Affiliate marketing is hot; here's how to get your program going

Nearly every retailer in the Internet Retailers' Top 500 has an affiliate marketing program. Now free affiliate networks, automation software, and pay-for-performance compensation models are making it easy for small businesses to take advantage of this marketing tool. In the popular An Hour a Day format, this guide features a detailed, real-world, task-based approach to developing, launching, and managing a successful affiliate marketing program. It explores market research, determining payment models and reporting guidelines, recruiting affiliates, crafting appropriate communications, and much more.

• Affiliate marketing programs help boost marketing efforts without incurring excessive costs; this Hour a Day guide provides everything merchants, business owners, and those charged with managing an affiliate program need to know
• Offers a modern, real-world, step-by-step guide to researching, launching, managing, and optimizing a successful affiliate marketing program
• Covers social media; creating policies; working with feeds, coupons, widgets, and video; creating compelling content; handling partners who are not meeting goals; and much more

Affiliate Program Management: An Hour a Day is the do-it-yourself guide to planning and maintaining a successful affiliate program.

Foreword xxvii

Introduction xxix

Part I History, Terminology, and Introductory Remarks 1

Chapter 1 Understanding Affiliate Marketing 3

What Is Affiliate Marketing? 4

Affiliates, Subaffiliates, and Superaffiliates 5

Affiliates 5

Subaffiliates 6

Superaffiliates 7

Universality of Affiliate Marketing 9

Marketing Channels and Types of Affiliates 9

Content Publishing 10

Couponing 10

Data Feeds 11

Email Marketing 12

Paid Search 12

Loyalty Marketing 12

Social Media 15

Video 15

Popularity 17

Chapter 2 Budget, Payments, and Related Considerations 19

Budgeting 20

Performance-Based Models 21

Interaction with Other Channels 24

Reversal Policies and Related Considerations 25

Duplicate Orders 27

Locking Periods and Lock Dates 27

Consider a Nonreversal Policy 29

Part II Month 1: Pre-Launch Research and Analysis 31

Chapter 3 Week 1: Perform Competitive Marketing Analysis 33

Monday: Understand SWOTT Analysis 34

Tuesday: Identify Strengths and Weaknesses 36

Strengths 36

Weaknesses 36

Wednesday: Evaluate Opportunities, Trends, and Threats 37

Opportunities and Trends 37

Threats 39

Thursday: Present Your Analysis to Your Boss/Client 39

Friday: Develop a Competitive Intelligence Strategy 41

Join Affiliate Programs 42

Follow Competitor in Other Ways 42

Set Up Automatic Monitoring 43

Employ Traffic Monitoring Tools 44

Chapter 4 Week 2: Understanding Tracking and Reporting 47

Monday: Evaluate Affiliate Networks 48

Affiliate Networks 48

Tuesday: Understand CPA Networks and How They Work 56

Wednesday: Assess In-House Solutions 61

Making the Choice 63

Thursday: Analyze Payment Options 64

What Do Affiliates Prefer? 64

Outsourced Payment Solutions 66

Friday: Understand the Importance of Cookies 67

Chapter 5 Week 3: Evaluate Program Management Options 69

Monday: Understand the Basics 70

Autopilot vs Proactive Management 70

Key Management Elements 71

Manage the Program, Not Affiliates 74

Tuesday: Set Your Expectations 74

Wednesday: Outline Qualifications and Certification 76

Affiliate Program Manager Qualifications 76

Education and Certification 77

