Understanding the ‘Pay for Performance’ marketing basics

Affiliate Marketing is a well-established form of marketing for a business entity or individual keen to increase sales or leads. It is often termed Pay for Performance marketing. This method is considered a very effective customer acquisition and retention tool for online merchants who are in a position to work out the commission structure and pay only after tangible results come in.

Defining an affiliate and a merchant

An affiliate is, basically an independent entity, looking to promote any product/ service, in lieu of a commission if and when it’s purchased, or after leads are generated as a direct outcome of online promotional efforts. A merchant sells a product/service, and accepts orders as well as payment for them. The latter pays commissions to affiliates for sales through the online promotional initiatives.

The merchants can offer a wide array of products/ services. On their part, affiliates search for any merchant by category to fit their need, in order to utilize direct product links, or link either directly to the merchants’ site.

Affiliate marketing network avenues

Among the popular affiliate marketing networks usually recommended to clients are Commission Junction, Google Affiliate Network,  ShareASale and ClixGalore. A reliable program for affiliate marketing management invariably comprises these avenues for high, medium and low budget network. They mostly provide a trusted third party tracking.

With a single account, affiliates can take part in multiple merchant programs, to aggregate their earnings. Plus they give excellent support to affiliate members. Having your merchant program on any of these networks sure will help.

Stages or aspects of affiliate management project

Before we proceed further let us try to grasp the various stages or aspects of affiliate management project.

  • Initializing it (Tracking Code Setup) involves early consultation, initial call set-up, account set-up and tracking code consultation.
  • The next important stage is campaign optimization that incorporates affiliate site research, affiliate program submission to popular affiliate directories followed by conversion tracking.
  • Other key set of activities are banner ads, datafeeds and widgets.    
  • Google Analytics is another important component that essentially consists of basic set-up, profile set-up, detailed analysis and monitoring.
  • Gathering insightful reports – either weekly or monthly – is critical to follow-up and modifications.

How to choose an affiliate manager?

A question to be asked is whether you actually need an affiliate manager the answer to which will be determined by your needs, the domain, the scope of your marketing program, skills available in-house, resources at your disposal.

Your chosen affiliate management resource should possess requisite organizational skills, interaction skills, ability to pay attention to meticulous detail, knowledge of affiliate/merchant interrelationship and its intricacies, finer aspects of your online business, and enough experience of handling internet marketing operations.