Affiliate Marketing — no cure, no pay

You may be having some doubts. The 40,000€ marketing campaign you kicked off 14 days ago has not yet yielded the results you had hoped for. Far too few people have downloaded your e-book and the leads that have come in are nothing to write home about. Think for a minute. What would it mean to you if you were able to erase the budget for those marketing campaigns that don’t result in any notable result for you? Think about what it would mean if you only had to pay for the campaigns that pay for themselves?

ViaBill
ViaBill
Apr 10, 2018 · 10 min read

Affiliate Marketing may be an option.

In this blog, we have consulted with two affiliate experts. One of them is Martin Dean, who works for the affiliate network, Artefact. The other is Kasper Toxvig, who is responsible for Rito’s affiliate efforts.

For those of you who haven’t heard of Affiliate Marketing yet, there is no reason to be nervous. You are certain to have heard of Affiliate Marketing when you learn that it leans heavily on: Influencer Marketing, Performance Marketing and Referral Marketing.

“Affiliate Marketing is performance-based marketing based on the old business model — no cure, no pay. To spell it out, it quite simply means that the company only pays when its marketing efforts result in a sale or when the customer takes another course of action. This could, for example, be when the customer signs up to be contacted or, even better, when the customer makes a purchase in your webshop.”

Martin Dean, Business Development Manager, Artefact

There are three players in Affiliate Marketing: the advertiser, the affiliate network and publishers.

Meet the 3 players in Affiliate Marketing
  • The advertiser is the company that wishes to have its products marketed through other people. The advertiser repays these people, called publishers for lack of a better description, with the agreed commission for the sale or the lead that has gone through.
  • The affiliate network is the network the advertiser contacts in order to obtain advice. Here, it is the affiliate network’s job to help make the advertiser’s campaign attractive to the publishers associated with the affiliate network. In addition, the affiliate network also helps optimise the advertiser’s campaigns on an ongoing basis so that all parties get as much out of the collaboration as possible.
  • Publishers comprise everyone who either owns or operates traffic on the internet via their website, SoMe or blog. The publishers are the people, who promote the advertisers product. These publishers can be anything from marketers, bloggers, celebrities, news sites, affiliate sites (momondo, zale.dk) and customer loyalty clubs (SAS Eurobonus).

Why you should work with Affiliate Marketing

If you, as a webshop, wish to get started with Affiliate Marketing, it is not mandatory to use an affiliate network. But, using an affiliate network as a link between you and your publishers has several advantages. For example, by collaborating with Artefact, the advantages are that:

● You gain access to 3000–3500 publishers that you can choose from to find the people who match your product. Moreover, they have their own Affiliate programme, which means that they can evaluate all the publishers associated with your brand.

● Artefact and their publishers only earn money when you earn money

● Free branding

● Additional marketing and sales channels

● Transparency with regard to Sales and ROI

One of the dilemmas that can pop up when you work with an affiliate network is third party traffic. This is because you, as a company, do not have 100% control over where and how your brand or product will be presented by the publishers who are promoting you.

“However, if you have found an affiliate network that claims to be reliable, then they will probably agree to “white list” those publishers that may be relevant to you so that you can build an even closer partnership with them. That way, as an advertiser, you will also get an idea of who your publishers are, what they are saying about you and how your brand is being exposed.”

Martin Dean, Business Development Manager, Artefact

“The obvious drawback is that you are surrendering part of your territory to the network. But, compared with what you get out of it, as an advertiser, I see it as a greater advantage to work together with an affiliate network as the affiliate network takes care of the technology, support and the payment of commission etc.”

Kasper Toxvig, Affiliate Marketing Manager, Rito

The Business model

To give you an idea of what the business model looks like from its inception to the point when you collaborate with an affiliate network on your affiliate marketing.

Step 1 to 9 shows how to work with affiliate marketing through an affiliate network

The Settlement Model

Typically, the Settlement Model entails the Publisher getting 80% of the turnover they have generated, while the network keeps the remaining 20% of the turnover in commission.

Here is an example from Martin of how a potential settlement could look.

An advertiser generates turnover of DKK 100,000 a month in their webshop due to its affiliate efforts. And, as he has concluded a CPS agreement with his affiliate network of 20% per sale, this means that the affiliate network gets DKK 20,000. Of that DKK 20,000, the affiliate network gives 80% to the publisher and keeps the remaining 20% for himself. In other words, the publisher ends up getting DKK 16,000 and the affiliate network gets DKK 4,000.

Types of campaign

There are several campaign types to choose from when you set the targets for your campaigns. At Artefact, they work with the following campaign types: CPS (cost per sale), CPA (cost per action), CPL (cost per lead), CPC (cost per click), CPD (cost per download) and CPI (cost per install).

What is important when you are evaluating an affiliate network?

1. Find a reliable affiliate network

It is extremely important that you, as an advertiser, work with a reliable affiliate network.

“To determine whether an affiliate network is reliable, you should check whether the website looks realistic.

If you can make contact with an affiliate network, see that there are Danish consultants associated with it and read case studies from other companies that have worked with the affiliate network then this is an indication that the affiliate network is reliable. In addition, it is prudent to check whether they have been matter-of-fact etc. “

Martin Dean, Business Development Manager, Artefact

There will be some networks that have not subscribed to the FOM’s (Consumer Ombudsman’s) guidelines. Therefore, they can quickly run into problems if under the media spotlight and are hit by a massive shitstorm. Here is a good example of a network that has not followed the rules.

Therefore, it is important that you collaborate with an affiliate network that doesn’t just want to make money, but also looks after the advertiser’s interests and, most importantly — doesn’t destroy the advertiser’s brand.

