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Affiliate marketing

Would you like to draw extra visitors to your website? Targeted visitors who are interested in your product(s)? But you don't want to pay per click, only when they convert? And you want to be able to decide how much you pay so that it doesn't become loss-making for your company?

Then Affiliate Marketing is the answer! It allows you to address a large group of potential visitors who may otherwise not come into contact with your company. And, what's more, you only pay for these users as and when there is a transaction and then only pay the commission that you want to pay!

Sounds good, but how does it work?


The basic principles of Affiliate Marketing:

You have 3 parties within Affiliate Marketing:

  • Publisher: a person or company that has content on a website and wishes to generate income via a newsletter or an app on these channels. They can use banners, text links or forms (also called advertising materials) to forward these visitors onto an advertiser.

  • Advertiser:an advertiser is a company - often an e-commerce company - that provides advertising materials to draw visitors to a website or app in order for them to take action. A fee is paid thereafter to the publisher for this action. This could be a fixed amount per target but could also be a percentage of the transaction amount.

  • Affiliate network: the affiliate network sites between the publisher and the advertiser. They provide 3 things:

    • the technology that registers the targets and feeds this back to the publishers
    • the financial processing of commission and the payments between the publishers and advertisers
    • the network effect, ensuring there are enough publishers for a company to make a start and that there are enough companies for publishers to make a choice

The information above is a simple summary of how it works in general, but how can it help your company grow?


The first step is analysing your products and company.

Could it be beneficial to start working with affiliation? Will your margins allow you to pay out a share thereof? Are you also active within other marketing channels? Can you and do you want to approach a potentially large target group?

Are you able to deliver a high number of products in an efficient manner, via a product feed, for example? This offers many possibilities by, for example, being able to choose the best products yourself. And you also have the option to create appropriate banners which transmit your brand and also focus on conversion.


Fees

There are a wide range of calculation models and formats. The most well-known are:

  • CPL: Cost per lead or how much it costs to obtain a lead. This could be a newsletter mention, but could also be a completed quote form. This fee is usually charged per amount. So 1 lead is worth 10 EUR.
  • CPS: Cost per sale. The cost per transaction can be set as a fixed value or a percentage of the sale. Company A could pay 7 EUR for a transaction of 100 EUR, or 7%.

In addition, there are various sliding scales for various products and/or periods. In other words, if you pay 7% commission as standard for all products but 9% for seasonal products, this can be indicated separately.

There are also options for paying via CPC and CPM. In our experience, these payments have led to nothing but problems in the past. Why? Many people who have no interest in your product and/or website are sent to your site. As a result the bounce ratios are 95% or higher. They are not good quality leads.

Approving leads or transactions

Something that is very different to other online marketing channels is that every lead or transaction must be approved or rejected before the commission is approved for the publishers.

The term for this lead approval is often the same as the returns period for e-commerce orders. This system prevents orders being placed, commission being received and then orders being returned.

When it comes to approving transactions, it is important to check that the transaction has come in via the publishers because there are a great many tricks for increasing commission.

A few examples:

  • Brand bidding via search engines: publishers will try to bid for your brand within the search engines. As a result, they can gain cheap transactions via your brand name and generate increased income for themselves. You must therefore check and keep checking this thoroughly.
  • Cookie dropping: a frequently used method involves cookie-dropping via, for example, a marketing department or customer service. What does this involve? A link is sent to a person within the organisation and they click on the link. The click leads to a cookie being placed on the (customer service) employee's computer. The next time that this computer is used to place an order on the website (e.g. to help a customer), this transaction is attributed to this publisher.
  • Promotion code websites: if promotion codes are often used, the customers will try to obtain a promotion code. The user pays but the promotion code website has not generated any extra value for your company. It is important to focus on this.
  • De-duplication: the process of de-duplication for your channels is very important. As and when there is a transaction via Google Adwords and this is also regarded as a conversion AND is also seen as a transaction within the Affiliation programme, you will pay twice and both channels will have the same transaction figures. The de-duplication process within the marketing channels is therefore vital in order to resolve this issue.

Alongside de-duplicating marketing channels, it is also wise to be aware of cookie time.


Cookie time is the period within which a specific lead or transaction can be attributed to the publishers. This period will be set at the beginning of the campaign. The standard cookie time period is 30 days. Certain campaigns run up to 100 days.

This means commission for the publisher for anyone who has come in once via a publisher in the last 100 days and provides a transaction. That is why it is so important to be aware of average transaction time.

You count from the first time that person A comes to the website to the time that this person converts. We advise you to set your cookie time within this period.

As well as the fee that you pay to the publisher, it is also important to chart the various commission models of the affiliation networks.


Calculation models for affiliation networks

In general, calculations are made using 2 different calculation models. The CPS can be inclusive or exclusive of the affiliation network costs. This means a variance for invoicing.

We can clarify this via a calculation example:

You have 10 EUR over for a transaction. This is inclusive network costs and they calculate 30% for these.

You can also set it up exclusive of the affiliation costs and the affiliation network still has 30%. In that case, the publisher has 10 EUR and the affiliation network has 3 EUR. Your company, however, then pays 13 EUR per transaction.

It is important to monitor these issues closely given that this can have a huge impact on the ROAS and campaign effectiveness. This is an area where we have masses of experience and can provide you with guidance. Then we come to the ultimate question:


What can OMCollective do for you?

Our extensive experience within the affiliation market in Belgium and the Netherlands means we can quickly set up effective and efficient campaigns for many different sectors.

We can help you choose the right affiliation networks with a good range for your company. Every affiliation network has its own specialist area, and we can advise you in this context.

By managing the affiliation programmes, we can also reconcile the marketing messages with the other channels and make sure they are not brand bidding.

The implementation of an attribution model enables us to calculate the exact added value for each publisher, how you can deal with this and ultimately obtain the ROAS that you company would like to achieve.

Contact us directly to arrange a meeting.

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