A Reality Check PRIOR to Launching Your New Affiliate Program

Building trust and gauging interest levels are two keys to launching a successful affiliate program. Merchants should not expect that top affiliates will flock to sign up and will spend their resources promoting your offer without addressing their basic needs:

  • Affiliates need to be confident they will be paid the commissions they rightfully earn.
  • Affiliates need to know there is sufficient demand for your offer and that an acceptable level of the prospects they refer to your site will convert to buyers.

Introducing what you have to offer the world of affiliates must be done with poise and tact in order to create a foundation of trust that will attract and maintain a solid team. Once your name and business is established as affiliate-friendly, finding marketers will be easier.

Even before launching your affiliate program and putting yourself ‘out there’ for affiliates to evaluate your website and what you have to offer, it’s critical that you work to maximize your conversion rates and possibly your average order sizes as well. You may not get a second chance to make a positive first impression, therefore your website needs to be ‘selling successfully’ before you embark on affiliate marketing.

An Affiliate Program is not a Panacea for Marketing

Often, new merchants especially, with be drawn to affiliate marketing because of its performance based commission structure and intend on having an affiliate program be their primary source of new customers. For most merchants, this is not a wise strategy. The possible exception is highly targeted niche products that typically have a very short product life cycle — like e-books and other electronically delivered products where merchants regularly share the majority of the revenue with their affiliates.

Merchants often adapt this approach because of the following fallacies:

Fallacy #1: “Since I’m paying only for performance (typically a percentage of referred sales) there’s no real risk or investment to launch an affiliate program.”

Fact: Launching and growing an affiliate program requires the proper exposure, management expertise and time to develop an active affiliate base — each of which require an investment. Furthermore, the typical affiliate program does not show a return on investment until three to six months from launch.

Fallacy #2: “All I need is an affiliate program and my affiliates will do all the marketing for me.”

Fact: For most successful merchants, a well-run affiliate program typically represents just 20 to 30 percent of their overall online sales.  Natural search initiatives, paid search (pay-per-click) programs, social networking, general/CPM advertising, email marketing and other channels should be undertaken in order to maximize your reach/sales.

In fact, I always recommend merchants engage in paid search marketing/pay-per-click ads prior to launching an affiliate program. What you learn when you engage in a paid search campaign (and your resulting website analytics) is critical in evaluating your strengths and opportunities.

Once you’re confident that your conversion rates and average order sizes are acceptable, then it’s time to move forward with your affiliate program. Prior to your actual launch, you’ll need to decide on a tracking solution, what your compensation terms for affiliates will be, and the types of promotions you will provide to your affiliates.

Jim Gribble of LinkProfits has been managing affiliate programs for over a decade.

Start by Hiring an Experienced Affiliate Program Manager

If you do not have the funds in your budget to hire a full-time in-house Affiliate Program Manager, then consider an outsourced affiliate program management company like LinkProfits. Generally, this is a much more cost-effective way to ensure the maximization of your program. An outsourced program manager can hit the ground running and truly knows what affiliates want and can connect with them on their level. Even more importantly, an experienced program manager already has connections and relationships with top affiliate marketing websites. This is what’s going to get your affiliate links the exposure needed to drive sales!

If you are a merchant interested in pursuing a robust affiliate program, I invite you to contact me to discuss your particular situation and objectives.

Running a Private Label or In-house Affiliate Program vs. an Affiliate Network Program

Should we run an ‘in-house’ program or join an affiliate program network?

It’s a question that Affiliate Program Managers have wrestled with for years and there’s no clear cut answer, but after you learn the advantages and disadvantages of each approach, you’ll be in the best position to make the decision that’s right for your business.

With the multitude of choices available today for one to run an affiliate program, there is not always a clear distinction between what is commonly referred to as an in-house vs. a network program. First let’s discuss some terminology and definitions…

Below are some basic attributes of each solution type and some examples:

Affiliate Networks: Refers to a place where multiple merchants/advertisers promote their affiliate programs, campaigns and offers to multiple affiliates/publishers who in turn promote these programs to their audiences. (Please note: For simplicity sake, and also because I do not generally recommend them, I am not including a discussion of “CPA” or lead networks in this article.)

