Performance Marketing vs. Affiliate Marketing

 

What is performance marketing? What is what we refer to as “Affiliate Marketing”? To me, Performance Marketing is just that: Performance. What is performance? By definition it’s the execution or accomplishment of work, acts, feats, etc. That means that just being “associated” or “affiliated” with someone does not equal true performance or true value. By signing up for every known brand then trademark bidding on brand terms to convert easy sales with coupon codes is not performance marketing. It’s “affiliated marketing”. By definition, you have to do something to earn something back.

Therefore performance marketing is more than just “affiliate marketing”. It’s creating and cultivating value where value did not exist before. Affiliate marketing has had a bad name for a while now and I wonder if the term is bringing unpleasant thought and feelings to an industry that’s actually different than it’s perceived value. To many, “affiliate marketing” is rampant with fraud, scams, spam, crimes and many other unpleasantries. However “performance marketing” shines innovation, teamwork, dedication, passion, value and incremental sales.

Is it time we started changing our terminology about who we are and what we do? The Performance Marketing Association doesn’t call themselves “The Affiliate Marketing Association”. Doing so would bring in a completely different group of people and values to the table.

ShareASale, one of my favorite affiliate networks because of their people, values and the way they bring value to their partners as best they can (both from a merchants and publishers) uses the tag line “True Performance Marketing”.

What are we offering to each other as performance marketers? What am I offering you as an outsourced program manager or consultant that makes you want to do business with me? What is a merchant offering to their customer to make them chose to buy through them over someone else? What role do affiliate partnerships have in driving new sales, improving the exposure and goodwill of a brand?

How do you create value? By doing what others are not willing to do. By putting in that little extra effort. By writing about a great new product or company that you’ve found and love so others can enjoy it too – and sharing it through every channel you can – in your newsletter, on your blog, in your tweets, in a video – with a link to the product and a picture of the product and some widgets to other related items that others might enjoy.

Sure I can give you a coupon code to help me drive some sales – but that on it’s own is not going to create the value that our merchant partners are looking for: brand awareness, product awareness, goodwill through consumer engagements and solid communications of features, benefits and positive experiences. These things lead to new sales.

A long time ago when I first got into the industry I read a book that said an affiliate’s job is to “presell”. PRE-sell. Not post sell. Not capture a sale when the customer is halfway through the checkout. Pre-sell them. Doing that takes work. It requires performance through time and effort.

In an industry where true value is essential to our survival, performance wins over affiliation any day.

Is Affiliate Marketing Dead?

Is Affiliate Marketing Dead?I had a question asked of me last week that kind of stunned me. An affiliate friend of mine who used to be one of my top performing affiliates a few years ago asked me “Sarah, be honest with me, is affiliate marketing dead?”

What? I was shocked!

I’ve watched millions of dollars being made through affiliate marketing programs over the last few years and have seen constant growth year over year. I’ve seen the level of awareness and interest in the affiliate space boom with no signs of it slowing anytime soon. There are new records of affiliate and merchants joining the space and new tools, resources, networks and solutions popping up to accommodate their needs.

So how could this affiliate, one who’s performed so well for so long, think the industry is dead?

Google’s Panda and Penguin updates KILLED their business model, that’s how. They spent years creating beautiful websites on particular subjects poring hours, weeks, days and years into great content and self taught SEO, only to get hit hard with Panda then killed completely by Penguin. How are affiliates to stand a chance? How can anyone still make any money?

Well, affiliate marketing is not dead. On the contrary, it’s absolutely booming. It’s just changed. And we need to change with it. As affiliate managers its our responsibility to help affiliates out. This affiliate didn’t have the budget or experience to complete in paid search, nor did they have the time or budget (at this point) to compete against the retailers themselves for those coveted first page placements in organic search. It would take several months to recover from what’s already happened to this affiliate should they start their SEO work again, let alone risk something else happen out of their control.

My affiliate friend asked many good questions. “Is Google trying to rid affiliates for good?” “Are they trying to make more money by forcing affiliates to use paid search instead of organic?”, “If I change my business model and try something different will I get hit again?” “Will another model even work?”.

I wish I had the answers to these questions. I let my friend know where the trends are right now: coupon / daily deal sites, mobile, social (including blogging), video and any new technology or traditional offline model that’s going online on a performance base.

My friend wanted to know which I thought was her best chance of recovery and longer term success.

