with affiliates that could truly propel your brand.
  • Understanding what successful¬†affiliates are doing that brings you sales.
  • Proactively finding new affiliates that could be strong advocates for your products or services.

Do you currently have an affiliate program that is on auto-pilot? What issues are you facing? I’d love to know either by email or the comments below.

Affiliate Commission Rates & Structure 101

In this article, I will walk you through all the different factors and considerations for setting a commission rate for your affiliates. Read from to top to bottom as it is important you follow the process in order.

So you have come to the point where you need to draft out how you are going to compensate your affiliates for referring customers your way. You have looked at your competitor’s affiliate programs and asked advice from others but your stuck with no clear path on what you should do.

My plan with this article is after you read you will be left with enough guidelines that creating your commission structure for your program will be a lot more approachable.

Enjoy….

Before you start: Fundamentals.

I highly advise that as you put together your commission structure you keep an important factor in mind: Cost.  Mainly, these two questions:

  • Margins: What are the margins on my products or services?
  • ¬†Budget: What is the budget I have set aside to pay affiliates?

Why are these important? Without knowing reasonable margins – how can you truly see how much you can afford to commission an affiliate per product or service? ¬†As for your budget: Your affiliate program shouldn’t be an after thought; it should have a line item on the accounting spreadsheet.

The LAST thing you want to have happen is see major success with your affiliates and then not be able to pay them.

Working with affiliates is all about trust so losing it by not coming through on your promise can be very detrimental. If you have to bug your CEO/CFO or fight your accounting department to work out a budget for the affiliate channel Рby all means do so. It will save you trouble later on.

What you want out of your commission structure: 

Now that you have a strong understanding of your cost – let’s look at what you really want out of your commission structure. Your commission structure should be:

  • Simple: Affiliates signing up for your program need to be able to decipher how much money they can make — I would say, within 5 seconds of landing on your affiliate signup page.
  • Competitive:¬†it’s important to stay competitive with other affiliate program’s in your industry but¬†not¬†at the risk of your costs. which leads me to my next point…
  • Above Costs:¬†It goes without saying: your commission should always be within your margins and above costs of your product or services you are selling.

Before I get into range or exactly how much your commission should be within you margins – let’s get a more general understanding of the different commission types there are…

Different Commission Types:

You can choose to compensate affiliates on whatever action you’d like them to take. What I mean by this is: Buying your product or service, filling out a form, receiving a phone call are just some actions. To get a jist, here is the most common lingo for basis of commission types (below). I am sure as you have seen looking around on the web, you might come across this abbreviations:

  • CPA (Cost per Action) – This is most commonly compensation to an affiliate for referring a paying customer.
  • CPL (Cost Per Lead) – This can be compensation to an affiliate for someone he sends filling out a contact or online form.
  • CPM (Cost per Impression) – Compensation for a banner “view” or loaded page or ad an affiliate gets someone to do.
  • CPC or PPC (Cost Per Click or Pay Per Click) – compensation for an affiliate who gets someone to click on a link/image/etc.
  • Pay Per Call ¬†– Just as it sounds:)

So what is the best most effective? It really comes down to your business, however a Cost Per Action is most common as it compensates the affiliate for actual money to product exchanging hands.

Various Commission Structure models:

Now that we have a primer on the various commission types – let’s see how companies/merchants/advertisers set their commission rates based on their products and services…

commission identifier:

  • Percentage of sale:¬†A percentage of the price of whatever the customer who he/she referred bought. Example: 25% commission on a product that a referred customer paid $10 for. $2 would go to the affiliate.
  • Flat Fee:¬†Just as it sounds.¬†Example: $25 commission on each product or service a customer buys that you refer.¬†

Frequency: 

  • One-time: Commission is paid out one-time per referred customer.
  • Reoccurring: Commission is paid out on a weekly/monthly/annual basis to the affiliate (usually based on the lifetime of that account that he/she refers).

Structures: 

  • Product or Service based: ¬†If you have a wide range of products or services that range in price, you might denote different commission structures for each.¬†Tip:¬†Keeping with the “Simple” suggestion earlier, do it by product category vs. individual commissions for every product; you will be less confused and so will your affiliates.¬†
  • Unit Based:¬†Some companies/merchants/advertisers will have increasing commission rates for affiliates based on how many referrals they make each month.¬†For Example: 1-5 referral sales: $50 flat rate on each referral. 6-10 $75 flat rate on each referral (and so on…).

So what combination of these factors is the best? It really depends on your business but what I have seen the most of is: One-time, percentage or flat rate based.

So really: Is that it?

Most people get to this point and just want a simple answer:¬†What % of my margin should my commission rate be? or¬†Just tell me what is the best commission structure…and while I can give you some general guidelines – it’s a classic case of analyzing risk. Some companies might offer more commission because they keep customer’s longer (think of insurance- the switching and hassle is high for policy holders to switch so they stay longer – thus, the average payment value for that customer is high) while other’s offer quite low commissions because their margins are leaner. It really is up to you to know your business!