Examples of Affiliate Networks include: Commission Junction, LinkShareShareasale, eBay Enterprises (formerly Pepperjam Network), LinkConnector, and AvantLink.

In-House Program: This usually refers to an affiliate program that is not offered through a public affiliate network. Sometimes called a private label program, in-house affiliate programs are typically administered using:

  1. Off-shelf Software purchased outright or on a licensed basis that is installed completely at the merchant’s site and runs independently. iDevAffiliate is one of the most popular affiliate program software products.
  2. Shopping Cart Plug-ins are often available to merchants, as shopping cart software commonly includes an ‘affiliate program module’
  3. ASP Solutions usually licensed on a month-to-month basis are very commonly used. Virtually all aspects of the affiliate program are administered through the solution vendor’s website. Program managers log in to the site to: set up program terms and affiliate compensation levels, run performance reports, provide promotions to affiliates, communicate with affiliates, etc.. Affiliates log in to their accounts to grab promotions and run reports of their activity. Examples of ASP solutions include:

DirectTrack is a very popular ASP solution, but over the years it has evolved into a solution that’s best for those who want to run their own affiliate network with multiple offers/campaigns. Using DirectTrack to manage a single program has become cost prohibitive for most. Years ago, DT costs $50 a month to run a program, now it’s at least $500 a month.

Infusionsoft is a very popular CRM platform that includes an affiliate program module. I’m devoting an entire article to Infusionsoft that will be released in November.

Advantages & Disadvantages of In-House vs. Affiliate Network Programs

As an outsource affiliate program manager for over 10 years, I’ve managed a slew of in-house and network programs. Recruiting desirable affiliates has always been an important responsibility in this role and it’s always been abundantly clear to me that affiliates prefer to work with merchants though a respected third party network.

The primary reasons why affiliates prefer to work with a network:

  1. Affiliates want to ensure they get paid. This desire cannot be emphasized enough. Affiliates know that merchant programs will be flagged or suspended by the network if they do not keep their accounts properly funded to cover commissions earned. Affiliates also trust that third party tracking is more reliable and they will earn proper credit for their referred sales. In addition, if you have a ‘young’ brand this concern becomes even more critical. Affiliates rightly have no reason to trust they will be paid the commissions they’ve earned by a company that has not been in business very long and is not well-known.
  2. Affiliates don’t want to learn how to use your in-house ‘system’.  In order to participate in any program, affiliates need to know how to get link codes, generate and interpret reports, access product datafeeds, post ever-changing deals, and more. Every affiliate solution, whether a network or in-house, is unique in how it handles these functions, so there is always a learning curve. There is often resistance by affiliates in having to learn the ‘ins and outs’ of another affiliate solution. This is why many will only work with a handful of network solutions only.
  3. Networks offer centralized reporting and consolidated payments.  Affiliates prefer to limit the number of places they need to go for reporting. They may be participating in many programs within one network and therefore can run reports all at once vs. logging into a single in-house program. In addition, most programs have a minimum payment amount which is often $100. For the small affiliate, they may never reach this threshold for a single program they are promoting, but since networks will consolidate earnings from all the programs the affiliate is participating in, it’s then much easier for the affiliate to reach the minimum payment threshold.

From the merchant’s perspective, the great advantage of using an affiliate network is your program’s exposure to lots of affiliates. Networks already have a base of affiliates – in some cases, hundreds of thousands – and when your program launches on one of these networks this exposure is tremendous and quite valuable.

There are still some important advantages of running an in-house/private affiliate program:

1. The Direct Relationship.  The single most important advantage of an in-house program is establishing a direct relationship with each of your affiliates. With some network solutions, it’s virtually impossible to do this. Typically, will you have not access to anything more than an affiliate’s email address – and some networks even allow affiliates to hide their email address and opt-out of your correspondence! This has often mystified me. Why networks would want to limit merchant communications with their affiliates is without explanation.

