Chances are you’ve heard of affiliate marketing. Maybe you’ve even tried setting up your own affiliate program. The appeal of affiliate marketing is that it allows you to leverage independent marketers to promote your product, and only pay when a sale is made. The challenge of building your own affiliate program from scratch is getting a large number of quality affiliates to run your offer.
Enter the affiliate network. An affiliate network is simply a company that connects affiliates with offers, like yours, to promote. They can and should be more than this though.
An affiliate network should help you position your offer so that it is attractive to affiliates. Remember, you’re competing with other offers in your niche and country. If your offer doesn’t convert or payout as well as other offers, you’ll have a tough time getting traction.
Your account manager should help you not only set the right CPA for your offer, but should also work with you to dial in your offer’s conversion rate. This isn’t something that happens over night, but can be done within a short time with iterative changes and small scale testing. Once this is done, your account manager should be reaching out to known, quality pubs (publishers, aka affiliates) to test and run your offer.
To make sure things don’t get out of hand, you’ll want to set a weekly cap on sales for your offer (i.e. 1000 sales per week). Set your cap too low, and you won’t get any attention from the high volume pubs. A daily minimum of 100 sales a day is really needed to get the attention of quality pubs that can drive the sales volume you’re looking for.
Once your offer is running on the network, you need to keep a close eye on your KPIs to keep tabs on affiliate quality. One bad affiliate driving high volume, low quality traffic, can lead to an influx of customer service calls, refunds and ultimately chargebacks. Monitoring KPIs like refund rate, lead to sale ratio, decline ratio and rebill rate on a sub ID level (tracking by individual affiliate) will help you to quickly weed out the bad eggs and keep your offer and merchant account healthy.
In addition to recruiting affiliates and helping with quality control, your affiliate network can also act as a buffer to help cashflow. Typically, a quality pub will receive next day payouts from the affiliate network. The advertiser pays the affiliate network weekly, typically with a net 7 term. With some history and negotiation, you will be able to do much better. In some cases, you may be able to negotiate weekly net 14 or even weekly net 21 terms with your network. The longer the term the better, as it allows you to collect on your sale before your invoice becomes due.
You should also build in a quality guarantee into your terms with the network. For example, if your product is sold on a trial or subscription basis, you may ask the network to credit you back if your rebill rate falls below 65%. If you’re selling a straight sale product, you may ask your network for credits back if the refund rate is over 12%. These are examples, but know that you need to keep your network and the affiliates accountable for performance and quality and the best way to do that is to make sure they have skin in the game.
Fraud is common in affiliate traffic. That isn’t to say that all affiliate traffic is fraud, by any stretch of the imagination. More often than not, ‘bad traffic’ is the result of affiliates using over-aggressive marketing tactics to close a sale. Regardless, you need to monitor and check for fraud, including ‘friendly fraud’. Tools like Max Mind, 3D Secure and Kount can help monitor and stop bad traffic before it impacts your business.
Interested in learning more about affiliate networks? Join us July 19-20 in New York City at Affiliate Summit East 2021 to meet and network with the top affiliate networks.