A New Balance
How Web marketers and affiliates are restructuring strategies to ensure profitable relationships
December 2007 By Jeff G. Molander
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Direct marketers are becoming more proficient in vital Web strategies like search, yet they increasingly find themselves butting heads with their own affiliates who already have staked out valuable digital turf. Is it worth playing nice with affiliates? If so, how can marketers maintain healthy doses of affiliate-generated sales while maximizing incremental revenue and avoiding cannibalization of search campaigns?
Such questions demand answers. The competitive search environment is leading many marketers to prefer Web affiliates that send incremental visitors—those resulting in sales or leads that otherwise may not occur as a result of marketers’ own efforts.
Armed with affordable, easy-to-use Web marketing analytics packages, marketers are having an easier time gaining the vital understanding needed to produce such cravings for efficiency. In fact, some marketers are measuring success of cost-per-action (CPA) and cost-per-click (CPC) affiliate strategies in relatively new terms. For example, perceived ROI from performance-based strategies isn’t good enough. Marketers want more than effectiveness. They’re demanding efficient strategies.
Marketers increasingly realize that shoppers click around and touch multiple marketing campaigns before purchasing. A customer initially may be referred to a site by a paid search ad. He may then return to the site via a comparison shopping engine and then again through a CPA affiliate, at which point he uses a promo code from a direct mail piece—generating four distinct (often unconnected) points of marketing cost.
Affiliate programs often are targeted, with some marketers reconciling affiliate program performance with the influence of various other marketing channels customers come in contact with as part of the path to purchase. They’re zeroing in on efficiency and moving beyond a singular goal of increasing sales or leads.
This is a marked change from the more “hands-off” practice of years past where efficiency was all but blindly assumed. Is such an analytical approach necessary or beneficial and to what degree?
The Search Marketing Conundrum
This new focus on efficiency is putting stress on wildly popular CPA affiliate marketing strategies. After all, such affiliates work on a “pure performance” basis and historically have worked independently—without concern for marketers’ objectives beyond netting the sale or lead. Yet behind the scenes, marketers are asking more of affiliate publishers given their increasing savvy with search marketing (and awareness of competing affiliate tactics).
“As marketers increase their search campaign activity, they’re noticing affiliates are already there and have been for years now,” says Lee Gientke, business development manager of lead-generation clearinghouse LeadPoint Inc., in Los Angeles. “This has led to savvy direct marketers examining how affiliates use their trademarks … but more importantly, affiliate marketing’s inherent level of transparency is creating a desire to measure against simple marketer-side goals. Goals like paying mostly for incremental sales.”
Such questions demand answers. The competitive search environment is leading many marketers to prefer Web affiliates that send incremental visitors—those resulting in sales or leads that otherwise may not occur as a result of marketers’ own efforts.
Armed with affordable, easy-to-use Web marketing analytics packages, marketers are having an easier time gaining the vital understanding needed to produce such cravings for efficiency. In fact, some marketers are measuring success of cost-per-action (CPA) and cost-per-click (CPC) affiliate strategies in relatively new terms. For example, perceived ROI from performance-based strategies isn’t good enough. Marketers want more than effectiveness. They’re demanding efficient strategies.
Marketers increasingly realize that shoppers click around and touch multiple marketing campaigns before purchasing. A customer initially may be referred to a site by a paid search ad. He may then return to the site via a comparison shopping engine and then again through a CPA affiliate, at which point he uses a promo code from a direct mail piece—generating four distinct (often unconnected) points of marketing cost.
Affiliate programs often are targeted, with some marketers reconciling affiliate program performance with the influence of various other marketing channels customers come in contact with as part of the path to purchase. They’re zeroing in on efficiency and moving beyond a singular goal of increasing sales or leads.
This is a marked change from the more “hands-off” practice of years past where efficiency was all but blindly assumed. Is such an analytical approach necessary or beneficial and to what degree?
The Search Marketing Conundrum
This new focus on efficiency is putting stress on wildly popular CPA affiliate marketing strategies. After all, such affiliates work on a “pure performance” basis and historically have worked independently—without concern for marketers’ objectives beyond netting the sale or lead. Yet behind the scenes, marketers are asking more of affiliate publishers given their increasing savvy with search marketing (and awareness of competing affiliate tactics).
“As marketers increase their search campaign activity, they’re noticing affiliates are already there and have been for years now,” says Lee Gientke, business development manager of lead-generation clearinghouse LeadPoint Inc., in Los Angeles. “This has led to savvy direct marketers examining how affiliates use their trademarks … but more importantly, affiliate marketing’s inherent level of transparency is creating a desire to measure against simple marketer-side goals. Goals like paying mostly for incremental sales.”
Companies Mentioned:
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