Below we present our essential guide to choosing the best affiliate program

This is the second tutorial in our Affiliate Marketing Masterclass series. Part One, which explains the terminology used in affiliate and online marketing, is here.

Many people who are new to affiliate marketing get excited by the hype that most advertisers and their networks put out about the potential to make whopping commissions from promoting their affiliate programs and rush into marketing them with the requisite due diligence, usually to find out the hype was just that.

However, if you are serious about becoming a professional and profitable affiliate marketer you should meticulously scrutinise the affiliate programs which are available within your targets sector(s) and how much profit, if any, you are realistically likely earn from them.

To emphasise how important it is for you to assiduously research potential affiliate programs, Azam Marketing’s training manual for staff on which affiliate programs to promote runs to 5,000 thousand words long. It is arguably the most important document in our organisation, as we can make or lose hundreds of thousands of pounds based on our decision in terms of which advertisers to invest into marketing.

Here are our top ten tips on finding the very best affiliate program:

1. Is it completely free to join?

Most “get-rich-quick” partnership opportunities, especially if they are combined with a Multi-Level Marketing or networking marketing structure, will fail this test. They usually require a hefty sign-up fee and/or ongoing monthly investment and their actual raison d’etre is transferring money from the majorities to the minorities at the top of the pyramid.

The early bird catches the worm in these scenarios – those who join the program early will make money from those who join at a later stage. Where there isn’t a bona fide focus on selling a product or service but rather on recruiting others, if someone makes £50,000 from a program, 1,000 people stand to lose £50 each.

Legitimate businesses usually do not ask people to work for them (although, in all fairness, there can be exceptions: if, for instance, the affiliate program is providing worthwhile training resources to you as their affiliate, it may be fair for them to charge for the work that has gone into creating them). Unlike companies which generate most of their revenue from recruiting other affiliates and agents, genuine enterprises make their money from selling tangible products or providing value-added services.

2. How much commission does the merchant pay?

This may seem obvious, but the amount of commission you earn per lead or sale is critical. There’s no point spending time and money promoting a product that doesn’t pay well. You could end up spending more on marketing than you make back. It’s best to stick with marketing products with a high commission value unless you are in the rare position of having found a niche where you can sell vast quantities and make substantial overall commissions.

The profit margin many advertisers make on items is as high as 40% to 50%, and paying affiliates a 5% commission is not on. A merchant selling a t-shirt for £20 may have produced it for only £3. His mark-up is massive and offering the hard-working affiliate a one-off 50p in such a scenario is not a fair share of the retail price.

Don’t be misled by advertisers who claim their brand value compensates for miserly payouts. Having a reputable brand can help, but is not always the case.

An experiment done several years ago by one of the UK’s top affiliates, Kieron Donoghue, demonstrated how brand name advertisers can convert worse than non-brand ones. Not only were the likes of Tesco and Marks & Spencer paying 2% and 3% commission on Valentine flowers, but they were weaker at converting traffic than less well-known merchants such as Bunches and Flowers Direct who were paying 10% and 15%:

Tesco Flowers – 11% conversion rate – 31 sales – £21.04 commission
Bunches – 16% conversion rate – 35 sales – £98.54 commission

Big brands also tend to have more ‘leaks’ on their websites i.e. the have advertising or promote products and services that don’t earn you commission. A case in point is Amazon, whose web pages give a signficiant amount of real estate to advertising and to products that make them a packet but earn you nadda.

It's essential to find the right niche!

3. How relevant is the advertiser to your audience?

You are highly unlikely to make much money if you market affiliate programs that don’t have much relevance to your website, email list or social media audience. A lot of novice webmasters join a bunch of affiliate programs and figure if enough of them pay off they’ll make a bucket-load of money – when in actual fact the affiliate site will just end up looking like one big spammy advertisement.

Your main assets are your content, your traffic and your knowledge of that traffic, so it’s a much better idea to pick a small number of affiliate programs that best serve your visitors and supplement your content. For example, if you’ve reviewed a hotel on your site, you could link to an advertiser who is selling rooms at said hotel at a competitive price and offering you a fair remuneration. This is an excellent way both to serve your visitors and to make money off your website’s audience.

4. How established is the advertiser and how much traffic / sales is their website getting?

You can readily find out how long most businesses have been going by looking online.

In most Western countries, you can also study the accounts of incorporated companies online for free or a nominal sum. This information is valuable in letting you know how long the company you’re looking to partner with has been in business, what their turnover is and the like.

A good tip is to try to discover the amount of traffic the advertiser’s website is already receiving. Alexa is a pale imitation of what it used to be, but is a useful tool for this. If a website is ranked in the top 20,000 in most countries, the advertiser is getting a significant amount of traffic. If it is ranked below 100,000 it is likley to be a retailer who does not have many customers (which means they are probably not great, but it could be a golden opportunity to make money as they’re unlikely to have many affiliates actively promoting them).

