Why your Affiliate Program Needs Protection
If the wrong affiliates get into your affiliate program, you could find yourself faced with the unpleasant consequences of fraud.  Fraudulent affiliates can be costly, and manifest in a number of ways:

• Stolen credit cards can be used to make purchases on your site after clicking through their own affiliate links
• Traffic can be stolen from rightfully-referring affiliates
• Spamming
• Bots can be used to generate fake clicks or leads for your site

You also want for your brand to be represented in the manner in which you have chosen to represent your business. Allowing an affiliate with questionable content on their website, or even one with a poorly designed site, can cause associations with your brand that affect it negatively.

It is in your best interest, then, to do what you can to guard against these events. One of the first steps you can take is at the affiliate approval stage.

The Basics: The Application Process
When starting an affiliate program, the natural inclination is to get as many affiliates on board as quickly as you possibly can. As with any other facet of business, merchants should be mindful of the trade-off between quality and quantity.

As a merchant or affiliate manager, you are ultimately looking to attract super affiliates-i.e. the cream of the crop. Of course, you don’t want to refuse an application from a novice affiliate who is legitimate, as it is today’s novice who may eventually become tomorrow’s super affiliate.

The Affiliate Approval Process: What to Look For
The vast majority of affiliate applications will generally come from people who genuinely want to promote your product or service. However, some may be would-be fraudsters. The sooner you can intercept these individuals, the better – and the earliest possible opportunity is when you first see their applications.

At this juncture, you can use the information that the affiliate has entered when signing up to your affiliate program, including name, address, email address, and payment information.  Affiliates who aren’t well-intentioned tend to follow specific patterns when filling in this information. At Share Results, for example, affiliate applicants are subjected to a 7 step process before being accepted in our network.

Essentially, account details are cross-referenced with payment details and WHOIS (link) records for any incongruities. Then the affiliate’s site is screened for adult content, language, and to ensure that it’s operational. Should any incongruities exist, the affiliate is contacted directly.

Only after all account information is verified as legitimate is an affiliate admitted to the Share Results network. Once an affiliate is approved, retailers then have the additional choice of whether or not to accept an affiliate into their own program.

Each of these items can be reviewed using manual checks, comparing data entered in different parts of the affiliate’s profile, and calling up the WHOIS record for the domain in question.  This process can be time-consuming, however, so to make it easier for affiliate managers and merchants, the Share Results Affiliate Network actually undertakes this task for them.

In our next post in this series, we will take a look at the Affiliate Verification Index used in the Share Results affiliate marketing software solution to calculate a score to help you find the best affiliates for your program.

An affiliate program should be tailored so that it serves the needs of your business model, and not the other way around. A good benchmark is to achieve 30-40% of your online revenue from affiliate programs. If you start going beyond this benchmark, then you’re on the verge of taking on more of an affiliate role, and less of a merchant one.

Given that, you might then ask yourself what your retail philosophy is and then establish your priorities. It is good to have a clear idea of why you chose affiliate marketing and what kind of affiliates you are looking for as partners. Depending on how you answer these questions, chances are your philosophy
of affiliate marketing fits into one of three general categories.

Big Spender
Some merchants seek quick results, and are not afraid to put out the expenditure to get those results. They generally work with ‘super affiliates’ in an effort to maximize results quickly and create some buzz around their affiliate program. You’ll often find these merchants at industry conferences, and sponsoring parties at these events to educate affiliates about their program.
They often spend significant amounts of money to get the top-performing affiliates into their affiliate programs, and do so by offering high commissions, gifts and plenty of other incentives.
These programs can deliver results quickly. They also make it costly to maintain relationships, and your program may end up relying on just a few choice affiliates.

Relationship Focus
For brands that are looking for more of a longtail approach, building relationships is key to this strategy. Ensuring that affiliates have the right tools and all of the resources they need to effectively promote your products helps them to become better affiliates, which, in turn, increases your brand awareness and your profit margins.

