An affiliate network is comprised of three key components: the merchant (retailer), the publisher (affiliate) and the network itself. Publishers include display, cashback, price comparison, blogger networks, behavioural site engagement tools and much more. As a merchant, you simply pay a percentage of the net order value to a publisher who has generated a valid sale.
The levels of commission are fully configurable. For example, different amounts of commission can be paid on different brands or categories, and commission can also be paid at different amounts for new and returning customers. As businesses often place a heavy emphasis on acquiring new custom, offering first time buyers a higher rate of commission than an existing customer is a great way to attract new customers.
The network itself acts as the ‘middleman’ between both the merchants and the publishers. A merchant can sign up to a network to view which publishers are available and initiate discussions. Publishers can also sign up and see a list of potential merchants that they could start promoting. The network functions as a technical platform and relationship mediator, not only ensuring that sales are tracked and commissions are paid, but also that all parties are able to work together effectively
Affiliate campaigns are definitely not ‘one size fits all’. There are a wide variety of publishers out there and this includes voucher codes, cashback, display, content, shopping aggregators/price comparison, and blogs. Voucher codes are often considered to be one of the core aspects of affiliate marketing, but this is simply not true. It actually accounts for a very small piece of the overall revenue and the overall breadth of available publishers. An affiliate campaign can be fully targeted, and the merchant will always have the final say on which publishers are promoting their products/services.
This is not to say that voucher publishers (or offer-lead strategies) are not worth consideration. In fact, some of the biggest voucher code websites have over 8 million active users, which opens a great way to expand your audience and acquire new customers.
Because the nature of the CPA model places all of the risk on the publisher, the affiliate channel is extremely low-risk commercially. Commissions are only ever paid when a valid sale is placed (taking refunds, cancellations and fraudulent orders into account). This offers peace of mind that your cost-of-sale is always fixed and fully under your control.
Affiliate marketing should be an essential part of your overall online marketing strategy, helping you to extend your reach and expose your brand to audiences relevant to you, whilst increasing ROI. So, if you are looking for a more effective use of your advertising budget, then an affiliate network is right for you.
Want to learn more? Get in touch with one of our Affiliate Marketing experts on 01642 988 416.