What is Affiliate Marketing?
This kind of online marketing is based on a CPC, CPL or CPA basis. An advertiser (called a “merchant”) provides banners and a set price for a conversion (such as sale, lead or newsletter subscription). Website or app owners (called “affiliates”) show banners and text links on their websites and emails. If the traffic coming from affiliate marketing leads to a conversion, the advertiser pays the set fee. Conversions are usually tracked by a cookie, placed by the affiliate websites.
Affiliate marketing is an interesting medium for many advertisers. It minimizes advertising risk, as sales or leads are guaranteed. Affiliate marketing is also transparent, as nearly all affiliate networks provide a lot of affiliate campaign data. Another advantage of affiliate marketing is the possibility to set a fixed price for a conversion, ensuring a minimum ROI. Advertisers also often have the opportunity to turn down any sales that aren’t final! This caused a swift adoption of affiliate marketing in many companies’ online marketing mix.
However, many companies are turning away from affiliate marketing, for the following reasons:
- Publishers were cashing in on the publishers’ brand name
- Advertisers set up their own Google AdWords campaigns, taking this profitable medium away from affiliates
- Last year’s Panda Update from Google severly diminished the reach and traffic of affiliate marketing websites
- Tracking problems can lead to unexpected bills for advertisers
- Some publishers generate fake sales or leads that your company will have to pay for
- SEA and SEO are more profitable online channels
- For optimal results, advertisers need to invest time and effort in affiliate marketing and affiliate management
Affiliate marketing tips
How can you make sure that your affiliate marketing pays off? And that affiliate marketing wont’t cannibalize on your other online media? Use the following affiliate marketing tips to ensure that you only pay for real results:
- Protect your brand. Don’t allow publishers to advertise on your brand name, request brand protection for PPC media like Google AdWords and set up your own AdWords brand campaign.
- Protect your working environment. Ensure that you are not paying for sales made from your office or call center. Block the IP-adresses from your offices and your webbuilder or marketing agency (for testing). Do the same with cookies.
- Monitor sales closely and at least once per month. Are the email adresses that were generated ‘real’? Are the bookings not getting cancelled? How long do subscribers stay in the email database? What are the KPI’s from visitors generated by the campaigns?
- Check the conversion’s origins. Does one cookie generate a lot of leads? Are there many sales coming from one IP-adress? This might indicate fraud or a cookie placed within your business environment.
- Check the tracking code. Make sure that it’s set only after visitors have been redirected to your website. Check the cookie expiration time as well. Is it set right? The longer the expiration time, the more conversions will be attributed to the affiliate - even if the conversions came from your own AdWords campaign or social media.
- Most importantly:make sure that you’re clear to your affiliates and tell them what they can and what they are not allowed to do!
Canadian affiliate marketing networks
All affiliate marketing networks have their own characteristics. They can focus on countries, languages, verticals or product categories. Examples of Canadian affiliate networks are:
- AdCanadian Inc.
- ShareResults Canada
- Linkshare Canada
- AdJump Media (former Canadian Sponsors)
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