These kinds of programs concentrate on reaching out to affiliates to give them support and guidance, as well as providing them with marketing tools, like banners and widgets.

A measured approach is sometimes used, in which trial periods can be utilized to evaluate an affiliate’sperformance. Once top performers are pinpointed, they are rewarded with better commissions. To do this, you will requirean advanced affiliate marketing software solution to track these metrics, and obtaining this type of software will also help to maintain the faith that affiliates have in the program.
Although your results may be somewhat gradual, creating relationships with your affiliates will help to provide better stability and a wider base of loyal affiliates.

Necessary Evil
Some merchants see affiliate marketing as a necessary evil. Their competitors are doing it, and it’s really just another sales tactic. When it is seen this way, little to no relationship is made with affiliates and they generally end up being viewed as freelance salespeople.

As a result of this, these programs have simpler commission structures that apply to all affiliates, with very little support and basic affiliate tracking software. While they require very little overhead, this approach makes it difficult to build a presence in the community, and especially difficult to attract super affiliates.

The Bottom Line
Affiliate marketing is a cost effective way to drive online sales. There are so many products and services available for sale on the Internet it can be difficult to make your mark in this marketplace. Shape your business model with this in mind and, consequently, your etail philosophy.

Your affiliate program should be shaped with that philosophy in mind. Without matching these two aspects of your business model, you’ll constantly be struggling to make one match the other, and may end up getting frustrated by the entire process. So, before attempting to establish the direction of your affiliate program, make sure to closely examine those original four points I brought up earlier:

* What is your retail philosophy?
* What are your priorities?
* Why did you choose affiliate marketing?
* What kind of affiliates are you looking to partner with?

Armed with the answers to these questions, you’ll be ready to create an affiliate marketing strategy that’s just right for your business.

No matter how attractive your commissions are, the software that powers your affiliate program can make it or break it. Affiliate marketing is a symbiotic relationship between advertisers and publishers, so the software behind that relationship needs to support the needs of both parties.

One key software feature, for example, is being able to provide in-depth tracking reports for both affiliates and merchants. This allows both parties to optimize their respective marketing efforts and get the most out of the relationship.

Not only should affiliate marketing software accurately track all conversions, but it should also have an array of functions and features that allow you to efficiently manage your various kinds of affiliates and product promotions. Basically, a piece of affiliate marketing software should offer both comprehensive analytics and enhanced program management features:

1. Comprehensive Affiliate Reporting

To best analyze your campaign performance, you’re going to need information on affiliate traffic, conversion rates, revenue, and commissions. You will also want to be able to run specialized reports that let you easily monitor account balances and transaction details. Being able to group these reports according to factors such as month, affiliate ID, or transaction will also enhance your data analysis.

2. Customizable & Brandable

If you’re going to white label an affiliate marketing software solution to set up your own standalone affiliate program, then that software needs to reflect both your brand and your business model.

On the customization side, you should be able to control what functions, features, and fields are available to which affiliates. On the branding side, you should be able to skin it to reflect, well, your brand.

3. Advanced Marketing Tool Support

For your affiliate program to succeed, you need to help your affiliates succeed by offering them pre-made marketing materials such as banners, text links, datafeeds, and HTML mailers.

Being able to also group marketing tools into banner groups that point to specific landing pages will optimize the process: it will increase conversions which mean more sales for you, and more commissions for affiliates.

4. Flexible Commission Structuring

The software powering your program should be able to handle a variety of commission structures so that you can retain your top-performing affiliates. Whatever software powers your affiliate program should be able to provide for hybrid commission structures, product-specific commissions, and special commission groups.

5. Solid Tracking and Transaction Processing

If you’re going to enjoy real-time tracking, you’ll need a combination of cookie and pixel tracking is necessarily. This will both prevent fraud and support your tracking reports. Your affiliate managers should also be able to review and approve/decline transactions through the software.

6. Sales Driving Software

Like any online initiative, an affiliate marketing campaign is only as effective as the technology behind it. The software you choose to run your affiliate marketing program not only has to track conversions and provide analytics, it also has to be usable for both you and your affiliates. After all, if you’re spending too much time trying to make sense of whether or not an affiliate program is worth it, it’s probably not.

