The time has come for Australian retailers to stop dragging their heels and get serious about e-commerce and online marketing, or risk being left behind for good.
Last week we saw an overwhelming consumer demand cripple the Click Frenzy website just moments after the scheduled launch, serving as a timely reminder just how far behind the local retail industry is with their multi-channel marketing efforts.
Today’s marketers are coming under ever increasing pressure to connect with their consumers across all channels, yet one medium which provides a diverse range of advertising options is often overlooked – the affiliate channel.
Spread out across the country is an army of savvy online marketers, running all types of websites from price comparison engines, coupon websites, product review blogs and large volume content providers to search engine and Facebook marketers, each with their own band of loyal members and email marketing lists.
These innovative website owners actively compete for top Google rankings, specialise in converting leads to sales and are prepared to work on incentive based programs which is an attractive low risk offer for retailers in most people’s books. So why are some marketers resistant to try running an affiliate marketing campaign?
Recently I caught up with James Kitchener, CEO and Co-Founder of Jack Media to find out what it takes to run a successful campaign and why some marketers are resistant to give it a go.
From a marketers prospective, what is the value proposition of affiliate marketing?
Affiliate marketing is a cost-effective, low-risk advertising channel with the sole purpose of driving conversions. The main value proposition of affiliate marketing is that it is performance based. Marketers are only paying for known outcomes with guaranteed results, unlike many of the other forms of online marketing.
Affiliate sites play a very important role in influencing shoppers at each phase of the purchase cycle and are continually building innovative technology that helps shape how customers are shopping online. Online customers are becoming increasingly savvy in how they shop online and use the web as an information resource. As a result, consumers have loyalty and trust in affiliate content sites whether they are comparison sites, aggregators or blogs and are increasingly using affiliate sites as a way to make their final purchasing decision.
In short affiliate marketing empowers advertisers to leverage expert marketing efforts of affiliates, to expand their reach and make sales through thousands of pages of content they’d never be able to get traffic from otherwise.
There is a belief amongst some marketers that affiliate marketing leads to cannibalisation of existing sales. How would you persuade them otherwise?
It’s an odd idea. When you say affiliate marketing, marketers envision someone in his pyjamas sitting in front of his computer. The reality is that, for most successful affiliate marketers, nothing could be further from the truth and they are experts at search optimisation, social media, email, and driving conversions.
I think that because many marketers do not fully understand affiliates, they approach the affiliate traffic pool in a very different fashion to any of their other traffic resources and marketing spends. Marketers understand spending money on Google cost per click can gain more exposure and sales but tend to look at affiliate exposure and sales differently and not apply the same logic. Working with affiliates can drive massive incremental sales growth in the same way a good Google campaign can, however there is one major difference. A badly optimised or incorrectly setup Google campaign will burn money very quickly and return no results whereas the affiliate marketing channel is results driven; so you only pay on performance.
The cases where an affiliate program can cannibalize the existing sales are when the program is not managed correctly. For instance, affiliates bidding on trademarks terms could be deemed to be poaching sales commissions from organic sales. However many savvy US marketers have embraced the idea and allow affiliates to bid on terms, as long as they sit second to the company’s ad. The reason behind this is all about search term shelf space; it still makes more sense to pay an affiliate commissions than to let a sale go to the competition.
Like all marketing channels proper setup, controls, monitoring and optimisation are required. If done correctly you won’t get a channel that provides better ROI than affiliate marketing.
What kind of resources do marketers need to support their affiliate program?
This is in many ways is the best thing about the affiliate channel; it should require low resources and not require companies to hire more people. A company should look at their affiliate channels as an extension of their marketing team and look to leverage them as an army of performance based marketers. It’s pretty cool that you’ve got a group of motivated people that want to advertise your brand solely on a commission basis.
Clear data and reporting is the best resource available to a marketer engaging the affiliate space or any other marketing channel. Crunching the data provided from analytical tools and the reporting of the affiliate network will help optimise and grow the campaign. Discussing how to optimise an affiliate campaign using the reporting data is a crucial step in the campaign setup process that many affiliate networks fail to bring to the attention on marketers.
Where do you see major affiliate growth opportunities?
Growth is still in the big brands. So many big brands spent huge money on essentially display campaigns with Click Frenzy for one day but don’t run affiliate campaigns year long. It’s absolute craziness. When we look at the US you get an idea of the catch up that Australia has to do, where probably 3-5 years behind with the big brands.
What are 3 things marketers should be doing right now to maximise the ROI from their affiliate campaigns?
- Track conversions down to affiliate ID and understand how to optimise your campaign
- Split test landing pages to increase conversions
- Learn more about how the affiliate channel works and understand what motivates publisher to drive conversions.
Marketing.com.au would like to thank Richard and James for sharing such interesting insights into the world of affiliate marketing. If you have any feedback or questions, please let us know below in the comments.
James Kitchener, CEO and Co-Founder of Jack Media
Jack Media is a leading Australian affiliate network. The Jack Media team brings deep experience in interactive publishing and advertising across a huge number of verticals. Jack Media is committed to providing world-class technology, strategy development, training, service, and launch support to help their partners make the most in the ever changing online marketplace.
Richard Green
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