The Practical Guide to Creating and Managing a Profitable Affiliate Program by Neil Durrant Affiliate Marketing can be the most cost-effective Marketing method available to promote your website. Learn how to create and manage a profitable Affiliate Program using this essential step-by-step guide. Offering a practical solution to establishing and promoting a performance based Marketing Program. 2000 Neil Durrant, Affiliate Announce All Rights Reserved. No part of this publication may be stored in a retrieval system, transmitted or reproduced in anyway without the prior agreement and written permission of the publisher. Some images copyright www.arttoday.com Neil Durrant 41 Bourne Road, Bexley Kent DA5 1LW United Kingdom [email protected] 1 Dedicated to the Affiliate Program Manager who creates a program in the spirit of partnership. 2 Table of Contents Foreword – Affiliate Marketing comes of age CHAPTER 1 1.0 Introduction – Affiliate secrets CHAPTER 2 2.0 What you need to know before starting your program 2.1 What an Affiliate Program will do for you 2.2 The difference between success and failure starts here 2.3 Does size really matter? 2.4 Anatomy of a successful program or what an Affiliate wants from you 2.5 Summing up CHAPTER 3 3.0 Planning for success 3.1 Choosing the right model for your business 3.2 How much should you pay your Affiliates? 3.3 Return-days and active cookies 3.4 When is Affiliate payday? 3.5 Paying Affiliates electronically 3.6 Will you allow Affiliates to ‘buy for own use’? 3.7 Summing up - your payment checklist CHAPTER 4 4.0 Selecting a tracking solution that’s right for you 4.1 What you need from your tracking solution 4.2 Choosing a network or software solution 4.3 Affiliate networks 4.4 UK based Affiliate networks 4.5 Personal experience of Commission Junction 4.6 A merchant’s view of LinkShare 4.7 A merchant’s view of Be Free 4.8 A merchant’s view of Dynamic Trade 4.9 Software solutions 4.10 How tracking technology works 4.11 One key feature you must have in your software package 4.12 Tracking solution vendors 4.13 Still confused? CHAPTER 5 3 5.0 Creating Affiliate links that generate traffic and sales 5.1 Identify all your niches 5.2 What are the best linking methods? 5.3 Creating banners 5.4 Using text links for a better click-thru rate 5.5 Classified adverts, signature files and articles 5.6 Offering a free report by auto-responder 5.7 Providing Affiliates with access to your sites database 5.8 How CollegeRecruiter.com generates 100-150 times the click-thru rate of typical banner ads 5.9 Interactive content and personalisation technology 5.10 Be creative CHAPTER 6 6.0 Putting it all together: Implementing your program 6.1 How to get the edge on your competitors even if you can’t beat their commissions 6.2 Make sure your Affiliate referrals hit a landing page that sells 6.3 Presenting your program 6.4 Affiliate agreement CHAPTER 7 7.0 Recruiting Affiliate partners 7.1 Put it on your home page 7.2 Get free advertising with the Affiliate directories 7.3 Affiliate directories 7.4 Personally inviting sites 7.5 Where to find the ideal sites for your program? 7.6 The most effective method to convert your prospect list into active Affiliates 7.7 Selling the concept of your Affiliate program 7.8 Locating your competitors Affiliates 7.9 Cross promotions with other programs 7.10 Advertising for Affiliates 7.11 Generating free publicity to promote your program CHAPTER 8 8.0 Activating Affiliates and increasing sales 8.1 Why 99 per cent of Affiliates are inactive 8.2 Useful tool to help your Affiliates focus on selling not technology 8.3 Create a 'Fast-Start' training guide for your program 8.4 How to maintain your Affiliates loyalty 8.5 Free meta-refresh creator from AffiliateToolkit CHAPTER 9 9.0 Metrics – knowing the numbers that add up to more profit 9.1 Your Affiliate numbers 9.2 Examining Affiliate performance spikes 4 9.3 The most important metric to improve on 9.4 The best way to test your Marketing 9.5 Why testing and knowing your CR is so important 9.6 Performance related ad buys CHAPTER 10 10.0 Taking your Affiliate Program International (Guest written by Stefanie Puetz-Lehmann) CHAPTER 11 11.0 Recruiting a Program Manager 11.1 How much does an Affiliate Manager earn? 11.2 What skills should I look for in my Program Manager? 