Thursday: Weigh In-House vs Outsourced Solutions 78

Friday: Determine Compensation and Draft Contact 80

Determining Compensation 80

Drafting the Contracting Agreement 82

Sample Outsourced Program Management Agreement 86

Chapter 6 Week 4: Finalize Payment Models and Cookie Life 89

Monday: Decide on the Payment Models to Use 90

Tuesday: Determine Whether You Need a Two-Tier Program 94

Wednesday: Study Cookie Retention Data and Make Conclusions 95

Cookie Retention Rates 95

Return Days Analysis 96

Conclusion 99

Thursday: Calculate Commission Budgeting in Incentives 99

Incentives and Tiered Commission Increases 101

Types of Monetary Incentives 101

Friday: Finalize Overall Payment Terms 104

Qualifying Action 104

Cookie Life 104

Payment Models 104

Commission 105

Incentives 105

Locking Period 105

Part III Month 2: Setting Your Affiliate Program Up 107

Chapter 7 Week 1: Develop Creative Inventory 109

Monday: Review Types of Creatives Used by Affiliates 110

Deciding Where to Start 115

Tuesday: Understand and Put Together Text Links 117

Wednesday: Learn About Banner Usage and Popular Sizes 119

Banner Sizes 119

File Size 121

Thursday: Review Banner Creation Mistakes and Work on Banners 122

10 Mistakes to Avoid 122

Examples of Good Affiliate Banners 124

Check What’s Working for Your Competition 125

Friday: Develop a Dynamic Creative Policy 126

Chapter 8 Week 2: Data Feeds, Coupons, and Plug-Ins 129

Monday: Learn About Data Feeds 130

How Do You Create a Data Feed? 131

Data Feed Standard 132

Tuesday: Study and Avoid Common Data Feed Mistakes 133

Wednesday: Discover Feed Importing Options 136

Computer Programs 136

Online-Based Solutions 136

On-Server Applications 140

Private-Label Solutions 141

Network-Based Solutions 142

Thursday: Develop Your Coupon Strategy 143

Solution to Possible Conflict with Coupon Affiliates 144

What Coupons Should Merchants Offer? 145

Types of Deals That Convert Best 146

What Makes a “Killer Coupon”? 146

Landing Pages for Coupons 147

Friday: Understand Add-Ons and Plug-Ins 149

Chapter 9 Week 3: Research and Develop Program Policies 153

Monday: Work on Your Coupon and Discounts Policy 154

Pseudo-couponing 154

Examples of Coupon Policies 156

Tuesday: Develop Your Trademark Policy 158

Trademarks and Paid Search 158

Trademarks and Domain Names 159

How to Word the Agreement 160

Wednesday: Formulate Policies Regarding Loyalty and Rebates Affiliates 163

The Rotten Apple 164

Thursday: Word Your Recommendations on Affiliate Disclosures 167

Requirement to Disclose Relationships 167

Implications for Affiliate Marketers 169

Everyone Is Accountable 170

How to Word Disclosures and Agreements 171

Friday: Finalize Your Affiliate Program Agreement 172

Chapter 10 Week 4: Final Brushstrokes 183

Monday: Implement Tracking and Test the System 184

Tuesday: Prepare the Text for Three Email Templates 185

Application Receipt 186

Approval Email 187

Recruitment Phase 190

Welcoming Phase 190

Routine Phase 191

Additional Approval Emails 191

Denial Email 192

Wednesday: Set Up Your Affiliate Program Support Base 193

Sign-up Link 194

Nonexistent Link 194

Broken Link 194

No Real Info 195

Vague Verbiage 195

Program Bio 195

Mini-Sites 196

Five Common Problems with Text 200

Email Address 201

Thursday: Prepare Announcement Text 201

The Checklist 201

Three Types of Calls to Action 201

Sample Announcement 202

Friday: Compile Lists of Keywords and Best Sellers 204

Keyword Lists 204

