INside Performance Marketing
Is Concentration Setting Your Affiliate Programme Up for Trouble Down the Road?

Is Concentration Setting Your Affiliate Programme Up for Trouble Down the Road?

Whether it’s managing your mutual fund, a customer portfolio, your fantasy football team, or your affiliate marketing programme, one core approach holds true: the importance of diversification. 

It may sound trite, and perhaps even counterintuitive, to prospect new affiliates when your current ones are performing. You’re probably thinking, “If my top 10 affiliates are killing it with new customer sales, why would I look for new ones?”

While this will work in the short run, if you primarily rely on your top 10 affiliates for almost all of your revenue generation, your programme is at risk due to changes in the marketplace or in your partners’ business models. These risks include customers moving to mobile, SEO changes, moving from CPA to PPC, and competitors going direct with higher commissions.

To have a successful affiliate programme in the long term, it’s vital that you consistently prospect, evaluate, and recruit new and diverse publishers by leveraging a variety of strategies, technologies, and resources.

Focus on brand-aligned partnerships  

It’s common for merchants to have nine of their top 10 affiliates be loyalty, toolbar, or coupon sites. While these can be effective and productive partners, it’s not ideal for everyone to have the same top 10 - it probably means you’re missing out on more targeted vertical publishers. For example, a wedding merchant probably shouldn’t have the same top 10 affiliates as a sporting goods merchant, yet this is frequently the case. 

By relying solely on large-scale mass-market affiliates, you miss out on valuable partners in your specific industry or niche. A better strategy is focusing on partners by vertical and type, including bloggers, platform tools, mobile, shopping sites, and relevant content sites. Relevant content affiliates allow you to connect with a new audience of interested potential customers, ensuring you aren’t overly reliant on a handful of affiliates. 

The smoke and mirrors of coupon sites

Many loyalty and coupon sites only look like they’re bringing in a lot of revenue - in reality, this is often revenue that the merchant would have received regardless. This situation frequently stems from people abandoning their shopping carts midway through a purchase to look for a discount code. The merchant then has to pay this affiliate for revenue the brand would have already received.

Content affiliates and bloggers often do a better job of connecting with new customers who may have never heard of the brand or made a purchase, and the revenue they bring in tends to be more incremental.

Relying on a small group of affiliates is also dangerous because of how quickly circumstances can change. Whether the decision is yours, the affiliate’s, or mutual, the end of a working agreement can drastically and suddenly reduce your bottom line. For instance, when Google released its Panda update, programmes that relied heavily on coupons for brand traffic lost tremendous amounts of revenue. Some of the larger fashion sites disrupted affiliate traffic when they switched their focus to PPC away from affiliate.   

Be picky with prospecting

There are millions of publishers out there, but many just aren’t going to be a good fit. Set high standards for what you expect from an affiliate, and dedicate at least one in-house person to publisher development. This person should have the know-how to find prospective publishers and determine who would be a good fit for the merchant - and who would not.  

A good example of a brand that did this well is Tiny Prints, a part of the Shutterfly brand family that my company works with. When the brand moved into the affiliate space, it set itself up for continued success by excluding generic loyalty and toolbar affiliates, being selective with its brands, focusing on attribution to ensure fair payment, and dedicating a small team of full-time employees to the programme.

Tap into technology

Technology is changing the affiliate space, just as it’s changing the whole marketing industry. Mobile, for example, is creating new partnership opportunities and new types of affiliates. In order to remain relevant, programmes need to adapt and seek out these partners as they tend to be on the cutting edge of new online marketing industries.

Plus, effective publisher development simply requires many different tools. For instance, advanced CRM tools are essential to evaluating new opportunities, cultivating relationships with publishers, and growing individual publisher performance. Without them, you can’t properly evaluate a publisher’s website traffic to see which publishers are promoting through which networks.

See how it stacks up

Once you identify a potential publisher, it’s important to evaluate its approach — from opportunities offered to its capacity to generate sales. Look at every possible metric, from newsletter subscriber size and blog reach to number of social media followers and web traffic volume. It’s also essential to connect with publishers to understand what they do to promote their merchants. Gaining this deep understanding of their efforts requires extensive research, as well as direct phone calls and emails to the publishers. 

The simplest answer to why you should recruit more affiliates is that the more publishers there are promoting your products, the more money your programme is going to generate. Expanding your affiliate portfolio may seem like a long and arduous process now, but when the time comes that you need a bit of diversity, you’ll be glad you didn’t sink all your capital in the same stock.

Robert Glazer talks to PerformanceIN about global affiliate programme expansion at PMI London 2015:

Continue the conversation

Got a question or comment – tweet Robert @robert_glazer or comment on Twitter, Facebook or LinkedIN.

Robert Glazer

Robert Glazer

Robert Glazer is the founder and managing director of Acceleration Partners, a performance marketing agency focused on profitable online customer acquisition for high-growth consumer businesses. Representative clients include Target, Tiny Prints, adidas, Reebok, ModCloth, The Honest Company, Blurb, Stella & Dot, Warby Parker, Rent the Runway, Tea Collection, and Gymboree.

Read more from Robert

Related Articles

Join over 10,000 performance marketers for the ultimate weekly update on industry news