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Affiliate Marketing
With New Tools Creating a New Sophistication |
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Written by Joe Dysart
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With New Tools Creating a New Sophistication
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| Tidy’s Flowers pays a 10 per cent sales commission on all business other websites sends its way. |
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| Another early adopter is Internet Florist, a Canadian/U.S. operation, which pays commissions ranging 16 to 22 per cent. |
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| Floraworld.com pays a flat $3/sale. |
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| Flowers Canada pays affiliates 10 to 20 per cent commission on all sales. |
Given the widespread success of affiliate marketing – the practice of paying websites to refer business to your own – it should come as no surprise that the latest generation of affiliate marketing software providers are quite serious – and quite effective – about bringing new customers to your site.
Indeed, what started out as a modest attempt to track and reward websites that sent sales and traffic to a particular business has become a full-blown industry. These days, the most sophisticated affiliate marketing solutions offer turnkey online solutions, along with a ready built network of websites that can refer traffic to your site.
Not surprisingly, there are a number of early adopters of affiliate marketing among Canadian florists. Tidy’s Flowers (http://www.tidysflowers.com), for example, pays a 10 per cent sales commission on all business other websites sends its way. And Flowers Canada (http://www.flowerscanada.com), (click “Affiliate Sign-Up” at page bottom), pays affiliates 10-20 per cent commission on all sales.
Other early adopters include Internet Florist (http://www.iflorist.com/en/act/ affiliate), a Canadian/U.S. operation, which pays commissions ranging 16-22 per cent, and Floraworld.com (http://www.flora world.com), which pays a flat $3/sale.
Popular on the Web nearly as long as the medium has existed, affiliate marketing really hit its stride in the late nineties, after the phenomenal success of Amazon.com. Amazon’s model was elegantly simple. Websites participating in its program put a hot-link on their sites that led to the Amazon.com website. If someone clicked on the link and bought a book at Amazon.com, the referring website owner would get 15 per cent of the sale.
Amazon was extremely diligent about paying its affiliates every month, and word spread quickly that its program was one that could be trusted. With nothing to lose, hundreds of thousands of website’s jumped on the bandwagon, and a new monster retailer was born.
“Look at it from Amazon’s viewpoint,” says Dr. Ralph F. Wilson (www.wilsonweb.com), author of the excellent downloadable e-guide, “Report On Affiliate Management Software 2005,” released in April 2005. “They attracted lots of interested buyers through the affiliate links – but only paid for this advertising if a sale was made. What’s more, once they had made a sale, they treated customers quite well, so next time the customer wanted a book, he or she would come directly to Amazon, and not through an affiliate link. And a predictable 15 per cent of their sales price was tied up in advertising costs. Sweet.”
What’s New?
Despite the fact that your mileage may vary, you’ll probably want to at least evaluate the feasibility of an affiliate marketing program for you site – especially if you’re already generating decent website traffic. Fortunately, given the success of affiliate marketing among some in the floral industry – as well as across most other industries – a wide spectrum of affiliate marketing service providers have materialized to service every major market niche.
A floral website that already generates significant traffic, for example, will want to seriously consider bringing its affiliate marketing software in-house, hosting the software on its own servers, and retaining complete control over how the program is implemented and maintained.
“When you buy the software outright and bring the program in-house, there’s no one between you and your affiliate,” says Maros Fric, owner of Quality Unit (www.qualityunit.com), maker of Post Affiliate Pro software. “You build partnerships, and your partners work for you. Your company is the one making all the decisions regarding your affiliate marketing program, and there’s no monthly maintenance fee to pay to a hosting company.”
Fric also says bringing a program in-house ensures that the speed, performance and reliability of your affiliate software is completely in your control. Plus, if your software is sold with the source code, your IT staff will be able to customize it for you, or you may be able to get the software maker to customize.
What to Look For
No matter which option you embrace, Wilson says any affiliate marketing solution should at least offer most of the following features:
• Essential Mechanics
Any solution should come with a customized Web page that your referral sites can use to sign up for your program. You’ll also want a password-protected section where referral sites can easily create links to your site imbued with their unique IDs. And you’ll want a password-protected area where you can perform the day-to-day administration of your affiliate marketing program.