The other critical factor with a direct relationship is that you do not have to pay a performance based fee to the network each time one of your affiliates refers a sale. Furthermore, some of the networks base this fee on a percentage of the commission rate – usually from 20-30% of commissions paid – vs. network performance fees based on sales revenue – usually 3% of sales. This is another pet peeve of mine…as it seems unfair to be required to pay more to the network when it’s decided to increase overall commission rates or even to raise the commission for an individual affiliate. For example, if you are paying affiliates 10% and the network is earning 30%, then their net fee is 3% of sales. If you increase commissions to 15%, then the network automatically gets a ‘raise’ to 4.5%! This amounts to a disincentive to raise commission rates in order to grow one’s program – something the networks would want to encourage!

2. Increased Control and Flexibility. With an in-house program you have the ability to create a custom-built solution that allows for more integration with your business. With more integration with your business, you can much more easily track affiliate referrals for the lifetime of the customer. This means affiliates can be paid true residual income on the customers they refer. With integrated, database tracking, this is a straight-forward process. Cookie tracking is all that most network solutions can offer which is a very unreliable way to track future purchases.  And with a custom solution comes greater control. However, this will put more demands on IT Resources that may or may not be available to you. Still, even with a third party or software solution, you typically have more control than when part of an affiliate network.

So Which is Better — In-house or a Network Program?

Jim Gribble of LinkProfits has been managing affiliate programs for over a decade.

Of course, there is no clear choice, it depends on the particular needs of the merchant and how they match up with the advantages and disadvantages cited above.

However, I generally recommend to successful merchants to consider running both an internal affiliate program and also have a presence on at least one of the large affiliate networks. This is the strategy that I have seen work well and have implemented successfully myself numerous times.

If you are a merchant interested in pursuing a robust affiliate program, I invite you to contact me to discuss your particular situation and objectives.


Automated Coupon Datafeeds are Preferred by Most Affiliate Deal Sites

If you are an affiliate marketer and run a coupon or deal site, then you are probably using one of the many ways to receive coupon codes from merchants via some type of automated feed.

Virtually all of the major affiliate networks offer some type of coupon datafeed, including Commission Junction’s Coupon-Only Offers RSS Feed, LinkShare’s LinkLocator, Shareasale’s Deal Database Feed, LinkConnector’s Coupon/Promotions Feed, eBay Enterprises’ RSS Feed, and AvantLink’s Dynamic Coupon Feed.

It’s pretty much an accepted fact that using coupon codes to promote a merchant is a proven-successful way for affiliates to boost clickthroughs and conversions — and ultimately, earn more commissions. And you don’t need to be a coupon site to promote coupon codes. Plenty of affiliate publishers include them in blog and Facebook posts and in their newsletters to subscribers. Typically, if you’re only going to feature a handful of coupon code deals, then one does not necessarily need to subscribe to some type of coupon datafeed. But if you do run a ‘deal site’ then some type of automated method to retrieve and update promotions is a must, since it can save you hundreds of man-hours.

However, using one of the feeds or API solutions from the large networks can be difficult to fully integrate into your website and to automate these activities. There are tech-savvy folks out there who are happy to help you with this challenge OR affiliates can utilize one of the tools available that will help you to fully automate the various Network feeds into your website.


I’m happy to highlight four tools that will help you to automate coupon code integration into your websites. Here’s my alphabetical list of these services. Please note, there are other similar services out there, but they do not appear to be active businesses judging by their lack of current news published on their websites, so I am not including these services here.

