Visibility

Affiliate marketing as an avenue of advertising and driving sales was pioneeredby CDNow in the early 90’s, picked up by Amazon.com in 1996, and today over 75% the businesses on the Internet Retailer’s “Hot 100 Retail Web Sites” run successful affiliate programs. It is a quickly growing industry which is becoming one of the most attractive marketing channels for online merchants. Affiliates are paid solely on a performancebasis, and merchant investments are often minimal. 

The fact that affiliates are being remunerated only when they refer a customer (a sale, lead, or any other type of activity that is valuable for the merchant) often leads to an entire neglect of such an important component of every affiliate campaign as the affiliate program management. Programs are often being run on autopilot, which opens the doors up to such dangerous affiliate activities as trademark bidding, cookie-stuffing, forced clicks, affiliate parasitism and cannibalization of other marketing channels through self-installing adware, toolbars and other types of downloadable software.

At another extreme, there is a practice of affiliate management. I juxtapose it to affiliate program management due to the very essence of the relationship at stake. Affiliates are very different from any traditional workforce. While they all vary in types of marketing methods used, psychological maturity, professional experience and training, there is one thing which is true about all affiliates, and it is the driving force that moves them. All affiliates are driven by their love of independence. They are normally not tied by performance contracts; and can choose what affiliate programs to promote, and what merchants to drop, without notifying the merchants themselves. By the very definition of the term, affiliates are unmanageable. Therefore, merchants who believe that their job is to manage affiliates, frequently fail. Management is often associated with a top-down, directing, controlling, perform-or-we’ll-terminate-you kind of approach. Affiliates are intolerant of such management techniques, and of merchants that practice them. Instead, online businesses that run affiliate programs should understand that their job is to manage the program, and not these independent marketers that have chosen to join it. Therefore, I believe there is no such thing as a successful affiliate manager. One can be an effective affiliate program manager that also makes (him)/(her)self available to help affiliates, but not and affiliate manager.

There are two ways to manage an affiliate program: (i) by hiring an employee to manage it for you in-house, or (ii) by outsourcing the program management to an external agency (also known as O(A)PM or outsourced (affiliate) program manager). The latter frequently proves to be a more cost-efficient way, but you want to clearly outline the mechanisms of reporting as well as the areas of responsibilities at the outset of your relationship with an OPM.

Speaking of responsibilities, regardless of whether it is an in-house employee or an OPM, an affiliate program manager should be expected to manage the program on the following five levels:

1. Recruitment
An affiliate program manager is responsible for identifying and recruiting new affiliates. Affiliate recruitment normally takes anywhere between 40% and 60% of the affiliate manager’s time, and is one of the most important parts of the AM/OPM’s work. After all, affiliates are the main driving force of every affiliate program.

2. Activation
Affiliate activation is one of the most frequently overlooked components of affiliate program management. Activation is a step between affiliate recruitment and conversion of the recruited affiliates into producing ones.  An affiliate manager is to motivate new and/or inactive affiliates to put up their links, or launch ad campaigns that would start sending traffic to the merchant’s website. I believe that activation is to be practiced on three phases: (i) recruitment phase (where you motivate affiliates to not only join your program, but also to put up your links and refer their first orders/leads), (ii) welcoming phase (where you motivate affiliates to get active in the very text of the application approval email), and (iii) routine phase (where you run aggressive monthly activation campaigns to move those who are already in your program, but not yet active)

3. Policing
Next in importance to recruiting and activating affiliates is policing of inappropriate affiliate behavior. Whatever you prohibit in your affiliate program’s Terms of Service – be it downloadable toolbars that overwrite other affiliates’ cookies, or paid search bidding on your trademarks, URL, or any variations of misspellings of these – you want your affiliate manager to constantly police affiliates for these behaviors.

4. Communication
An affiliate manager should also be expected to support a two-way communication channel with affiliates. I believe this responsibility to be threefold: (i) maintaining stimulating relationships with the current affiliates, continually motivating them to perform better, (ii) keeping affiliates up to date on new products and any affiliate program enhancements, and (iii) handling on-going communication campaigns and all affiliate correspondence.

5. Optimization
Continuous affiliate program optimization is the last area of responsibility I would like to touch upon. Your affiliate manager is to be (i) identifying and implementing opportunities to enhance your affiliate program, (ii) developing and monitoring affiliate-centered promotions (note: please do not confuse these with promos directed at customers), (iii) reporting for affiliate marketing promotions and activity, as well as (iv) monitoring and reporting on competitors’ affiliate campaigns and promotions.

In conclusion, let me re-emphasize: there is nothing more important to an affiliate program than a close management. Open or non-existing affiliate program policies, and non-managed affiliate programs always fall prey to a group of affiliates that brings shame to my industry – those that hunt uneducated and naïve online advertisers to cut in between their marketing channels and earn commissions without adding any value.