Conclusions

Affiliate marketing can offer one of the safest online marketing solutions for ecommerce merchants. In this four part series, I’ve gone over how:

1. The medium has definitely evolved into a mainstream marketing channel.
2. How affiliate marketing can safeguard your ROI and better target consumers.
3. What you need to look for in an affiliate network.
4. The features that solid affiliate marketing software should possess.

• Drive online sales at a lower risks/costs than impression-based or cost-per-click advertising: and
• Better target the right users at the right time.

This time around, I’m going to look at some considerations you need to make when choosing an affiliate marketing partner/service-provider.

There are two ways you can approach setting up an affiliate program:

1. You can join an affiliate network, or
2. You can white label affiliate marketing software and set it up yourself.

Each of these approaches have their advantages. Before advertising your products on an existing network, however, you need to weigh your brand and range of product offers against that network and its model.

Size and Scope of an Affiliate Network

The first thing you should consider when looking into partnering with an affiliate network is its size and scope.

While some affiliate networks are very broad and feature every kind of product and company, others are narrower in scope and specialize in specific product verticals.

If you set up your affiliate program through a broader network, you will probably get access to many more affiliates and your campaign can get much wider reach. However, it will be more difficult to find the right affiliates with the targeted traffic to promote your product.

On the other hand, setting up your affiliate program through a network that specializes in a specific vertical will make it much easier to find affiliates experienced in that niche. If you have a diverse range of products to promote, however, a specialized network might limit you from offering other products through that same affiliate program down the road.

Affiliate Account Support

Another thing you need to consider when choosing an affiliate network is the community behind the network. Some affiliate networks are more self-serve oriented, others are more relationship-focused. This impacts both the level of support you get as an advertiser as well as the kind of affiliates you get access to.

Relationship-focused affiliate networks will often focus on affiliate recruitment, campaign promotion, and technical support for advertisers as well as account management for affiliates. Niche content publishers value these relationship-based networks; consequently, the affiliates on these networks tend to be more interested in long-tail and niche promotions as well as developing long-term relationships with the merchants they promote.

On more self-serve style networks, you’re more likely to come across affiliates whose content is broader and more general sites. These broader-appeal affiliates tend to be driven by commission structures rather than merchant relationships. These are often better suited for brands with a very vast array of product offers or regular seasonal promotions.

For instance, a department-store-style merchant might benefit more from a self-serve network. However, a merchant that is advertising focused product offers such as only women’s wear, only sports equipment, or only electronics might benefit from working with a network that focuses on helping affiliates monetizing their niche content.

A final consideration you need to make is technology: what kind of software is powering the network, and how can it help you reach your marketing goals? This last consideration is sufficiently important that we’ll discuss it in its own post next time.

• Online retail is getting a lot more competitive;
• Affiliate marketing is a relatively low risk (i.e. cost) way to maintain a competitive edge; and
• The medium is a much more legitimate online sales strategy than some perceive it to be.

In this post, I’ll elaborate on the second point and discuss how affiliate marketing is an online sales/marketing strategy that is based on results

Why Affiliate Marketing

The two most important part of any marketing campaign is that:

• There is a way to measure results (ROI); and
• It targets the right demographic.

Since affiliate marketing is a performance-based model, it does both rather well because:

• You only have to pay for ads when they actually convert into a sale; and
• It allows you to target the right audience when they’re in the right mood.

Pay Only for Performance

To recap: through affiliate marketing, merchants/advertisers deploy their ads through a network of affiliates. Affiliates in that network who are interested in promoting that product place those ads on their site.

If a user clicks on an ad, a cookie is used to track them over to the advertiser’s site. If the user ends up making a purchase, the affiliate gets a commission on that sale. If the user doesn’t purchase anything, there is no cost to the advertiser.