1. Coupilia — According to their website, Coupilia currently disseminates coupons from 6,994 merchants across 15 affiliate networks. “We are very selective in the merchants and networks we partner with and only offer quality merchants for our clients.” They currently offer two different subscription plans: Their Professional Plan which has a 14-day free trial, costs $499 per month and is valid for one URL. For rev-share or multiple domains, Coupilia asks that you contact them for custom pricing.
2. For Me To Coupon — This is one of the most popular coupon integration tools.  According to their website: “For Me To Coupon takes the hassle out of running an affiliate coupon or deal site. We spend thousands of hours each month testing, fixing, and categorizing coupons and links so you don’t have to. In addition to aggregating offers available through the networks, we also build deep links to sales and clearance, promotional shipping offers, and provide extensive data on every merchant we support.” They offer three subscriptions from $500 to $1499 per month and each has a free 30-day trial.
3. GoldenCAN — This long-standing tool is primarily focused on product feeds, but it also has a Coupon Integration™ option which “provides an opportunity for the affiliates to display thousands of online coupons, promotions and recent price drops for the products of their selected merchant(s). All these information will be available to their store with just a single line of code. This store can be created for single as well as multiple merchants. Different styles and display options are available that enhance the store functionality and visibility. For example you can create a store for coupons only, for price drop products only or even for both.”
4. PopShops – They have been around a long time and were purchased by Rakuten Marketing (owners of LinkShare) earlier this year. Originally focused on product feeds, Popshops also offers a “coupons and comparison shopping” solution.  Plans range from Free (with rev-share) to $59.99/month, with a 30-day free trial. LinkProfits has no referral relationship with Popshops, but we can offer readers a 10% off coupon for PopShops subscriptions by using the code: LINKPROFITS10

Click to learn more about FMTC's Deal Bank

Please note: I included Prosperent in the graphic, but upon further investigation it is felt their model is more similar to ad serving than it is to an automated coupon data feed service.

Using Paid Advertising to Drive Affiliate Sales from Your Website

OK, so you’ve launched your new website or blog…now what? How are people going to find you and how are you going to generate the all-important traffic to your new site?

Of course, it’s critical that you build your organic rankings through the generation of unique and interesting content, links and trackbacks from popular related sites, registrations in the important directories, and more, but these activities take time.

You can jumpstart your traffic flow through paying for site visitors. It’s a great way get eyeballs to your site. However, before you start investing in paid traffic sources, you need to consider your site’s ability to monetize that traffic so that you will at the very least, breakeven with your investments. If you’re not an ecommerce site, then monetizing through paid ads or affiliate ads and links is a great way to generate revenue.

Once your site is set up to properly monetize visitors, then consider these various ways to generate paid traffic:

1. Paid Search – Paid search advertising, often referred to as pay-per-click, is by far, the most popular way to drive targeted traffic to your website. Your two best choices are Google Adwords and MSN Adcenter (which controls Yahoo and Bing). When you advertise through paid search you are basically buying your way to the top of the search results for certain keyword phrases, like “Sciatica Pain” for example.

There are potentially thousands of keywords you can reserve and bid on for your website – each will allow your ads to show up when people search those specific phrases. Your job is to not only identify these terms, but also to decide how much you can afford to spend per click. You need to make sure you choose the most relevant keyword phrase first so you know the traffic is the most targeted and will work the best. It’s suggested to make your account is set to display your ads only on actual searches and not on the “content network”.

Also, make sure specific keywords are associated with specific ads you set up in your account, and then direct to specific “land pages”, product pages or articles on your site that make sense – the page most targeted to those keywords and ads. Sending all the keywords to your homepage usually isn’t the best policy.

You can usually advertise more effectively and get a better ROI by advertising on MSN Adcenter because there is less competition and you can build a larger, more expansive keyword file at a lower cost per click. The volume isn’t anywhere near what it is in Google Adwords, but the ROI should be better and you can actually get traffic at a lower cost per click. Over time, you should be able to build amazingly large, product keyword campaigns, divided into “Ad Groups”, that will be your best source of sales and revenue.

UPDATE: Since LinkProfits is now a certified member of Google Engage for Agencies, we have access to $100 vouchers that can be used to start a new AdWords account. If you’d like to receive one of these voucher codes, please contact us and we’re happy to send one to you.