My first suggestion? Don’t start a coupon site. Affiliate managers are sick to death of reviewing affiliate applications where 80% of the new applications are pop-up coupon sites that are trying to get into the market. If you’re coming in now, you’re way too late. Merchants do not need 100+ coupon sites. They only need a handful of selected ones to get the job done.

The more advanced affiliate managers hand select a few coupon sites to work with, then decline the rest. They are also starting to value different types of affiliates more than others, giving higher commissions or more credit to affiliates who drive long term loyal customers versus the “whoever has the best deal today and I don’t care what brand it is nor am I going to buy from them again if it’s not 60% off” type of buyers. Because of this coupon sites do not generally fall into the “high value incremental sale” column.

Affiliate managers also consider the amount of effort needed to find and convert that customer for the merchant. For example did they have a huge following they actively reached out to? Did they create an app that had an affiliate tracking link inside? Did a lot of programming or design need to be put into the effort? Is the sales strategy legitimate and fair? Or did they take five minutes to slap a code together and have results show up for trademark plus terms in the search engines? These are all things a good affiliate manager needs to consider.

From the affiliate side, not only is the coupon market already saturated, it’s almost impossible to compete against super coupon affiliates such as retailmenot.com in organic search. If you don’t have paid placement budget, then how are you going to get found? Facebook? Maybe. But I doubt you’ll get the volume you need in order to drive enough sales through performance marketing to earn a living relying strictly on Facebook as a coupon affiliate.

Blogging on the other hand is a completely different story. People go online to find solutions to problems they have, and generally they need to find information about something so they can make a decision for themselves. This is where bloggers have so much success in affiliate marketing. There are incredibly successful bloggers out there making an insane amount of money through performance marketing because they have found their voice, their niche and a loyal following of people who are learning and buying through their recommendations because they are considered experts on their topic. That, and they have earned the trust of their readers. You can blog about anything and everything under the sun and the cool thing is you can be as creative as you like.

Bloggers use different channels outside of (but not excluding SEO) to drive new traffic and business to their websites and build solid relationships with their readers through shared opinions that are either original, said with conviction or as a proven expert in their field. They rely on building a following through social channels, newsletters or RSS feeds, search, conferences, online and offline PR and even good old word of mouth. All in all, they don’t put all their eggs in one basket.

There are lots of tools out there to help bloggers better monetize their websites (future blog post to come), produce content more easily, marketing their sites more effectively and grow their fan base faster.

So what’s my point? Affiliate marketing is not dead. Not in the least. It’s simply evolved. It’s fluid and ever changing  so both affiliates and merchants need to be prepared to adjust to those changes and be ready to adapt.  You as the affiliate manager need to be ready to support affiliates in their quest for earning opportunities and changes to strategy. That’s why it’s important for you to stay on top of important topics in the space.

How can you do this? Be clear on what is working in the industry and not. Be clear on what strategies both merchants and affiliates are using so you can offer fair, honest and useful feedback to your affiliate partners. Be ready to offer helpful tools and tips affiliates can learn more about. The PMA blogs about all kinds of important issues – things that can help prepare both affiliates and merchants for those changes. That’s usually a good place to start.

As their leader, be their main resource for performance options. Know the stakes, know the issues, know the best practices. By being knowledgable about things like Google Panda and Penguin, you can help affiliates adjust to change more easily.

Sometimes it’s hard to turn away from a business model you’ve been using for years, especially one you’ve had previous success with and have stuck to for so long. But this industry changes rapidly and we need to be prepared to change with it.

We don’t need to be the rock in the water. We need to be the water itself.

How do you help your affiliates adapt to change?

5 Myths About Your Affiliates

There are several misconceptions that merchants have about their affiliates and their affiliate marketing programs. Here are 5 common myths I’ve come across over the years.

1. Affiliates Work for You

Affiliates work WITH you, not for you. They work for themselves. Many merchants have the mentality that affiliates are their employees or subcontractors. They are not.

The beauty of being an affiliate is that you have the freedom to pick and chose what merchants you want to work with, which products you want to promote, which hours you want to work, what you want your website to look like and how you want to market them.

Affiliates can be anything from stay at home moms and dads to large corporations looking to further monetize their websites.

So how, then, do you work with them? As valued partners. As respected peers. You have to ask nicely, show them that you care, provide the tools they need, have good response times to their questions and inquiries and respect that they have the right and freedom to work with you or not.

It’s your job as the merchant to provide them with the value they are looking for and a solid working relationship so they feel happy and confident promoting you and your brand.