11.3 Outsourcing your Program Management CHAPTER 12 12.0 Case study – planning and implementing an Affiliate Program CHAPTER 13 13.0 Interviews - Allan Gardyne - Shawn Collins - Wayne Porter CHAPTER 14 14.0 Resources and further reading CHAPTER 15 15.0 Glossary CHAPTER 16 16. Comments - what do you think? CHAPTER 17 17. Bonus chapter – Declan Dunn’s audio feeds CHAPTER 18 18.0 Worksheets – your steps to success 5 Foreword ‘Affiliate Marketing Comes of Age’ by Joel Gehman AffiliateHandbook.com Years before the NASDAQ cratered and banner advertising died, e-commerce pioneers like Amazon.com and CDNow began partnering with topic-centric websites to drive revenues, paying a commission for each sale referred. The practice spread quickly and became known as “Affiliate Marketing”. By early 1999, Forrester Research pronounced “Affiliate Programs” as the web’s most effective traffic-driving technique – almost twice as effective as banners. Little more than four years after launching, Amazon announced in August 2000 that its “Associates Program” had grown to over 500,000 Affiliates. What Jeff Bezos started as a polite conversation had grown into an entirely new industry – bringing with it Affiliate networks, directories, newsletters and a variety of consultants. Other innovations followed. The implementation process has thankfully gone from painstaking to straightforward. As Affiliate Marketing matured it was adopted by thousands of new merchants. Affiliate Marketing is now widely heralded as the web’s most cost effective marketing vehicle. More than ever Affiliate Marketing is being driven by the power of context – making it useful to both commerce and content websites. It seems the line between advertising and editorial will continue to blur. Improving targeting technologies make it possible for formerly CPM-dominated content sites to net greater revenues using performance-based offers. Merchants are learning static banners aren’t enough. Instead they are pairing content with commerce offers. Finally, the frictionless nature of the web is enabling syndicated selling. The result is a whole new world of opportunities for websites big and small. A Brief History of Affiliate Marketing Person-to-person selling is not new. Even Amway - with over 3 million “independent business owners” - is something of an Affiliate Marketer. Regardless, the origins of Amazon’s Affiliate Program have become legend. It was during a dinner party conversation that Jeff Bezos first recognized the power of formalizing a commission program to other websites that link to Amazon. While Amazon only pays a commission when a sale is made, high- priced items like cars and financial services like credit cards pay instead for new users, click-thrus or qualified leads. Despite Affiliate Marketing’s well-documented effectiveness, the time and cost involved in building an Affiliate Program has kept some merchants away. Other pioneering merchants like PC Flowers & Gifts, BigStar and EPage were often forced to build their own Programs – in some cases ahead of Amazon. 6 Consider that by September 1999, more than three years after Amazon launched, just over a thousand merchants offered Affiliate Programs. What the industry needed most were simple, less expensive ways for merchants to benefit from the power of Affiliate Marketing. Affiliate Marketing Today Affiliate Marketing is now part of the web’s very composition. The cost and effort required to launch a successful Program has been dramatically reduced as a result of both new and improved Affiliate networks. Internationally, dozens of players are cropping up in Europe and Asia, making Affiliate Marketing accessible to new geographies. Network providers also drastically reduce the cost of acquiring a base of active Affiliates - an otherwise expensive and time-consuming task. For merchants looking to jumpstart their Program the modern day Affiliate network has become an incredible option. The race is now on. In the last year the number of merchants offering Affiliate Programs has more than quadrupled to over 5,000. Literally millions of websites now participate as Affiliates – from personal homepages at Geocities and Homestead, to Media Metrix stalwarts like Weather.com and LookSmart. While banner click-thru rates average 0.5 per cent or less, Affiliate networks average 3 and 4 per cent or more. Overall, an estimated 20 per cent of all e- commerce revenues are driven by Affiliates. In four short years, Affiliate Marketing has become a staple of web marketers. Ultimately, Affiliate Marketing looks destined for even greater prominence. By 2004 both eMarketer and Forrester Research estimate that online advertising will reach for $22 billion. Performance marketing is expected to account for some 54 per cent of the total, or more than $11 billion in Internet marketing expenditures. Clearly those without an Affiliate Program are in danger of being left behind. The Future of Affiliate Marketing The holy grail of marketing remains right message, right place, right time. At one time personalization looked to hold the answer. Only MyYahoo! has ever really succeeded in getting visitors to profile themselves. Instead, new targeting technologies are relying on the power of context to predict the most likely product matches – many via completely hosted solutions, and on a scale never before thought possible.