According to studies by the Internet Advertising Bureau (IAB), affiliate marketing generated £9bn in sales in the UK in 2012, which makes it a force to be reckoned with in today’s online advertising world. Since 2008 it has been growing at a steady rate of 12% per year.

But what is affiliate marketing exactly? How can your business benefit from using this online channel? Is it adapted to all types of business transactions, including B2B? Let’s try to find out.

What is affiliate marketing?

Affiliate marketing is an online advertising model where an advertiser uses partners to promote their products and services. Partners are called publishers and these programs are usually run on a CPA basis, which means those partners will get a commission every time a defined type of action has been performed (a sale, a registration or a phone call for example, whatever you want it to be).

The most popular form of affiliate marketing is through online banners but a lot of other forms exist including features on price comparison websites or email marketing. The advertiser usually provides the publisher with some marketing material. Most of the time an intermediary affiliate network platform is used where both parties can check the metrics for all campaigns they’re running. Material can include online banners, videos, articles or emails.

How to succeed as an advertiser

  • Find the right publishers for your products and services

Once your business is registered to an affiliate platform, it is not just a case of sitting back and waiting for things to happen. It is important that you take a close look at all publishers available and build a special relationship with all the important ones. Think about your buyer’s profile to try and find websites that could generate a higher level of engagement. Once you have found those, get in contact with their owners and try to have them sign up to your affiliate program.

  • Great offers

Unless you see affiliate marketing as pure brand advertising, you will need to come up with strong call to actions and offers to encourage people to click on your affiliate banners. Freebies are usually a good way to increase interaction. You need to view affiliate marketing as a way to increase your database, not necessarily sell your products or services directly. Once you have collected details from these prospects, you will have time to try and convert them into customers through other channels like email marketing and telesales for example.

  • Regular updates

Just like most forms of online advertising, it is important to update your banners and copy regularly or your CTR will start declining after a while. Users will no longer notice your ads if you use the same creative for too long; and if users stop clicking on your ads, your publishers will simply stop promoting your campaign. So make sure you launch new campaigns regularly and also remember to notify your publishers about them.

  •  Varied collateral formats

Make sure to offer your publishers display banners in all common sizes for maximum exposure. Also try to diversify your collateral offering by adding both animated and static banners for example or widgets for data collection. Videos are also getting more and more popular so it would definitely be a good idea to include one.

  • Stand out with high resolution collateral

Avoid blurry low resolution images that would give your banners a cheap look. On the other hand, do not go for oversized images that would take too long to load. Jpeg is usually a safe bet when it comes to online banners as it is both light in size and renders well on most browsers. While image definition is important, designing banners that stand out on a web page is paramount.

The amount of text should be minimal and focused on call to actions. The images should be colourful, fun and engaging. Just like social media advertising, the use of a mascot or funny character could help trigger more clicks. So be creative and try to find an amusing angle to your products and services.

  • Good commission for publishers

It goes without saying that publishers will be more willing to participate in your affiliate program if they get a chance to generate good revenue for themselves. Always think about the long term value of your customers when it comes to defining commission for your program. If you are selling expensive products or services, use your affiliate program to grow your database rather than try to sell online. Publishers will quickly lose interest in your program if they find it too difficult to make decent money out of it.

  • Clear campaign stats for your publishers

Make sure all your publishers can easily check important metrics for your campaigns. This will usually be done automatically through the affiliate platform but if you have created your own affiliate network, make sure you have a good tool in place where your affiliates can easily check how they are performing in real-time. This tool will obviously also be very important to you and will help you put together KPI’s for your campaigns.

  • Cookie duration

Anytime someone clicks on an affiliate link, a cookie is stored on their computer with tracking details for this particular marketing campaign. Cookie durations usually range from 7 to 90 days, depending on the value of your products and services. Cookie length should be proportional to that value. If you have a 10 days cookie for example and someone clicks on an affiliate link on day 0 and only buys the product or service on day 7, the publisher will receive a commission.

So isn’t it in the advertisers’ best interests to shorten cookie duration as much as possible? Not really. As an advertiser it is recommended to respect average cookie duration to keep your affiliates motivated and happy. Having a short cookie duration will drive publishers away from your programs and give you an unfriendly reputation amongst publishers. So in order to keep your affiliates happy, do not mess with the cookie!

Why affiliate marketing?

  • Only pay for sales

Remuneration models for affiliates are typically CPA, and even more typically commission per sale, as opposed to PPC advertising for example where you pay every time someone clicks on your ads. You are also free to determine what commission you want to give your publishers. So all in all it is pretty much a risk-free marketing channel for advertisers, which explains its huge popularity in today’s online world.

  •    A great channel for brand awareness

In addition to helping you generate direct sales or registrations, affiliate marketing is a great way to advertise your brand to thousands of users all over the internet. All you need to do is to refine your selection of affiliates to make sure your brand only appears on websites that will be good for your image or are relevant to your sector of activity.

  •  A win-win situation for both advertisers and publishers

With affiliate marketing, it is in the interest of both parties to make a program work. Which means publishers will always be willing to help you improve your results, because the more sales or registrations you generate, the more money you will both make. This is why affiliate marketing is such a unique channel with no equivalent elsewhere.

Affiliate marketing and B2B

Good B2B affiliate networks are very difficult to find in the UK; most networks are primarily B2C but may be willing to sign you up depending on what B2B products or services you are selling. Which means that if you sell to businesses and want to run an affiliate program, you will still need to use traditional B2C networks. And competition from B2C advertisers will be tough! In addition, the low revenue prospect will make publishers reluctant to run any of your campaigns.

One way to try and trigger interest is to offer higher commissions than B2C programs.

Once some publishers have accepted to run your campaign, you may still find it difficult to achieve your targets: as a B2B advertiser on a B2C network, you will always get a lower volume of clicks. However, if an affiliate network accepts you as an advertiser, it is always worth giving it a try.

Create some engaging registration-only collateral, offer some freebies and have clear business-only call to actions. Your campaign would be worthless if over 50% of registrants were consumers. If in the end it really does not work for you, just switch to other channels like PPC or email marketing.

Affiliate marketing and SEO

Will affiliate marketing help with your link building strategy? Or can it have a negative impact on your website’s organic listings? The first thing to remember is that affiliate URL’s will either point to the affiliate network platform or to your website with a tracking code added to them. Which means that search engines won’t record any of those as backlinks.

And it is probably better this way: link relevance is vital these days and having thousands of unrelated websites linking to yours would have you penalised by search engines. In the end, the only debatable way affiliate marketing could help your SEO is through traffic and number of visitors. Debatable because there is still no proven connection between web traffic and good organic rankings.

Conclusion In conclusion, affiliate marketing is a great channel to reach consumers. It is also ideal for businesses with a need to closely control their cost of acquisition. However, it is not just a case of registering to an affiliate network website, it will require some efforts from an advertiser to make their campaign work.

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