By Todd Crawford on May 2, 2014
I have read many blog posts over the years about best practices around affiliate programs and thought I would finally chime in with my thoughts on this topic. I want to address a few aspects that I haven’t seen discussed before and provide a different perspective on some that have been discussed at length. I also want to expand the considerations beyond just the affiliate program so that it is better aligned with all of the other marketing channels. So here it goes!
This is the foundation of any affiliate program and often the most overlooked piece. Since many affiliate programs have been up and running for years, most affiliate managers don’t think about understanding how the program actually tracks. I recently presented as the keynote at Affiliate Management Days in San Francisco where I asked a room full of affiliate managers if they knew how their program tracked conversions and not one of them could raise their hand. Most affiliate programs track via a pixel or tag on the confirmation page. More and more, advertisers are conditionally firing this tag based on who drove the last referral. There are several ways to conditionally fire the tag. In years past, the most common method is having your developer write custom logic that will determine when/if the tag should fire. Today, most advertisers use a tag management tool to control this logic. Some advertisers still “hard code” the pixel on their confirmation page which could be over-crediting affiliates for conversions where they weren’t necessarily the last click. It is very important to understand how and when the tracking tag fires and whether an affiliate will get credit. If you don’t know this, there can be reporting and tracking issues down stream that cannot be resolved.
How and when does an affiliate earn credit for a conversion? Most advertisers have several marketing channels like paid search, email, display, social, etc. in addition to affiliate. All of these channels are competing to be the winning click. Should an affiliate get credit if they drive a click and the user then leaves and does several searches and ends up returning to the site via a paid search click? Are both teams, search and affiliate, claiming credit for this conversion? There was only one sale for $89.00, so you don’t want to count it twice. Today the best practice is to deduplicate across all marketing channels to prevent duplicate crediting and inaccurate data. This requires some type of dynamic tag firing logic or a solution that can do the depuping in real-time.
How long after the last click can an affiliate earn credit for a conversion? The most common practice is to set the cookie period for as long of a period as possible to favor the affiliate and make your program more competitive. However there are two things that might matter more. First, how quickly do conversions happen in general on your site? For most retailers, it is not uncommon for 90%+ of all conversion to occur within a few hours and 99% within 24 hours (check your own analytics to see what your numbers are). A second consideration is how are you tracking and crediting other channels like paid search, email, display, social, etc.? If these channels are measured and tracked on a 24 hour window, does it make sense to try and track affiliate on a 90 day window? Does this make sense considering the deduplication logic discussed above? Can an affiliate even earn credit beyond a few days given subsequent clicks from other affiliates or marketing channels? I recommend being consistent and using the same referral window for all channels.
Do you allow affiliates to earn credit for conversions with promo code or do you forbid the use of promo codes in the affiliate channel? Do you want to provide certain affiliates exclusive or unique codes that only credit them? Do you need to restrict certain codes from the affiliate channel like “friends & family” or direct mail promotions? If these are concerns, then you need to make sure you can easily manage these rules and control how and when promo codes can be used in an automated process.
How and when are your affiliates paid? Many affiliate networks control the timing of payments to your affiliates. This means you need to treat all affiliates the same. You also need to have your finance department process payments based on the network’s rules instead of your company’s internal policy. It can sometimes be an advantage to pay certain partners sooner or on a different schedule to help with their cash flow which they can then reinvest into driving more conversions back to you. Conversely, your finance department might have issues getting payments back to the networks on time which causes anxiety with your affiliates when payment are late. If any of these are issues facing your program, you need to look for more flexible payment processing options from your affiliate management provider.
Many times reporting is taken for granted. You log in to your affiliate program and run some reports. However, most people don’t know what they are trying to measure and run reports for the sake of running reports (habits are hard to break). The first step to reporting is determining what data you need to measure. What are your goals and key performance indicators (KPIs) that you need to know and measure to be successful? Once you have determined these data points, then you can look for the data that will provide feedback and insights into your goals and objectives. Too many times I see affiliate managers going the opposite way – trying to use the standard reports to tell them how well they are doing. The problem with this is reports are dumb – they don’t know what you want. If you have specific goals and KPIs associated with your job or affiliate channel, you need to make sure you are getting those data points in your reports. For example, if your goals are to drive new to file customers then you need a way to identify which affiliates are driving the highest number of new customers and so you can work with them to drive more new customers.
Well, there you have it! These are a few of the key things all marketing managers need to consider when managing their affiliate channel.