Best-Seller Lists 209

Part IV Month 3: Program Launch and Affiliate Program Management 211

Chapter 11 Week 1: Launch the Affiliate Program and Recruit 213

Monday: Announce Program Launch 214

Press Release Websites 214

Affiliate Marketing Websites 214

Affiliate Program Directories 216

Social-Media Channels 218

Affiliate Networks 218

Tuesday: Study Affiliate Recruitment Tools and Techniques 219

Free Recruitment Tools 219

Seven Avenues of Affiliate Recruitment 220

Wednesday: Develop a Direct-Contact Recruitment Strategy 227

Three Forms of Direct Contact 228

How Not to Do It 229

How to Make It Shine 230

Sample Texts for Affiliate Recruitment 233

Thursday: Formulate Your Social Media Approach 236

Types of Social Media and Where to Start 236

Essential Points to Remember 237

Blogging Tips 238

Get Ready to Rock ’n’ Roll! 240

Friday: Plan to Attend Conferences and Shows 240

Affiliate Marketing Conferences and Events 241

Other Conferences on Online Marketing 242

Chapter 12 Week 2: Plan Your Affiliate Communication 243

Monday: Study Affiliate-Preferred Channels of Communication 244

Global Problem 244

Preferred Communication Channels 245

Two-Way Symmetric Communication 246

Types of Communication 247

Tuesday: Decide on Frequency of Newsletters and Approach 247

Communication Frequency and Response Time 248

Formulate Your Approach and Stick to It 249

Wednesday: Learn How to Put Together Affiliate Newsletters 250

Affiliate Newsletter Format and Characteristics 250

Three p’s to Remember Before Hitting Send 251

July Winners 252

August 2009 Promo 253

Creatives 253

Meet Us at Affiliate Summit East 2009 253

Motivating Through Newsletters 255

Thursday: Launch Social-Media Efforts 256

Affiliate Forums 256

Microblogging 258

Social Networking 259

Friday: Start Writing Your Affiliate Program’s Blog, Developing FAQs and Tutorials 260

Basic Questions 260

Detailed Instructional Section 261

Chapter 13 Week 3: Program Management 265

Monday: Categorize Affiliates 266

Tuesday: Develop Fraud Prevention Policy and Enforcement Rules 268

Fraud Prevention 268

Enforcement Policy 271

Wednesday: Start Profiling Affiliates 272

Thursday: Forget About Managing, and Start Leading! 274

Twenty Differences Between Management and Leadership 275

The Four Most Valued Characteristics of a Leader 277

It’s All About Emergent Leadership 280

Friday: Become a Transformational Leader 281

Chapter 14 Week 4: Affiliate Motivation 285

Monday: Learn About Motivation in General and Marketing to Marketers in Particular 286

Motivation Is Always Multifaceted 286

Keys to Moving Mountains 287

Focus on Personal Advancement, Needs, and Goals 287

Forget About “Motivation” by Threat 288

Tuesday: Study Contingency Theory 290

Contingency Approach 290

The Nature of Affiliates 291

Applications of Contingency Models to Affiliate Program Management 291

Wednesday: Understand How Extrinsic Motivation Works 294

Five Golden Rules of Successful Extrinsic Motivation 294

Examples of Incentive Campaigns 295

Motivation by Money vs Autonomy, Mastery, and Purpose 297

Thursday: Learn More About Intrinsic Motivation 298

Intrinsic Motivation—The Ultimate Goal 299

Nicholson’s Method and Affiliate Context 300

Motivating Culturally Diverse Affiliates 301

Friday: Arrive at Your Own Optimal Approach 302

Part V Month 4: Advanced Management and Analysis 305

Chapter 15 Week 1: Study and Learn to Deal with Parasitism and Problematic Affiliates 307

