Build Successful Relationships Within Your Affiliate Channel
Online marketing for merchants can be a complex business with many moving parts. One of the best ways to simplify it is to regard it as being built upon a few fundamental building blocks. George Hansen, director of sales and business development with Digital River, recently shared with us some key pointers to establishing and maintaining a successful affiliate channel.
Revenue Performance: Are there any particular macro-level trends that you see happening within online marketing?
George Hansen: The pay-for-performance model continues to grow in strength and, by providing measurability and ROI, it gives merchants the opportunity to build their online marketing investment. Online marketing removes much of the guess work from campaigns and provides executives with predictable returns on their investment.
RP: What do you think is the most important single tip for merchants to keep in mind when developing a performance marketing campaign?
GH: I call it the Four Ps of performance marketing: price, product, place, and promotion. You have to keep those four factors front and center. Many merchants have several prospective market segments that they can address. The key is to target your audience in a way that allows you to offer a compelling product, charge a competitive price and earn acceptable margins. Too often merchants focus on promotion or price while forgetting about product and place. The product offering should be structured to be as compelling as possible. Once that’s determined, then one can address the right mix of price and promotion. There are times to discount your product and there are places where you can sell it at full price. The most successful online merchants offer a variety of products and price points within their product line. They also have an active promotions calendar with regular promotional opportunities and work to ensure that their products are merchandised in the proper places to reach their target market.
RP: What are some of the common mistakes you see online marketers make?
GH: It is not uncommon to see websites that promote products with too little detail or sites that are proverbially a mile wide and an inch deep. These sites are usually very light on content and generally don’t add much value to the end user. A more successful and sustainable approach is to become an expert in your field and go an inch wide and a mile deep within your topic. Create unique content around your product mix to add value throughout the purchase process. The deeper you go into a niche, the more each of your efforts will build upon the other, ultimately adding value to your users and establishing you as an expert in your fi eld.
RP: What percentage of a merchant’s online business should come from the affiliate channel?
GH: The size of a merchant’s online affiiiate channel can vary greatly, but across the board we typically see affiliate marketing activities driving 10 percent or more of a merchant’s overall online revenue. Anything below that probably indicates that there are opportunities being missed.
RP: There have been big changes in the industry over the last year or two. What do you see ahead as you look forward to 2011 and beyond?
GH: Online marketers are in the great position to take advantage of the improving global economy and leverage it to generate positive revenue growth through the second half of 2010 and well into 2011. The pay-for-performance model within online marketing continues to resonate with merchants. It will still drive growth and profi ts for those that execute their online campaigns well and work with their network and affi liate partners to optimize campaigns effectively. We are also going to see online marketers discovering emerging market and revenue opportunities as e-commerce, social media monetization solutions and the mobile space grow. It’s a great time to be involved with performance marketing.
George Hansen is Director of Sales and Business Development at Digital River – oneNetworkDirect.
