Dealing with Affiliates

Mar 19, 2008 - 5:11 pm 1 by

Jeff Rohrs of ExactTarget is moderating, and he introduces the first speaker Kris Jones from Pepperjam. Dealing with affiliates from an affiliate network perspective. Your Affiliate (aff) Network should stand as a resource to help you with understanding who your affiliates are (transparency) and how to identify and address channel conflict.

Four primary potential channel conflicts: direct linking, Trademark (TM) bidding; bidding on same keywords as you; promoting conflicting marketing messages. Direct linking occurs when an aff uses an aff tracking URL as the destination URL for PPC purposes instead of sending traffic through their own unique URL and landing page. Unfortunately for you, Google does not provide protection from this, so you must learn the rules to minimize. There is at least an easy way to determine if direct linking is occurring. How do you know how to see this? 3 step process. find advertisement, right click it, and observe properties.

Direct linking: learn the rules. Google only delivers one advertisement per unique destination URL per search result. This means that if your aff is direct linking, they may be the only one shown. Second conflict is TM Bidding. For many of you this is a serious concern, and you therefore include it in contracts as being not allowed. For those not preventing this, you may want to do so.

Third conflict is competing for the same keyword. Many advertisers complain that SEM affs run up the pricing for the same keywords the advertiser is trying to bid on. This is only true if the advertiser doesn’t have specific rules in place. Before you put a no PPC policy in place, realize that the search engine result pages represent available real estate for you and your competitors.

Final conflict is if your message is inconsistent with the one that affs present. Conflicting messages can occur with inaccurate products info, non-authorized banners/text links being used, etc,. He finishes off with a quick summary and repeats the 4 major factors.

Minimizing channel conflict methods: send a request to Google to disallow use of TM’d terms in ad copy. Amend your affiliate contract with a “no direct linking” or “no TM bidding” policy. Be very specific about what search affs can and cannot do.

He believes that one of the keys to decreasing overall conflicts is to increase transparency. Less is more, quality is better than quantity. Having insight into the exact sites you will be working with is much better. He finishes with some hints on how to make the aff channel work, which I unfortunately missed but maybe he will come in and post in the comments.

Next speaker is Jeff Molander from the Partner Maker. He apologizes that he will speak very quickly but he has a lot of info to cover. His argument is that “Yes, you should integrate affiliate and Internal SEM” and “No, TM usage rules are not the answer.” Everyone can win: think strategic and not tactical. There is too much focus on the TM issue he feels. Why are we even still debating it? There has been a failure to talk honestly about some of the strategic issues involved. The answer is a strategic realignment, and there is no gain without a little pain.

What marketers want: increasing incremental sales, decreasing double counting and wasteful spending. Less competition for customers in spaces they understand. The path to success is first audits, then new rules, then a strategic realignment.

What is an incremental sale? Simple answer is one that the advertiser would have had “no shot at” w/o help of third party media. Happy to pay for $$. More specific answer is that it relies on aff spending with mostly native traffic.

What is forcing the issue? The big guys that use TV, catalog, advertising, etc. Hence the Trademark issue has been pursued. The cause is not TM infringement. The cause is that marketers are measuring referrals beyond referrals.

55% marketers making 25%+ of sales from PPC and SEO. 29% make 50%+ of sales w/SEM. Forcing new questions…what do I want from affs? What have I been getting lately? Is this acquisition, retention, or both? he had spoken just before I tried to catch the stats above about how there is a difference between new customer acquisition (new to file) and a past customer coming back to the site through an aff link.

He talks about the strategic realignment need and defined it. Marketers need to firmly grasp what “good affiliate” means: using strategic goals and targets to find out what is new-to-file customer ratio; what order volumes; cost per order or lead. Assess this information and optimize your campaigns.

Tactics for marketers – need to make trench level change and perform routine transaction/action level reconciliation as needed. Get dirty, but get smart! Use a business analyst for this. State goals clearly up front in writing. state them clearly, repeatedly, and make them easily accessible. Show respect to affs and publishers.

What is needed? Strategic realignment. Affs/publishers should convert from a “traffic-shuttler” to a “traffic-seller.” You need as an aff to realize that you need to build a relationship. You have to go to conferences. Know what you are selling and sell it well. You are in business now, so marketers expect you to act like one. He also states that arbitrage is all but dead.

He had to rush through his last few slides because he ran out of time. He advocates getting flexible with payments, for example on a repeat sale from an existing customer versus a new sale.

The last speaker will be Jeff Ferguson from Napster. He gives and overview of Napster, and then introduces that he will be presenting some information of affiliate marketing from the client side. What better way to show how to make nice with your affiliates than using “politics and war.” He will be using analogies along these to help illustrate. In the beginning it was regimented management of affiliates in the “Dictatorship Era.” Very little growth came out of aff during this era.

Next was the “Highland Charge” which was when a bunch of unruly Scots would line up and look crazy to try to psyche out the competition. Napster got tired of competitors and other music entities buying up “Napster” and other branded keywords. They allowed the aff to start doing that and it was an interesting era in terms of results.

Next was the “Laisser-faire” era when aff and search “came home.” It was Napster’s brave move of shutting everything down and rebuilding it piece by piece. They stopped using search agencies and bought aff in-house as well. They hired people that would work well together and help to improve their system. They essentially allowed affiliates to do what they wanted. The results where that the aff program tripled in size. the SEM program eroded AP results, slightly, but the sum of the two programs was greater than its parts.

Last era is “fiscal conservatism,” or “last man in,” which came along with some new bosses at Napster. They were getting tired of paying for branded visits as they let the brand was strong enough to stand on its own. So they kicked out a bunch of affs and let people who would play by the new rules stay. They wanted to make sure that if people came in through those terms that they were identified. They don’t have results yet.

In the end, a balanced plan exists. They liked a lot about each of the eras, and have found the right mix to run their program.

This is live blogging coverage of SES New York 2208, so some typos or grammatical errors exist. Panelists or other attendees are encouraged to comment below to share any inaccuracies, and to help fill out the rest of the story.


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