2. Choose an affiliate network that matches your product

Some affiliate networks specialise in services such as providing loans, TV packages or broadband, while others focus on physical products. Therefore, you should seek out an affiliate network that matches the product you are offering. This means that you can ask yourself 2 questions.

  1. Am I selling a physical product or a service?
  2. Does this affiliate network match the industry in which I am operating?

3. Follow your publishers and competitors

At the end of the day, an affiliate network is merely a middleman. Therefore, I thoroughly recommend that you check out which networks your potential publishers attract. At the same time, it is also advantageous to check which affiliate networks your competitors are collaborating with since this is where you will find the most attractive publishers.

4. Avoid affiliate networks with a poor track record

When an affiliate network has a poor track record, it means that they unfortunately have done something wrong, either they have paid provision too late or not paid their publisher at all. You can easily get more information on Google about the given affiliate network, or ask an affiliate publisher about the affiliate network you want to cooperate with.

5. Focus on transparency

There will be some affiliate networks that are like a closed book. This means that you, as an advertiser, will not gain an insight into those publicists that will direct traffic to your website. Moreover, you will not be able to personally decide which publicists will be a part of your affiliate programme. You should view these affiliate networks with a sceptical eye. This is largely due to the fact that you cannot reward the best publicists and, furthermore, you will not be able to establish a closer collaboration with them as you do not have the opportunity to come into direct contact with them.

Which companies use Affiliate Marketing? And how do they work with it?

It is the large international brands in particular that are involved in Affiliate Marketing. Here, the list includes companies such as Nike, Zalando, ASOS, Emirates and Estee Lauder.

“One of the reasons that affiliate marketing works for these large companies is that they either have affiliate experts in-house or they have a collaboration with an affiliate network which manages and optimises their campaigns on an ongoing basis. These reputable companies put money into affiliate marketing and have understood that affiliate marketing won’t necessarily be profitable from day one. “

Martin Dean, Business Development Manager, Artefact

Among the Danish companies, listed by industry, who work with affiliate marketing, the following should be mentioned:

● Telecoms: Telia, Telmore, Yousee and Telnor

● Energy: Seas NVE, Blue Energy and Verdo

● Loans: L’Easy, DER, Santander and Norwegian

● trade unions and insurance policies.

The aforementioned Danish companies often need to have large numbers of leads generated so that their telemarketing bureau can call consumers with interesting offers. Typically, these companies conduct campaigns with a competitive message. The upshot of this is that consumers are more liable to sign up to something as they can win a prize and subsequently be called up with a good offer. See an example of a campaign run by Blue Energy here.

Here is an example of a campaign with a competitive message.

It is a CPL gamification campaign in which the consumer has to participate in a concentration game in order to enter a competition to win an iPhone. By involving the consumer in a game, he/she will remember the advertiser better. When the advertiser calls the consumer with a good offer, in most instances, the campaigns remains ‘top-of-mind’ and thus the quality is better and, at the end of the day, the conversion rate is higher.

Rito is also one of those companies that works seriously with affiliate marketing. And, they work with affiliate marketing in their own unique way.

“At Rito.dk, we differentiate ourselves from many other advertisers by being proactive in our work with affiliate marketing. Moreover, working together with an affiliate network we actively seek out potential publishers ourselves and do a lot to help the individual get off to a good start, irrespective of their level and experience.”

Kasper Toxvig, Affiliate coordinator, Rito

At Rito, they have communication with their publishers on an ongoing basis. They do this to keep them motivated and whet their appetite so that they try harder to generate even more sales.

Help your publihers to deliver more sales throug statistics research of each of them

“I delve into affiliate statistics on a weekly basis and see who is generating sales, and where those sales are coming from. That way, I quickly discover who is standing out and who has the potential to deliver more sales with a helping hand.”

Kasper Toxvig, Affiliate coordinator, Rito

In addition, Kasper also talks about the importance of placing as much emphasis on his large publishers as those publishers who have the potential to grow.

Kasper gives us a concrete tip on how he keeps their publishers keen.

Rito spends 10 minutes sending out messages to all affiliates with information on current offer campaigns and new products. This action is a contributing factor to Rito seeing their publishers push campaigns in their blogs, Facebook posts and newsletters etc. If you refrain from sending these messages to your publishers, it simply means that you will not be informing your internal marketing employees about future campaigns that are to be sent out.

Following on from this, Kasper also talks about the importance of placing as much emphasis on his large publishers as those publishers who have the potential to become large.

“We have secured an internal marketing team comprising 400+ registered publishers who market Rito.dk in precisely the way they are best at. This means that every year, additional millions in turnover are generated by affiliate publishers.”

Kasper Toxvig, Affiliate coordinator, Rito

If you would like to dig even deeper into Rito’s affiliate efforts, you can read more here.

To summarise this blog on Affiliate Marketing, we would like you to answer these 4 questions.

● Explain, in your own words, what is Affiliate Marketing?

● What are the advantages of working together with an affiliate network?

● What do you think are the two most relevant things when it comes to choosing an affiliate network, and why?

● What is Rito doing to keep their publishers motivated?

If you have a burning question or wish to comment on this blog, you are welcome to write your thoughts in the comments field. Thanks!

Read more about ViaBill here

ViaBill.com

We want to help you to make online shopping easy and flexible for your customers. And we want to give you specific advice on how to choose the most important things to focus on at your website.”

ViaBill

Written by

ViaBill

We want to make online shopping as easy and transparent as possible for you and your customers.

ViaBill.com

We want to help you to make online shopping easy and flexible for your customers. And we want to give you specific advice on how to choose the most important things to focus on at your website.”

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