2. Facebook Advertising – Facebook has a great online advertising platform because not only do they have a ton of traffic to realize, but their targeting technology is great. You can really drill down with your advertising specifications to visitor location, demographics, and their interests in certain subjects. The closer their interests are to what your site sells the better it should perform.

You can advertise two ways on Facebook: You can advertise your site or products, or you can advertise you Facebook Fan Page, which works really well to build targeted fans. You can also do “sponsored Stories” which place your ads around related content on Facebook. At the end of the day you have to be converting the traffic with a great performing website, otherwise it may not have an ROI for you. But if you can convert the traffic effectively there really is an unlimited amount of traffic on Facebook to advertise your company or site to. Fan Page advertising is one of the top ways to build targeted fans for your company, so make sure to capitalize on that as well.

3. Site Sponsorships – paying targeted websites, on a monthly or yearly basis, to display your banner ads is a great way to advertise online. The challenge is that you will need to spend time searching out and contacting websites that have decent traffic and are highly related to your own. This is a critical step, otherwise the traffic won’t be targeted enough to give you a return on your investment.

You can use tools like Alexa.com and Compete.com to check and see how much traffic websites get before you offer them a certain amount of money to run your banner ads. Then you can track your conversion rates on the sales it generates to see how much (or not) was made and decide if that website worked for you. As affiliate marketer, it will be more challenging to see an acceptable return because you are primarily a conduit for other merchants and not selling anything yourself. By buying ads on websites that are related to your own, you can generate great traffic and sales through new sources. If it doesn’t convert well enough then you can stop the ads at the end of the month. If you test even just 20 sites a month and half of them have an acceptable ROI, over time you can build up a valuable group of partner sites that should perform very well for you.

4. Newsletter sponsorships – Newsletter sponsorships and solo email blasts are also a great way to drive qualified traffic, but again you have to find relevant enough lists that will generate enough traffic to make money. Keep everything Can-Spam compliant of course. You can do a “solo” email blast, which only promotes your company to their list or be part of their newsletter layout with a banner ad. Obviously, the solo email works best, but some companies or site owners aren’t willing to do solo emails so you have to just go in the newsletter and see how it goes.

Be sure to negotiate a great rate with the site owner to make sure the campaign works effectively. It’s critical for you to track all the clicks and sales with some kind of traffic mechanism, I usually recommend Hasoffers.com. Once you see how effective the campaign was, you can schedule more sponsorships going forward. You can have someone on your team searching Google for websites that rank well and then contact them asking what sponsorships they may have available. Effectiveness of the campaign can boil down to your subject line and creative, so make sure you have a great subject line and excellent looking HTML email creative to give it the best chance possible.

There are many other ways to send paid advertising to your website, such as: cost-per-view ads, other types of “per click” ads, and cost-per-impression advertising, however you should only test out these other types once you have maximized your spending on paid search and facebook.

DMA2011 Big Success

Wrapping up here in Boston at the Direct Marketing Association Conference…

Approximately 10,000 delegates gathered from all over the world at the Boston Convention Center. The show was very well-run. There were hundreds of exhibitors and a number of informative educational sessions.

The session I ran about Affiliate Marketing was well-recieved. We had a nice group in attendance and I thought it went very well. I was told by my friends at dinner, “there were a lot of good questions and we were surprised to see how many people came up afterwards — we didn’t see that at other sessions.” — that was nice to hear.  Thanks Tina and Lynn — also for snapping the pics!

I’m most appreciative that Carolyn Kmet of Groupon and Todd Farmer of PerformStreet Media (pictured with me here) joined me for our presentation. They each made huge contributions to the session, both from a content perspective and for sharing the great passion they each have for affiliate marketing.

If you’d like a copy of our Powerpoint presentation “10 Successful E-Commerce Affiliate Program Marketing Strategies” please contact me and I’ll be happy to send it to you.

LinkProfits’ Jim Gribble to Speak at DMA:2011 Conference

Learn more about DMA:2011Last week, I was very pleased to learn I was selected to speak at this year’s Direct Marketing Association Conference to be held this October in Boston.