• Flexibility
If you’re looking to get creative with your program, you’ll want a way to offer various commission structures to various referral sites, based on the performance of those sites, and your business relationship with each.
• PayPal Friendly
Since many referral sites prefer to receive payments to their PayPal accounts (www.paypal.com), you’ll want a module in your solution that enables you to easily and automatically pay these sites via PayPal each month.
• Ability for Search Engines to ‘See’ All the Referral Links to Your Site
Your site will rank higher on search engines like Google (www.google.com), if you ensure that your affiliate marketing software can be programmed to “show” all those links leading to your site. (Generally, the more links a search engine sees leading to a particular site, the higher that site is rated.) Tell your director of Web services to make sure your affiliate marketing solution makes referral links “visible” to the search engines.
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Fric’s program has received high marks from WilsonWeb’s Wilson, mostly for its high level of sophistication, ease-of-use, and ongoing upgrade policy. Indeed, buyers of affiliate software should be careful to verify a software maker’s update record, Wilson says. Otherwise, you could get stuck with a program that becomes obsolete in a year or two.
Meanwhile, if your site is not generating significant Web traffic right now, or your IT department is reluctant to support a new application, you may want to outsource your affiliate program. There are a number of online service providers that will do this for you by hosting the entire application on their servers. In many instances, such providers also offer a ready built network of websites looking to refer Web traffic to yours.
The advantage of such online providers is that virtually all the work of affiliate marketing is handled by the service provider. For a monthly fee, these firms track and monitor who is sending paying customers to your site, and also take care of paying for those referrals. Plus, many providers also offer a pre-established network of hundreds of thousands of website owners who understand affiliate marketing, and are looking to add new links to additional websites.
For smaller businesses looking for this kind of outsourcing option, Wilson recommends an online service provider like ClickBank (www.clickbank.com). “They charge a $49.95 set-up charge and 7 per cent of each sale – since they handle the sales process as part of their service.”
Larger companies looking for personalized service, flexibility in design, various commission structures, and part or full-time agents willing to work with companies to ensure their affiliate marketing is maximized, would do well to look to more robust providers like Commission Junction (www.cj.com); LinkShare (www.linkshare.com); Performics (www.performics.com); and TradeDoubler (www.tradedoubler.com), Wilson adds. “Typically, these vendors charge several thousand dollars set-up fee, plus a ‘network access fee.’ Then the merchant typically pays to the network vendor 25-30 per cent of the commission paid to affiliates.”
A third-type of online service provider, which Wilson calls a “hybrid,” offers a little of everything. Such service providers, including My Affiliate Program (www.myaffiliateprogram.com), offer online affiliate marketing tools, and the standard network of sites interested in adding links to businesses like your own.
The difference is these hybrids will charge you a flat, monthly fee – rather than a per commission fee – for access to their network of affiliate sites looking to link to websites like yours. “Typically, these networks are smaller than the commission-based companies because their networks are newer,” Wilson says.
While virtually unbeatable if you’re looking to create an affiliate marketing program overnight, all of these full-service online service providers represent a disadvantage if your company’s long-term goal is to create your own network of referral sites.
The reason? “While they provide a ready-made pool of affiliates, most network vendors ‘own’ the affiliates,” Wilson says. “If you decide to leave the network vendor, relationships with all the affiliates are abruptly ended.”
Fortunately, florists willing to invest some time and money developing their own network of referral sites – but still do not want to host the software in-house – can turn to online application service providers who simply provide the affiliate marketing software infrastructure, and nothing more.
Essentially, with these solutions, you’ll be able to bring new Web referral sites on board, and get those site owners paid for their referrals. The difference here is that under this scenario, finding websites interested in steering potential customers to your site will be your responsibility. Such barebones online service providers “typically charge a monthly fee of $25 – $50, and sometimes a set-up fee – though many charge no set-up fee at all,” Wilson says. EcomMagnet (www.ecommagnet.com) offers this kind of service.
Joe Dysart is an Internet speaker and business consultant based in Thousand Oaks, California. Voice: (805) 379-3673.
E-mail:
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Web: www.joedysart.com.
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