Did I cover everything? 

While I covered the nuts and bolts there is still several aspects you might be wondering about such as: How to change your current commission structure without pissing off affiliates or other methods that are involved in commissions/payments (pending periods, minimum commission balances, etc.).

 

How to recover an old, dormant affiliate program

Just the other day, I was hearing something all too familiar …

Yeah, we have an affiliate program – have had one for years.¬†The problem is: it’s such a low part of our sales. We set it up 4.5 years ago and it never really took off. I guess it just doesn’t work for our business.

You would be surprised at how many of new clients come to me with a similar response – nearly 80%.

While there are a lot of industries and business structures whereas their business model doesn’t really allow for a good fit to use an affiliate program, many SaaS based businesses that cater to small to medium sized businesses ¬†– can create an extremely powerful affiliate program…even if it’s been dormant for years.

Here is some good steps to take to assess your dormant program and provide a foundation for getting it back on it’s feet.

1)  Pull the Data.

Hopefully, you have an affiliate program that you can, at the very least, see: How many sales were referred, by what affiliate, and when. By tallying up who is your top affiliates, you can pinpoint who to reach out to gather feedback like, “What are some struggles you face with promoting our product or service through the affiliate program?”¬†If you have the referring URL’s (the URL links of the affiliate’s pages for which a prospective customer first clicked to come over to your website), you can analyze and see how your product/service is being marketed.

If you don’t have any top performing affiliates (meaning your affiliate program is pretty stagnant) the¬†next best area to focus in on is:¬†Your customers.¬†Survey your customer’s on how they found your product/service and what they like most about it. (This later can be used to pitch new affiliates on the top attributes to keep in mind when marketing to their audiences about your products).

2) Force a moment of clarity: what is working and what is not?

Are your commissions competitive? Are you really dedicating enough time to not only proactively recruiting affiliates but also policing current activity for compliance and fraud? Are you on the right platform to track affiliate sales, collect tax forms,pay affiliates Рand does that platform work For your affiliates?

If this is a lot to process at one time: I am with you; scaling and managing an affiliate program can be complex. I find the easiest assessment is finding the most obvious pain point your program might be struggling with, tackling it, and moving to the next.

3) Reach out for advice.

Sometimes the best course of action is to find an affiliate program, perhaps not in your direct competitive space but similar size and target, reach out to their affiliate manager or CEO and see how they solved similar problems or arrived at comparable solution. Or you can reach out to me and the UpFoundry for advice: through a call or email. Happy to help.

Thanks for reading.

 

All about Affiliate Tracking Platforms: Self-hosted vs. SaaS vs. Network

A Network is the way to go – I hear they have all the affiliates and handle EVERYTHING.”

You Should use Hosted Software (SaaS) as it gives you more control.”

If you are at the stage of looking around for the best technology platform – chances are you might have run into other people mentioning the above in reviews, forums, or by general recommendation. I too remember a time when researching the BEST platform for one of the first programs I managed and just felt lost at all the mixed advice.

Well…

Know what? You are in good company…many if not all business owners or CMO’s I work with ask me what they think is the best platform that trumps others and the truth is…

There is no one-size-fits all platform
to run an affiliate program on.

The truth hurts sometimes but don’t be discouraged. It’s best to learn the attributes of each type of platform so you can make an educated decision based on what works best for your company.

Below, I discuss the various options:¬†Networks, SaaS providers, and Self-Hosted Solutions and the pro’s and cons of each.


Affiliate Networks

An affiliate network is a “middle man/woman” between Advertisers (You & and Your Company who has offers) and Publishers (affiliates) who promote these offers. They provide a platform to equally handle Advertiser and Publisher Needs.

Why would you go with a network?

TL;DR: For convenience.
  • They handle final payments, Tax implications (collecting W9’s or other required forms from affiliates), and any issues with payments between Advertiser & Publisher.
  • They have a lot of affiliates registered which for an affiliate is some times an advantage; They use one platform to manage all their relationships with Advertisers (i.e. your company and other affiliate programs they are a part of. ).

Why would you NOT want to go with a Network? 

  • They are expensive:¬†¬†Not only are you paying commissions to affiliates but you are paying a percentage (%) to the network¬†for each sale. On top of that, many networks have extraneous¬†fees like access to their Network (Network fees) and other small “gotchas” for how your affiliate program is found by affiliates in their system
  • Communication:¬†You don’t have access to contacting affiliates directly; you have to work through their platform which often makes it hard to connect with valuable prospects.
  • While the network makes final payments, it’s still up to you to: make sure there is enough funds in the account to pay affiliates, ensure that you are not paying affiliates for orders that are fraud or no longer active. If you don’t have the resources to a) have someone pull this each month or b) using a technical solution (like API integration) to check orders referred by your affiliates.
  • Lower control:¬†you have to work with limitations of the functionality and reporting of these networks.

SaaS (Software as a Service):

The Software as a Service option is provided by a third-party company: They host the platform/application and then you pay a monthly fee (as the Merchant) to utilize their application.