In this respect, affiliate marketing is like tapping into an army of freelance salesman that work only on commission. Even if shady affiliates are advertising your product, it’s not going to cost you to advertise on their site.

Better Targeting

Because affiliates only get paid when their ads convert, the affiliates that are going to promote your product are going to do so because they have targeted traffic. In other words, they are already running sites with content that’s relevant to your product line.

For example, if you’re a cloth diaper retailer with an affiliate program, I, as a content publisher, will only join your program if I have family-oriented traffic. If, on the other hand, I have adult or sports traffic, I don’t stand a chance at making a commission through your ads because none of my users are going to click on your ads.

Consequently, your ads are distributed according to user-demographic and mindset/mood. Users on affiliates’ sites are only there because they are actively interested in your type of product at that moment.  It’s like you’ve got hundreds or even thousands of tiny, highly-targeted boutique sites on the internet aligning your product offering with relevant content.

One of the things that has made affiliate marketing a popular and smart choice for product marketers recently is the rise of blogging.  A number of bloggers are looking for ways to earn money for their efforts.  By placing affiliate ads on their highly targeted niche content, they have a low-effort/potentially high-value way to earn commissions.

Choosing the Right Network

Of course, just as every retailer has its own business model and range of product offerings, so does every affiliate network. Although most any affiliate network will likely welcome you in, that doesn’t mean that they’re going to connect you with the right affiliates to promote your product.

There are a number of other considerations you need to make when shopping around for an affiliate network, I’ll be taking a look at what those considerations are in my next post.

With growth, however, comes increased competition, so it’s going to that much more important to step up your online marketing campaigns and target them better. One of the ways that an etailer can do both of these without breaking the marketing/advertising budget is through affiliate marketing.

Basically, affiliate marketing is an online advertising medium that doesn’t cost you until an ad converts into a sale. Through affiliate marketing, you deploy your ads through a network of affiliates. Affiliates in that network who are interested in promoting your product place those ads on their site. Then if a user clicks on an ad and subsequently makes a purchase, the affiliate gets a commission on that sale. If the user doesn’t purchase anything, there is no cost to the advertiser.

It’s like recruiting an army of freelance salesman who work on a commission-only basis. Consequently, it comes with relatively less risk than impression-based or cost-per-click advertising campaigns.

A Brief History of Affiliate Marketing
Now, even though the online medium is over a decade old (and the technology has been evolving for just as long), affiliate marketing has always been the red-headed stepchild of online marketing. But now that even Google has launched an affiliate network (GAN), there’s just no way to ignore affiliate marketing as a legitimate and credible online marketing channel.

Basically, when Google acquired DoubleClick, they also got the company’s affiliate ad network program called Performics. Only recently, however, has Google added the Performics affiliate network to its list of namesakes, giving both the network and the affiliate marketing medium as a whole an entirely new level of credibility.

You see, before GAN, the only major brand name affiliate network was Amazon Associates. None of Amazon’s brand name credibility trickled down to the rest of affiliate marketing, however, because Amazon was the only merchant advertising on the network.

Not only is GAN open to any merchant/advertiser, but Google has a name that’s synonymous with online advertising/marketing, performance, and analytics. Of course, even though GAN carries the Google name, it’s still the same Performics affiliate network which had many competitors.

In a word, GAN isn’t the only kid on the blog, and for good reason: just as different conventional ad networks are better suited for different brands and their product offerings, there are different affiliate networks for different business models.
When pursuing affiliate marketing as an online sales strategy, then, you have to consider:
• How the medium can increase your revenues and add value to your business;
• What your business model and resources; and
• What kind of support you’re going to need from an affiliate network to make your affiliate marketing program work.

I’ll be elaborating on these three points over the next few posts, so stay tuned to find out how you can drive sales to your ecommerce portal through an advertising medium with a much more performance based cost structure than cost-per-click or impression-based advertising.

Online communities are all about interaction and building relationships. In order to engage members of communities, it’s important to first become a trusted member of that community. There are essentially two ways that you can go about participating in existing communities: direct engagement and indirect engagement.