Monday: Monitor Red Flags in Affiliate Applications 308

Tuesday: Learn About Affiliate Parasitism 313

Three Types of Parasites 313

Program Agreement 314

Cookie Stuffing 315

Wednesday: Educate Yourself on Adware and Toolbars 316

What Parasites Are and How They Work 318

What Affiliates Think 320

Thursday: Police Trademark Violators 320

Platform-Based Tools 321

Independent Tools 321

Friday: Learn About Coupon Theft and Copycat Sites 325

The Problem 325

The Solution 326

Copycat Sites 328

Chapter 16 Week 2: Master Affiliate Program Analytics and Optimization 329

Monday: Understand What KPIs and Metrics to Focus On 330

KPIs for Advertisers/Merchants 330

Tuesday: Split Test to Improve Conversions 332

Conversion Optimization 333

What to Test 335

How to Test Effectively 336

Wednesday: Explore Alternative Tracking Solutions and Compensation Models 337

Cookieless Tracking 338

Alternative Compensation Models 338

Thursday: Engage in Ongoing Competitive Intelligence 342

Why? 343

How? 343

What? 344

Friday: Analyze Progress and Stay Informed 346

Monitor Affiliate Program Performance 347

Be on Top of Industry Trends and Developments 347

Chapter 17 Deadliest Mistakes to Avoid 351

Mistakes, Errors, and Lessons to Learn 352

15 Mistakes Committed by Merchants 352

Mistake 1: Leaky Websites 353

Mistake 2: “Autopilot” Approach to Affiliate Program 354

Mistake 3: Unclear or Absent Program TOS 354

Mistake 4: Nonexistent PPC Policy 354

Mistake 5: Embarrassing Commission Rates 354

Mistake 6: Short Cookie Life 354

Mistake 7: Insisting on Home Page Links 355

Mistake 8: Insisting on Promotion of Best Sellers 355

Mistake 9: Commission Drops 355

Mistake 10: Lack of Advanced Notifications 356

Mistake 11: Late Payments 356

Mistake 12: Changes That Affect Affiliate Links 357

Mistake 13: Tampering with Tracking Code 357

Mistake 14: Unrealistic Goals for Commission Increases 357

Mistake 15: Asking for Something You Cannot Return 358

25 Affiliate Program Management Mistakes 358

Mistake 16: Managing Affiliates 358

Mistake 17: Assuming You Are Smarter Than Affiliates 358

Mistake 18: Assuming All Affiliates Are Prone to Fraud 359

Mistake 19: Terminating Inactive Affiliates 359

Mistake 20: Practicing a “One-Size-Fits-All” Approach 360

Mistake 21: Believing Money Is the Best Incentive 360

Mistake 22: Being Impersonal 360

Mistake 23: Belated Approvals 360

Mistake 24: Untargeted Recruitment Emails 360

Mistake 25: Use of Email Addresses Based on Free Servers 360

Mistake 26: Not Responding to Affiliate Emails and Questions 361

Mistake 27: Failing to Maintain an Ongoing Communication Channel 361

Mistake 28: Informing Affiliates of the Obvious 361

Mistake 29: Ignoring Affiliate Suggestions 362

Mistake 30: Low-Quality Answers to Questions 362

Mistake 31: Asking Affiliates How They Can Do Better 363

Mistake 32: Selective Helping 363

Mistake 33: Typos, Spelling Mistakes, and Code Errors 363

Mistake 34: Insisting on Phoning 363

Mistake 35: Termination of Affiliate Accounts Without Notice 363

Mistake 36: Dryness and Blandness 364

Mistake 37: Unkept Promises 364

Mistake 38: Ultimatums 364

Mistake 39: Showing One Affiliate’s Site to Others 365

Mistake 40: Failing to Admit Mistakes 365

Chapter 18 Affiliate Program Promotion Ideas 367

Sharing Ideas 368

Better Base Conditions for Select Affiliates 369

Free Domain Giveaway 369

Arithmetic Progression Bonuses 370

Cobranded Version of a Good Affiliate Tool 370

Segment Your Products 371

Learn to Celebrate 371

Run “Happy Weeks” 372

Classic “Happy Week” Idea 373

An A-B-C-D-E Idea 374

A 1-2-3-4-5 Idea 375

Colors Idea 376

Lingua-Symbolic Idea for One Week 377

Sliding Scale of Commission Increases 379

Bonus Weeks 380

Growth Tied to Commission 380

Offer Tripled Commission 380

Run a Lottery 381

Let Them “Test-Drive” It 383

Offer 100-Percent Commissions 383

Run a “Free Graphics Help” Week 384

Award “Every-Third-Sale” Gifts 384

Cash for Everything: CAIs, FSBs, and So On 385

Cross-Program Promotions 385

Dynamic Scripts 387

Commission-Beating Policy 387

Exclusive Coupons for Select Affiliates 388

Time-Sensitive Private Offers 388

Free Content Help 388

Activation Incentives 389

Turn a Sale into a Contest 390

Glossary of Abbreviations 393

Index 401