The Pro’s of using Software as a Service option?

TL;DR: For less dependence on Technical know-how.
  • Work 1-on-1 Affiliates:¬†You have direct access to working with the affiliates that are in your program. You can collect the information from affiliates when they sign up
  • Technology Reliance:¬†Your company is not on the hook for uptime of your affiliate platform or any tracking issues.¬†
  • Feature rich:¬†Most providers offer significant amount of features- reports, advanced affiliate tools, and other options that can really boos your program.
  • Support:¬†Many if not most of the SaaS providers offer some level of support to you (the Advertiser) and some of them offer some limited support to your affiliates.

Why you wouldn’t want to use a Software as a Service solution?

  • Can be Costly:¬†Many SaaS providers charged based on your affiliate clicks, impressions and/or how many payments you issue to your affiliates each month. If one of your affiliates pumps up their traffic (despite if it is legitimate) or has a spike in sales – it can cost you $$$.
  • Ability to Migrate:¬†If you ever decide to move away from a SaaS platform it often can be hard as many providers don’t have good export tools or just plain don’t allow them.

Self-Hosted Platforms

A self-hosted platform is exactly what it sounds – you download software, and then upload and run it on your own server.

Why would you go with a self-hosted solution?

TL;DR: For the budget-friendly and the ability for full control and customization.
  • Lower Costs:¬†Since Self-Hosted Solution are typically one-time, fixed costs to buy the software license, it makes it easy on the wallet.
  • Complete Access:¬†Since you run the software on your servers, you have full control of all the data, tracking, as well as the ability to tie in any other technology you use within your organization (Google Analytics or other tracking platforms).
  • Program Customization:¬†You can setup your affiliate program guidelines how you want them completely up to you. If you’d like to control how affiliates sign up for your program, send them emails a certain way, collect data a certain way – all is a possible with a self-hosted solution.

Why would you reconsider a self-hosted solution?

  • ¬†Technical Infrastructure required:¬†It’s very important to have your affiliate program up and running all the time so you can track all sales when they happen. ¬†If you don’t have the technical team or infrastructure to support it – it can be quite tough.¬†
  • Maintenance:¬†You will need to upgrade the software whenever there is a new version. If you don’t, there could be serious security concerns.

 


As you can see, there are a lot of points to consider when picking the right platform and remember: no matter what platform you choose you still need to be responsible for recruiting affiliates, optimizing their performance, as well as reviewing activity for compliance and potential fraud.

 

3 Questions to Ask Before Considering an Affiliate Program.

I’ll admit, the first affiliate program I ever launched and grew was not my idea. It came from a customer/affiliate that suggested we (the company I worked for at the time) start one.

Did I have any knowledge on how affiliate programs worked? A little.

Would I say I knew enough to start one from scratch? Not so much.

And when I did some searching around online about the right time to start an affiliate program nothing rang through.  Would it work? Is it the right time? I had questions that no one really touched on.

Luckily through starting and managing several affiliate programs, I boiled down some central questions that helped clients before they started their affiliate programs.

First..

Do my current customer’s talk about my product?

This might sound like a strange question and you might be wondering why it has anything to do with starting an affiliate program.  I tend to boil down products and services into two categories:

High WOM Products/Services Low WOM Products/Services
 

These are products or services that have distinctive qualities or experiences that causes others to share via word-of-mouth

 

These are products or services that could be useful, but are less talked about via standard word-of-mouth.

 

While your company might¬†think¬†everyone wants to talk about dryer sheets, ¬†it’s just a product that very little people talk about and therefore an affiliate program might not be your best bet. On the other hand, a software company like Buffer, might solve a core issue that many people have and might talk about: scheduling and posting information to their social media accounts.

Second…

What incentive is there for my affiliates to promote?

We often think of affiliate programs under one generic model: They refer a customer your way, and then you pay them for that customer. Affiliate programs under this model is known as a CPA model (Cost-per-acquisition).

But affiliate programs can be more dynamic than that: You can pay affiliates for qualified leads, phone calls, or specific actions within your application.

So how do you come up with an appropriate model?

  • Boil down what is at the crux of your business – is it new accounts? new leads? etc.
  • Ask your customers. Create a survey to see what options they might find attractive and what matters most to them in terms of incentive (money, credit, prizes, etc.).

And lastly…

What are my resources to get an affiliate program started?

Affiliate programs take a lot of work to get started and even more work to manage correctly. It is very important that you have a clear mindset on the various aspects, mainly: money, time, and expertise that goes into it.

Is your commission rate right so that it doesn’t eat into your margins?

Do you or your staff have the time to manage the program?

Is there anyone qualified on the team that could manage the program alone?

These are all very important questions to consider and ones that The Up Foundry can help you answer if your considering a new affiliate program


 

What has you hung up on starting an affiliate program? Is there any questions you have toiled with or anything that has prevented you from making the jump? I’d love to hear from you in the comments section.