Direct engagement may sound straightforward, but where it can get tricky is in the practical application. This is a kind of longtail strategy, because it is so imperative to build trust within that community. The best practice is to have someone acting as a brand ambassador who is a trusted member of the community, and to ensure that your products or services have some relevance to the community’s interests.

With indirect engagement, you’ll be working with third-parties who can help to increase your brand’s awareness in the community without arising suspicion. If you can get together with members of specific communities who wield a certain amount of influence, then you may be able to offer them opportunities to announce “sneak peeks” into products or promotions.

It is essential to maintain good relationships with these third-parties. With this in mind, never ask them to exploit their status or deceive them into doing so. A bad relationship with a third party can serve to hamper your efforts, instead of help.

The rewards are palpable for those who make the effort to create interest in their brands in specific communities. Let’s take a look at some stats (source):

• Community users remain customers 50% longer than non-community users
(AT&T, 2002)
• Community users spend 54% more than non-community users (EBay, 2006)
• Community users visit nine times more often than non-community users
(McKinsey, 2000)

As with every aspect of every successful business enterprise, trust is a key aspect, and relationships are what help to build that trust. Consumers don’t purchase products until a trust has been established, and social media can be a great way to establish relationships as a means of establishing that trust.

Using social media to accomplish this might take some time, but is worthwhile for anyone attempting to build brand awareness in these exciting new markets.

With more operators entering the market space and the reopening of Google adwords, there are plenty of reasons to get excited about online gambling in 2009 and beyond.

The annual report by Ernst & Young that analyzed the gaming industry said the economic downturn was bringing challenges to the sector, but that innovation in online gambling was still bringing in money.

Our own findings at Income Access have been overwhelmingly positive as well. This year alone (January-October), we have secured 28 new clients, compared to 19 new clients last year. That translates to a 47% increase and we still have more to sign up!

US consulting firm, Christiansen Capital Advisors, published an analysis of online gambling’s global scope earlier this year, which also supports Ernst & Young’s findings. Their figures indicated that our industry accounts for about $22 billion a year in global revenue, with $25 billion a year expected by 2010.

That is bright!

And it’s not as if the iGaming industry has not been thrown its share of curve balls over the last couple of years. The Unlawful Internet Gambling Enforcement Act of 2006, combined with the recession has brought many challenges to our industry. To bounce back unscathed, indeed prospering, is something we can all be proud of. It’s something we should be proud of.

And certainly, companies have had to make changes, and now more than ever, play their marketing cards right. They are more budget conscious and carefully measure their ROI on campaigns to focus more strongly on what works, and stay away from what doesn’t.

And maybe it was time for that anyway. To be smarter marketers, that is. Perhaps, if nothing else, these curve balls, this economic struggle have taught us an important lesson: be savvy, demand more; drive your success to ensure that the future for online gaming remains, indeed, bright.

Q: What is the most important consideration for affiliate marketing and the software that powers those programs?

A: The important thing to consider with affiliate marketing is that it’s really performance-based marketing. If it’s performance-based marketing, what a retailer/merchant or affiliate needs in terms of software is the ability to see accurate information. Accurate information can be measured in terms of which affiliates are promoting, or how a banner is converting. This can also be keeping track of what affiliates are doing.

Q: How can merchants keep track of affiliates?

A: Usually in a program, there is a percentage of affiliates that are consistently producing very good traffic, and there can be other affiliates that are producing a volume of traffic, that may not be as high quality. Looking at the metrics of a program is very important, and that includes being able to track a campaign from the clicks, to the conversions to the retention of the customers.

Q: Why is the ability to look at historical trends so important?

A: When a merchant has access to historical trends, they can analyze trends over a period of time, from season to season, or trends that occur from year to year—and this is crucial information. Also, merchants can see what affiliates have done in the past, and what they’re doing currently, which is also a powerful activation tool. This is not necessarily on a granular level, but definitely on a trend level.
At the end of the day the most important features of software that merchants should look for are transparency, accuracy and reliability.