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Affiliate Programs Enter a New Era

Affiliate marketing is now accepted as one of the most effective ways to acquire new customers and drive traffic in the online marketing world. In the past few years, affiliate programs of many types have been developed, accounting for a significant portion of online revenue and traffic. As Internet marketing evolves, marketers need to further invest in their affiliate programs to get the most out of this excellent customer acquisition tool.

As affiliate programs continue to multiply at a pace that equals the growth of e-commerce, it is helpful to categorize the current field of players into two classes of affiliate marketers. One class can be referred to as the standard generic affiliate program, and the other can be called the next-generation affiliate program.

The former class of affiliate program covers the vast majority of programs now in existence, whereas the latter class represents a small minority of online marketers. In essence, what distinguishes these two classes are those programs that are forging into new territory and developing next-generation affiliate programs that emphasize building relationships with their affiliates.

The latter consists of leaders in this distinct space who are defining and developing new methods to accommodate affiliates, thereby stretching their programs’ potential in terms of contribution of overall revenue to their companies.

It is interesting to see the disconnect between what the standard generic affiliate program offers and what affiliates are looking for. Programs that run with a handful of different banners and buttons that are rarely refreshed every year will not yield anything substantial. However, programs that survey affiliates, and that listen to what they need now and want in the future, have a much better chance of getting the most out of their affiliate network as well as attracting other quality prospects.

Companies running standard generic affiliate programs reduce their programs to their basic components. Consequently, they allocate the minimal amount of resources to build out the program and opt to outsource as many aspects of affiliate program administration as possible, including reporting and tracking, image serving and check issuance. In the end, the company will get only what it puts into its program, which may not be a wise investment.

Conversely, highly developed affiliate programs first outline the priorities of their current and most promising affiliates and develop their technology and marketing communications around accommodating those affiliates. When constant emphasis is placed on building and nurturing relationships with the best-performing affiliates, the program is immediately on its way to moving beyond the standard generic class of programs toward one that is dynamic and interesting to a diverse range of affiliates.

Check issuance to affiliates, which often is viewed as a routine, mundane program process, provides an opportunity for the next-generation affiliate program. Including useful facts about program developments and the company is a tremendous way to foster strong ties with those affiliates.

Strong communication with affiliates is a two-way process. Not only do the best programs send regular e-mails, but they also contact affiliates via phone to solicit feedback. When affiliates tell you they want a particular type of offer, they are asking for more targeted, strategic marketing. It is the duty of the company to act on these requests. In addition, tracking offer requests will result in emerging patterns that can help you categorize affiliates into specific vertical markets.

As this process is refined, more targeted content is directed to the appropriate segments of your base, your affiliates are more satisfied with the results they get, and you increase the efficacy of your affiliate channel. Adding targeted banners, text links and even storefronts with direct targeted offers gives consumers fun, creative content. Also, categorizing affiliates to tailor messages better suited to a subset of the program base is an important step toward building stronger relationships.

Centering your program on the many relationships that you want and need to build with your affiliates is an important step toward pushing your affiliate marketing efforts to the next level. Recognize that your affiliate program can grow into a critical driver of your business, and invest the time to ensure success with the affiliates that offer the most to your company.

• Tim Choate is chairman/CEO of Aptimus Inc., Seattle, an online direct marketing network. Reach him at [email protected].

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