Looking for a Few Good Affiliates

January/February 2008 Issue: Page 54

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Many are trying to overcome the affiliate recruitment conundrum with fresh approaches and new tools.

Linda Woods, CEO of PartnerCentric, an outsourced affiliate program management group, says that affiliate recruitment is the hardest thing affiliate managers have to do.

"There is no software that spits the names of affiliates out," she says, adding that there is no easy way around the arduous process of finding, meeting and building a relationship with the appropriate affiliates.

The process is time-consuming and multifaceted, and the AffStat 2007 Report confirms that recruiting is definitely an issue for affiliate managers. Nearly one-third of respondents said their biggest challenge is recruiting new affiliates. And even when affiliate managers do find the right affiliates, it does not mean they will join or implement the program actively.

When researching affiliates for their programs, managers should apply common sense regarding the products' audience and industry. For example, Woods says that an affiliate manager for a high-fashion merchant should not look for coupon or discount affiliates (because they can cheapen the brand). Instead she suggests they look to loyalty/incentive sites, such as MyPoints or UPromise, which do well with big brands.

However, loyalty affiliates are a hotly debated topic in the industry. While some affiliate managers find them useful in helping with repeat customers, others question some of their practices. Many claim they often override or subvert other affiliates' IDs, which results in affiliates not being credited for sales, commissions and leads.

The conventional wisdom behind recruiting affiliates has been that merchants should focus on the top-performing affiliates that fall within three concentrated categories: incentive/loyalty shopping, coupon/deal sites and search. For this reason, there are top-heavy programs, with a small group of affiliates representing a huge majority of traffic.

Unconventional Wisdom

But David Delisle, principal of The Partner Maker, a contact management and recruitment system developed specifically for the online marketing community, believes the "focus on the top affiliates" approach has done more harm than good for affiliate marketing. That's because top producers are continuing to break away from being compensated as CPA affiliates (on pure revenue share). These affiliates are compensated for access to their audience, which consists mostly of repeat customers.

The result is that affiliates like eBates, Upromise and MyPoints look and act more like media companies than affiliates, Delisle explains. If merchants are interested in new-customer acquisition, they should be weary of these types of affiliates.

Delisle points out that when merchants focus only on the top-producing affiliates, they are ignoring the rest of the Web, and recommends marketers shift gears and pursue smaller affiliates in order to tap into the long tail.

The amount of smaller affiliates is positioned to grow, because today virtually anyone who uses the Web has a means to become an affiliate, with tools like PopShops – a product catalog "research tool" where affiliates can find relevant products to their niche. It allows an element of discovery based more on relevant inventory to an affiliate's niche and less on criteria such as commission structure.

Angel Djambazov, marketing and business development manager of PopShops, says that an affiliate manager can use their PopShops product catalog as a recruitment tool to gain new niche affiliates by seeing the activity within the tool set among certain products.

The emergence of social networks offers another way for affiliate managers to recruit affiliates who are ambassadors of their brand. CEO of Molander & Associates Jeff Molander says This- Next and Stylehive are social networks that focus on the discovery and sharing of new items and offer marketers an upside that is "tremendous and untapped."

Molander says marketers need to understand some products work better than others for social media strategies because they are natural fits for the "word of mouth" or "wisdom of crowds" models. For example, Wine.com's community site works well because people buy wine using recommendations, and Patagonia's community site is effective for its "highly conscious" consumers. But for a retailer like Gap, a social networking model could be less compelling, Molander explains.

Networks as Necessity

Another way to find affiliates for a program is through networks such as Commission Junction, LinkShare and ShareASale, because the networks can offer exposure to lots of affiliates and provide a wide reach.

But PartnerCentric's Woods points out that "reach" is a misleading word – "what they have is a pool of affiliates, which is better than nothing." Woods says most inexperienced managers rely on networks to find affiliates, but there are problems with this strategy. For one, some networks only promote new programs in front of affiliates one time, such as in a newsletter mention. The rest of the time the program is simply listed as a text link within a category.

Another problem is that networks list programs by performance – so a new program is ranked at the bottom because there is no performance data, such as the earnings per click (EPC), until the data shows up, which can take up to three months. If an affiliate is choosing a new program from a category, they will select the one that offers the most potential.

Linda Buquet, president of 5 Star Affiliates, an affiliate marketing consultancy, says another consideration is the 95/5 rule, which means that only 5 percent of the affiliates pulled from a network will be productive and active. And once these affiliates are recruited, to a large degree, they still require hands-on personal contact.

Affiliate managers cannot be dependent on networks, and Molander warns that affiliate managers cannot recruit affiliates by plugging into a network and walking away, because that strategy leaves money (affiliates) on the table.

Although networks are not in Roger Snow's top three ways to go about finding affiliates, the director of marketing at Snow Consulting, says there are advantages. Networks are beneficial because they allow managers to use keywords to target specific affiliates as well as for starting programs because they announce the program to all affiliates.

Once affiliate managers launch their programs, they have the challenge of proactively building and retaining their publisher base. Networks can help affiliate managers who do not possess the business development and affiliate marketing skills necessary with these early recruitment tasks.

Depending on their vertical and brand, merchants must understand the overall online marketing landscape and whether or not a performance-based relationship will result in sales/leads. Kerri Pollard, general manager of Commission Junction, explains that Commission Junction has built a successful publisher sales team and sales engine that helps with this time-consuming work.

Another reason to work with networks is they can provide an affiliate manager with background regarding the ranking and quality assessment of a publisher. Continued on Page 2...

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