Are you getting mugged by your affiliates?

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I’ve most probably missed the boat by talking about affiliate marketing as it’s no longer the flavour of the month, not a day goes by when I don’t get an email suggesting a merchant has closed down their affiliate campaign), but it’s still a channel that can generate a worthwhile proportion of sales, but you will have to avoid some fairly common mistakes.

The biggest mistake is a lack of a PPC policy.  On one site I found that while the affiliate scheme was generating significant sales every month, the sales were all coming from affiliates who were bidding on the site’s brand name.  The major problem here is that purchasing decisions are non-linear. A user might visit your site a few times before he decides to buy your product, here’s an example:

If a user wants to go to Florida and your site sells tickets for SeaWorld Orlando, the process might go something like this:

A user searches for: ‘things to do in Florida’

This is an informational gathering term, an early part of the process – at this point the user doesn’t know what they will want to do in Florida.  After visiting a couple of sites, she lands onto your ticket site and reads about a few attractions including SeaWorld Orlando.

She goes away and thinks about it, and suggests SeaWorld to her husband and her kids who are also going on holiday.  They like it, so next she’s looking at the price and searches for something more like:

SeaWorld Orlando Tickets

This is much more focused, but she’s not booking anything until payday, so she’s just comparing the different ticket sites.

A week later and she’s been paid, time to book those tickets.  Assuming your site is persuasive, engaging and competitive on price (not necessarily lowest – competitive) then the next search will be:

YourBrandName

The conversion rate for your brand name should be sky high!  That’s because people only search for it after they’ve been through this process or have bought from you before.

My original point was that if you don’t have a PPC policy on your affiliate merchant account, you’re open to affiliates carpetbagging sales by bidding on your branding.  It’s the easiest money any affiliate will ever make, because they didn’t do anything to persuade the user to buy – you did all that work, they wanted to come back and you paid a 5% commission for no good reason at all. Silly you!  Make sure you add a PPC Policy on your affiliate account prohibiting affiliates from bidding on brand related terms.

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One response to “Are you getting mugged by your affiliates?”

  1. Adrian LandNo Gravatar says:

    I too hate this scenario and needs to be handled sensitively. We all want to be covered and would rather pay an affiliate rather then give ground to a competitor but it still grates.

    This is a battle ground in SEM and SEO. Generally good affiliates are cunning and nimble. They can expose you if you are weak in SEO or SEM.

    So, strong SEO, maybe flanker brands and a strong upfront brand policy is essential.

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