2. Affiliates Don’t Want To Be Reached Out To

It’s true that not every affiliate wants to be called at home or constantly harassed by email, but for the most part, the vast majority of affiliates want to be reached out to.

Better yet, affiliates are shocked when you personally find the time to look through their website and call them to explore ideas or send them a personal message to see how they are doing, if they need anything or had any questions about your program.

Affiliates need to be communicated with. How else do they get the most relevant information that’s applicable only to them? Or ask the questions they’ve been wondering about how to best position or sell your niche products?

Most affiliate managers send a newsletter one a month or once a quarter. However you’ll get better results if you do a little more. Try personal outreach. Host a live webinar where affiliates can ask you questions about your program or how to better position your products so you can ALL have better sales.

If you must rely on your monthly newsletter being your only form of outreach, try to include as much information as possible to help them make better decisions and updates to pre-sell your products on their websites. Things like best sellers, new products, new features on your website, upcoming sales, new banners or text links or videos should all be included.

I would even take this one step further and encourage you to segment your affiliate list to send separate newsletters to different groups of affiliates depending on their level of expertise and performance. You don’t want to send basic tips and tricks on Facebook marketing to an affiliate who strictly does PPC, and you don’t what to send data feed updates to affiliates who only have a content site and strictly use text links.

The point is, affiliates need relevant information and they need to know you’re looking out for them. This way, you can work together to find the best possible solutions that will help them, and you, get the sale.

3. You Should Only Care About Your Top 1% of Affiliates

This is a very dangerous belief that a lot of merchants seem to take. Think of it this way, if you only have 100 affiliates in your program, with 1 (your top 1%) producing all your program’s sales, you have just put all your eggs in one basket.

What happens if that affiliate decides to leave your program? Or one of your competitors comes along and snatches them up instead? Your program has just gone from high performance to zero performance overnight.

Instead, spend time taking care of your higher performing affiliates, but also look to bring in new potential high performers as well as help the guys who are already in your program.

You never know if someone already in your program who’s relatively new in the field will end up being one of your best performers, and they are simply waiting for you to work with them before they break out.

4. Affiliates are Thieves and Scammers

Affiliate marketing has had a bad reputation for a long time due to unethical behavior from a few affiliates as well as the quick fix, porn, gaming or get rich quick schemes.

Fortunately there are also a TON of ethical affiliates who work hard, put forth the honest time, effort and financial investment, and have a legitimate business for themselves.

These guys follow the rules, honor your program terms of service and are able to capture the right targeted audience with the same skill and technique that some of the leading marketing agencies in the world use.

From this, it’s important to know how to identify fraudulent affiliates in order to better protect your program, but also important how to recruit super affiliates who just know what they are doing, and do it right.

5. Affiliates Should Perform Immediately or You Should Kick Them Out

First of all, unless an affiliate has done something incredibly unethical, illegal or diminishing to your brand, it’s better not to kick an affiliate out of your program.

Here’s why:

Your affiliates, being self employed and in high demand, are extremely busy people. Many affiliates sign up for multiple programs at the same time and don’t always get to them right away.

Some affiliates sign up for a program because they have a domain that would be suitable for your products but haven’t had a chance to launch their new site yet.

Other affiliates are simply new to affiliate marketing (or internet marketing in general) and are still trying to figure out the best way to promote your product or brand while they learn the ropes. There is no reason they can’t become a top producer for you within a few months.

There are a hundred reasons why your affiliates haven’t gotten you up on their site yet, but it’s important to know that one day they may, and that it could mean a lot of sales for you.

Affiliate marketing is a long term strategy. If you want fast results, launch a Paid Search campaign. However if you want to work with your affiliates as valued partners, you’ll both need to invest in a relationship together, both working to understand the others’ needs and desires, then finding a way to help each other achieve them. Usually as the affiliate manager, that next step comes from you and your affiliate outreach strategies.

As a merchant you need to help educate your affiliates about your products or services, what works well to convert sales, what keywords perform over others, what products sell better than others, what value propositions or words to use in their copy and so on. Ultimately, they need to test these things themselves, specific to their website traffic and make adjustments that work for them.

Not every affiliate is going to work the same way and not every method is going to be successful for each affiliate. Just like any other marketing channel, you (and they) need to test what works, measure, tweak and try again. It’s a process and it takes time. So give it the time it needs to grow and flourish into something beautiful and profitable for all.

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