Always research an advertiser products etc. thoroughly if they haven’t been in business for a long time, their website has a low traffic ranking or they haven’t got a sizeable turnover as these are red flags. It may be a good idea to order the product yourself if you can afford to. Otherwise you could do a search to find out if there are any adverse comments about the retailer or their products. If all is well and the product is good, you could have found a gold mine – but there’s a lot more to considerable.

5. Will they serve your appetite for cookies?

How long is the merchant’s cookie period?

Many customers do not buy on their first visit to a merchant’s website. It is important therefore that the merchant provides a reasonable cookie period for their affiliate program so that you get credit if the customer returns and buys at a later date. The longer the cookie lasts the better the chances of you getting paid.

6. Does the merchant track non-cookie sales?

Cookies are not always a reliable method of tracking sales back to affiliates. People often have cookies turned off in their browser or they get deleted. They may use a different computer from when they first clicked through to an advertiser.

Most major networks now track a sale even if cookies are turned off and there are even a small ratio of affiliate programs that pay you even if a customer purchases via the phone.

In terms of rewarding affiliates for repeat purchases, some merchants employ database tracking. This tags a customer to an affiliate when he or she registers and/or buys their first item. The affiliate then gets paid on any future purchases, no matter which computer the customer logs in from and whether the original cookie has been deleted or not.

Avoid sending your hard-won traffic to an advertiser if they do not have robust tracking solutions in place to track back both the original and follow-up sales back to you. Which takes us to another important point to consider…

7. Does the merchant pay recurring commission?

Not many businesses can make a profit off the first sale alone. Yet the way most affiliate programs are structured, you earn a commission for sending a customer to an advertiser’s site and then, even though the customer is likely to shop with that advertiser again and again, you’ll only ever get paid on the first purchase.

Prioritise affiliate program which pay recurring commissions.

8. Does the merchant have a dedicated affiliate manager?

Many merchants don’t invest in a staff member who is given a sizeable chunk of hours every week to manage their affiliate program, whether that person is in-house or at an agency. Try to avoid these companies unless they have a proven track-record and their commission rates are exceptionally high. The reason is that, when problems occur – which they do on a frequent basis with doing anything that involves an intersection of IT and business! – it can be a painful process getting matters resolved.

9. What marketing materials and linking options are available?

Look at the quality of marketing resources that each merchant provides.

Do they provide well-written copy for affiliates? Do they provide dynamically-updated creative that promotes seasonal campaigns, their bestselling products and the like? Do they provide coupon codes, co-registration boxes, email marketing creative and deep-linking methods for affiliates? Are they willing to put together creative specifically for their online sales team, aka their affiliates?

Make sure banners have a strong call-to-action and do not prioritise the merchant’s name or URL, which can encourage people to visit their website directly and means you don’t earn any commission.

If the marketing material and linking options they provide is decent then it demonstrates they are serious about affiliate marketing.

10. How well do they convert?

One of the advantages of many of the best affiliate networks is they provide conversion metrics. You can see which merchants are great at converting visitors to sales/leads and which are not so good. This information is critical to your success.

One of the most important figures to study in this respect is the EP(H)C (Earnings Per (Hundred) Click(s)) and compare them between your shortlisted advertisers.

If a network does not publish conversion metrics because a merchant has just joined them, be savvy and wait a while. Let other affiliates spend their precious time and money testing the waters.

You can usually get an insight into how well an affiliate program is performing by studying its metrics on the leading cashback websites in your territory. They often publish data on how well it is performing.

Data on Maplins UK affiliate programFor example, this link takes you to the Maplin Electronics page on TopCashback UK. The Tracking Stats are in the bottom right-hand corner, and we’ve taken a screenshot with this data which you can see to the right of this text.

These demonstrate that the affiliate program is not anything to write home about as, not only do they pay a low commission, but a fairly large ratio, 3%, of leads require “Manual Claims”, which means the commission has to be manually acquired from the advertiser. (The actual amount of sales that don’t track for this advertiser is likely to be much higher than 3% as many people don’t have the time and energy to jump through all the hoops to claim their missing cashback.) Also Maplin’s “Avg Payment Speed” is a ridiculous “25wks 5 days”; by comparison Maplin’s competitor eBuyer is “2 wks 5 days”.

As an aside, studying how much cashback the “100%” cashback sites provide their users gives you a valuable insight into how much commission they may be receiving and what you could try to negotiate with the advertiser for yourself.

If conversion statistics are not available anywhere, then email the advertiser’s affiliate manager and ask for them: many are surprisingly forthcoming. But do take what they say with a pinch of salt – they are not likely to be transparent if a program is a poor converter! You could also try asking other affiliates in online communities.

Our Affiliate Marketing Masterclass will continue, with tutorials for both publishers and advertisers, so stay tuned!