A common obstacle that some affiliate programmes face is the over reliance on those key affiliates who drive frequent, substantial revenue to a campaign - with incentive sites often being the prime suspects. Sometimes the reliance can be on a single affiliate, and trying to reduce this reliance can often be a challenge. The following outlines some of the potential dangers of an incentive reliant programme and helps identify the key areas of risk to resolve. This will help to ensure a sustainable, healthy affiliate campaign.
Typically, incentive sites account for a high proportion of total programme revenue with sometimes as much as 80-90% of revenue being generated from what are deemed the top incentive sites. Whilst this constant stream of revenue is what a top performing campaign requires, it is also very risky. Please see some important points for consideration below:
- What happens if a top performing incentive site decides they don’t want to feature your brand anymore?
- What if the affiliate site faces internal issues that affect performance?
- What if your competitors are aggressively advertising on these sites?
- What if the top performing sites receive a Google slap and performance drastically decreases?
Whilst you may be fortunate enough to never encounter these problems, the above are some examples of what needs to be taken into consideration to pre-empt and minimise possible future risks to your campaign.
At DigitasLBi, we always stress the importance of a balanced affiliate mix and in particular an ‘ideal’ 50/30/20 mix whereby the top, medium and long tail affiliates are all worked with to ensure there is no over-reliance and that each tier is growing in conjunction with the client’s specific key performance indicators - whether this be through incentivising or an increase in personal, engaging communications with the affiliate base.
However, as those who manage accounts on a daily basis understand, this can be very difficult to achieve and is increasingly the exception rather than the norm. Many clients and affiliate managers are happy to continue to grow incentive reliant programmes as this is where the quick wins are – however for a long term sustainable strategy, much more needs to be taken into consideration. Some of which are highlighted below:
1. Is Your Campaign Monetised at Every Point Through the Customer Purchasing Cycle?
Take into account a campaign that follows the full affiliate behavioural and purchasing cycle. Where can we influence the customer and how much can this be controlled through a CPA model? Having an overall multi touch-point approach will instantly reduce the reliance on a single aspect of the campaign. There are many solutions in the market that can help with this such as pre-targeting, re-marketing and re-targeting. These activities will reduce the reliance on incentive sites and also reduce any leakage possibilities from affiliates to other channels.
2. Be Aware of the Long Tail
It’s difficult to justify spending significant time optimising the long tail of a campaign when the direct revenue output is not always noticeable. Whilst this is generally the case, you should definitely be aware of the long tail and keep them engaged with the programme and the brand. Individually, these affiliates will drive a small amount of sales, but collectively, they will contribute a significant amount and reduce the reliance should a top incentive site under perform.
3. Affiliate Recruitment/Re-engagement
A well planned and implemented recruitment strategy can also help reduce the reliance on incentive sites as this will give you the opportunity to build out the aforementioned long tail of affiliates who will contribute to the overall pot of revenue. With the correct engagement and affiliate communications strategy, you can nurture these affiliates into mid and top tier affiliates over time.
4. Educate the Client
One reason an incentive reliant programme occurs can be due to an eager client who has their sights on the short term revenue prize. Whilst many clients understand the affiliate channel, others will need to be shown why it’s important to spend time to develop and grow the whole affiliate mix and not just run incentives to drive short term revenue wins.
5. Build Out a Plan for Your Top Affiliates
The exact amount involved in this will vary by programme, however it’s still important to put a plan in place to keep top affiliates engaged and keep your brand at the forefront of their minds. Ensure you do not rely on the same handful of affiliates to constantly run promotions with as you will potentially saturate the programme. Set up an incentive calendar and offer top affiliates an opportunity to show what they can do with an increased CPA or voucher code for example. Use the calendar as a stringent guide and analyse the data so that effective promotions can be revisited tactically.
6. Finally, Understand the Importance of Incentive Sites
“We would have got that sale anyway” is a common misconception and one that has been argued meticulously throughout the industry. On top of ensuring a balanced mix of affiliates, incentive sites are still likely to be the key revenue drivers and contrary to misconceptions, can drive new customer sales throughout their own loyal communities.
Whilst these are just a few things to consider, these pointers are a guideline of what needs to be taken into consideration in order to reduce the over reliance on incentive sites. Constant reviewing of all data available is key to understanding where your revenue is being generated and what actions need to be taken to get as close to the perfect affiliate mix as possible. Clients, agencies and affiliate networks should be taking all of this into consideration so that your affiliate programme is less prone to risk. Engagement with medium and long tail affiliates will result in them becoming top/medium sized affiliates; time spent on this will result in a sustainable programme.