Monday, January 23, 2006

The murky world of affiliates

Can my affiliates drive volume over and above what my search campaign is doing already?

The relationship between affiliates and search is a hot topic at present, especially in the travel arena. Look into the top affiliates on any program, and nine times out of ten you will find that they are using pay per click advertising on the likes of Google and Overture to drive clicks that they hope will ultimately convert into sales or leads on the clients website.

So if the affiliates are using search – are we just be cannibalising volumes we would have received anyway with our own search campaign?

The answer is probably no. Here’s why:

1 – Affiliates can do lots of things that you cannot do as a mainstream advertiser. Bidding on competitor brand names is a great example – it’s not that ethical but you can’t be held responsible for the keywords your affiliates bid on. Affiliates from rival advertisers will be doing it to you; you need to make sure you re-dress this balance.

2 – Affiliates often position themselves as being on the consumer’s side, and are often used as a price comparison guide. Most markets are not straightforward though, and the ‘best’ price in market is often somewhat subjective. If you can build a good relationship with your affiliates they will make sure your brand / products are portrayed in the best possible light. With this endorsement from a ‘neutral’ site, you’ll get more sales or leads than before.

3 – Even better than this… in some sectors (typically finance), the trading currency is leads rather than sales. In this instance, the top affiliates will gather the lead on their own website. This is usually their name, address and details of the product they are looking for. No links are used, and there is no obvious association between the affiliate and your site. These sites can position themselves as an ‘advisory service’. They say they will send the applicants details to the most relevant company. The customer does not have to be aware that they will always be referred to your client. This boosts conversions – as customers feel they’ve already found the best deal.

4 – Because there is no obvious link between the affiliate site and your client, you can have many different affiliates appearing in the search results. To the customer they look like lots of different sites. In reality, your client will receive the lead from whichever site the customer chooses to use. In some instances a client can effectively own the entire front page of a search engine.

5 – When gathering leads, your affiliates will offer a sense check for any lead that comes through. It’s amazing how many forms Micky Mouse and Homer Simpson fill out. A sensible affiliate will not pass these leads on, so the quality of leads coming through will be higher.

6 – Good affiliates optimise their site constantly, and can be clever with their landing pages and the wording used on their site. If a customer uses a keyword such as ‘computer’, they will be taken through to a page that talks about computers. If however they come through a keyword such as ‘PC’ then the landing page will talk about PC’s instead. This means the customer thinks they have found a site that is highly relevant to them.

7 – When gathering leads, you often receive a high drop off rate when the customer reaches the application page. Smart affiliates will ask for contact details first, so when a customer only half fills in the form – the affiliate can get in contact to give assistance in filling out the form. This lets you reach customers that you would previously have not.

8 – Affiliates can bid aggressively on generic keywords. They can do this because they will find a route of converting any customer that arrives. Take the keyword ‘loan’. Customers could be looking for unsecured loans, secured loans, car loans etc etc. Not many clients will offer all of these services, but an affiliate can gather leads for any of these products and then sell them on to a client. This means their conversion rates are very high – and allows your client to have a presence high in the search rankings which they might not otherwise be able to achieve.

These are just some of the ways affiliates can deliver extra value for you. It is still however important to regulate your affiliates. On a practical level this is ensuring they do not cause inflation to the bids on your own keywords, and from a user perspective it is important they deliver the brand experience you desire – so you may look to maintain controls on the logos, copy and offer information contained on their site.

The rules you place on your affiliates will depend on your client and the particular sector they are working in. Some clients are subject to strict industry regulations, so in these instances you should impose similar rules on your affiliates. Some clients feel there is a brand benefit from being placed at number 1 in the search listings for certain keywords. If this is the case you need to ensure your affiliates do not outbid you – even if they convert at a better CPA.

With these checks in place, affiliates offer lots of benefits that a client using search alone cannot possibly receive. Affiliate marketing is one of the fastest media growing channels, and these are just some of the reasons why.

Aidan Mark, senior planner at digital media planning and buying agency, Quantum


Steve E said...

If you allow your affiliate network to bid on your brand terms then you can expect to pay a lot more per click yourself. It's more effective to get them to concentrate on the areas of PPC with low conversion and do the brand/generic/high converting terms yourself.

Having affiliates bid on your competitors terms sounds like a really good idea!

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