What are the Basics of Affiliate
Affiliates are organisations or individuals
who drive traffic to a merchant’s site and get paid for the traffic they
drive. Normally this payment relates to an action performed by one of the
visitors, it could be:
•Flat rate per click
– If the merchant’s main aim is traffic generation then this is the most
likely payment method - e.g. 10p per visitor
•Flat rate per order / sign up / information request
– Often used by gambling and financial services – e.g. £50 per successful
credit card application
•Commission on Sales
– Used by retailers to generate sales – e.g. 15% of sales value ex P&P
– This is the most commonly used option in retail
Affiliates can be (roughly) classified into the following
groups. This classification is based on how the affiliate generates traffic.
Not all affiliate groups will fit with every merchant.
• Content Affiliates
• PPC Affiliates
• Voucher Code
• Email Affiliates
• Cashback / Points Affiliates • Product Feed Affiliates
These Affiliates have websites which attract
visitors by supplying interesting information.
They then put adverts next to this content to
drive traffic to merchant sites.
Voucher Code Affiliates
• These affiliates attract traffic to their sites by listing voucher codes
and offers that can be used to save money. Many of the visitors are
“signed up” to their website, will log in for offers, and receive
regular emails from the site.
• In the past the traffic from such websites has been seen purely as
consisting of bargain hunters who will shop from whichever
merchant gives them the best deal. This is now changing as the
mainstream press advocates the use of such sites to the savvy
customer, this is making Voucher Code affiliates both a source of
new business, AND a way to convince existing customers to
continue to buy.
Cashback / Points Affiliates
• These affiliates attract traffic to their sites by giving a percentage of
their affiliate earnings back to their users – either as points or cash.
Users have an account with the affiliate.
• In the past the traffic from such websites has been seen as purely
consisting of financially savvy fickle shoppers who will shop from
whichever merchant gives them the best return. This is now
changing as the mainstream press advocates the use of such sites
to the savvy consumer, this is making Cashback affiliates both a
source of new business, AND a way to convince existing customers
to continue to buy.
• These Affiliates run search advertising driving
traffic directly to merchant sites - using
Google Adwords, Microsoft AdCenter and
Yahoo Sponsored Search - rather than to their
• Instead of paying Google for the click, the
merchant pays the Affiliate for the sale.
• These are affiliates who have gained large lists
of 3rd Party opted in email data, and who send
emails to these lists in order to generate
income. Often they are the big data list
owners – eg Experian, Axicom etc.
• This is a new and growing area, and becoming
the way to navigate the problems of cold
Product Feed Affiliates
• These Affiliates merge the product feeds
provided by several merchants to create their
own website. Traffic comes to them to see a
wider range in one place, before clicking into
the selected merchant to purchase.
• Product feeds are also used by many of the
other Affiliate types.
Nearly all Affiliates connect with Merchants via an Affiliate Network. The Affiliate
Network acts as an interchange between Affiliates and Merchants, providing all the
necessary tools to allow both parties to concentrate on driving sales.
The Affiliate Network provides the following key benefits for the Merchant:
• Technology necessary to run the campaign:
– Track sales / calculate commission payments / make payments.
• Technology to take advantage of market developments fast / help Affiliates market
to the consumer
– Product feeds / banner provision / interactive banner serving / voucher tools.
– A one-stop shop for the Affiliates to see who’s in the market and what they’re doing.
– working via a network means Affiliates immediately know the Merchant will behave honourably.
• Ability to Market to the Affiliates
– Each network provides a series of tools which allow Merchants to advertise their programme to the
How to get started
in Affiliate Marketing
Choosing an Affiliate network
There are several Affiliate networks available, and a merchant needs to choose the
network they believe will be the best for them. As 99% of Affiliates are signed up to
all the networks, the choice will depend on the following factors:
Technology - Most of the networks have a similar technical structure, but it is good to know what it is
and what developments are planned.
Account Management Structure / Knowledge of the Marketplace - Partly depends on
how involved you want them to be, but in any instance it is advisable to go with a Network that has
merchants in your sector, AND a team dedicated to you industry (eg finance, travel, retail). This is key because
they will know how to help you drive maximum sales – which affiliates to speak to, what offers are working
Recent Performance History - Are they taking on more business, or losing business? Any high profile
How happy the Affiliates are - Are there any serious issues that the Affiliates have with the
Set up fees – These vary wildly – from £500 - £2500. What they cover also varies wildly.
Monthly fees – Again, a lot of difference here in the fee levels – from £100 to £2000. And in what is
covered by them.
Setting up the programme
The next step is the account set up, this involves:
• Signing the contract
• Implementing the tracking code on the merchant website so that sales can be
• Building the product feed, and setting up submission to the network
• Creating the Affiliate Banners and any other advertising materials to help the
Affiliates drive sales
• Setting up the account so that it will appeal to Affiliates
• Deciding on the Marketing Plan
Set the Marketing Plan
Setting the Marketing Plan requires answering the following
• What are the objectives?
To drive new business profitability? / at break even? To drive repeat purchases
• Therefore what level of profitability is required?
• What commission level will he programme start at?
• What Affiliate Types should the programme appeal to?
• Should it appeal to all of them on day 1?
• How will the programme appeal to these types of Affiliates?
• Should there be an incentive to encourage Affiliates onto the programme?
• What activity / communication / marketing to the Affiliates is planned for the
first x months?
• When will performance be reviewed?
• Stephen Darori
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