I am honored to be joined by Todd Farmer of PerformStreet Media and Carolyn Kmet of Groupon for our session that’s titled:

10 Successful E-commerce Affiliate Program Marketing Strategies

Presentation Summary:
Find out the most critical aspects involved with launching and managing a successful affiliate program and how to approach each aspect in the best way. Benefit from real-world examples and suggestions of specific resources to best help you implement the important strategies we will present.

The critical aspects will include the following:
1. Is an affiliate program a viable marketing channel for your ecommerce business? Just because affiliates are paid on a performance basis only, there are still investments required to start up, build, and manage an affiliate program. An affiliate program is not a panacea for a weak business concept. Your site needs to be successfully converting traffic to buyers before you consider an affiliate program.

2. Deciding on a CPS, CPL Affiliate Program and the differences between big “Retail Networks” and “CPA Networks”. When determining your Affiliate Marketing Strategy, what do you need to know about the different payout types, and the different types of affiliate networks?

3. Should you join one of the affiliate program networks or run a private/internal program?  “Choosing your solution”. Before launching your affiliate program, you need to decide the platform upon which you run it.  We discuss the differences between an inhouse solution, and choosing one of the available networks.

4. Establishing an affiliate compensation plan that is attractive, yet affordable. When setting affiliate commission rates, you need to determine the optimal rate that takes into consideration:  overall profitability, product profitability, lifetime customer value, competitor payouts, conversion rates, affiliate attraction, bonus tiers, attractive EPC, ‘room’ to secure desired relationships, credit affiliates with phone orders they refer, etc.

5. Choosing an Affiliate Manager or Outsourcing to an Agency, and incentivizing them, and supporting their efforts for maximum results. Who will run your affiliate program, and how will you pay them?  How will your company support the channel?  We discuss the elements important in ensuring a highly profitable affiliate program.

6. How to identify, approach and secure partnerships with desirable affiliates. Your affiliate program needs the best affiliates, and you need to be able to reach out to them and secure their participation.  We discuss the elements important in successful affiliate recruitment practices.

7. How to promote your Affiliate Program so desirable affiliates find you. In addition to your Affiliate Manager’s direct recruitment practices, Affiliates need to know about your program and apply.  We discuss how to publicize your affiliate program and entice quality affiliates to apply.

8. Segmenting your affiliate base so you can best serve their unique needs. Identify content and social networking affiliates, deal site affiliates, paid search affiliates, etc. so you can provide them with the support and marketing materials they use.)

9. Providing results-oriented marketing material for your affiliates. The marketing material you provide your affiliates must be perfect for each affiliate, and their promotional efforts on your behalf.  We discuss the variety of marketing material important for a successful affiliate program.

10. How to best promote through affiliate deal/coupon sites. Affiliates come in all shapes and sizes.  Some of the most popular affiliate types are the coupons / deals / incentive / loyalty sites.  We discuss how to leverage their reach and influence, while remaining profitable for you.

Here is some information about the conference, according to the Direct Marketing Association website:


Data. Integration. Engagement. Relationships. Real-Time. These are the hallmarks of DMA2011 – and what makes it the most relevant marketing event in the world.

At DMA2011, you – and 10,000 marketing peers from around the world – will find everything you need to develop and execute the real-time integrated marketing campaigns:

  • Learn how to effectively integrate multiple channels including social, search, mobile, print, email, and more
  • Understand what you need to leverage your data, determine cross-channel attribution and develop optimization strategies
  • Meet with hundreds of technological solutions providers representing all channels and processes to better integrate your campaigns and improve effectiveness
  • Network with thousands of peers, gurus, and thought leaders from 50+ countries to grow your contacts

$300 Savings with this Keycode!

I’ve been authorized to extend a special $300 discount to my readers and followers! You can use Keycode AN614 when registering for DMA2011. You can use this discount along with the Early Bird rate that is valid until June 24th. This special discount cannot be combined with any other single or group offer/promotion and cannot be retroactively applied to previous registrations. For more information about DMA2011 registration, visit www.dma11.org.