What is affiliate marketing, and how do I set it up?
Affiliate Marketing is a marketing channel that helps brands connect with customers. By creating an affiliate program, brands don’t lose anything. A program can offer affiliate compensation only if a sale took place. We have reviewed what is affiliate marketing in depth in another post.
If your company has decided to explore the affiliate program opportunity, something that may give you peace of mind would be to connect with an affiliate marketing specialist. As with any other specialty, an expert can help you understand your potential with this channel. You can hire a consultant or an affiliate marketing agency that will review your case and provide a detailed plan tailored to your needs.
Once a specialist has evaluated your potential and you’ve made your decision to move forward with creating an affiliate program, you have a few options how to go about this. Your options are:
Create the program yourself and have your marketing team manage it
Hire an affiliate marketing agency to create your program and train your staff to manage it
Hire an affiliate marketing agency to create your program and manage it for faster growth.
Who needs an affiliate marketing agency?
If you’re a small brand or a start-up with just a few employees, in most cases, hiring an agency is the best choice. An agency with experience in growing programs from ground up will save you tons of time and money by eliminating mistakes you might make while trying to set it up yourself.
The agency will assign a dedicated affiliate manager to your program and provide reports on a weekly/monthly basis, or per your request. Also, agencies usually have discounts for program set-up with affiliate networks, which is a nice bonus.
Furthermore, the affiliate agency has tons of established contacts with publishers in diverse niches, which would have taken you months to research and get in contact with.
Here are the benefits of working with an agency:
worry-free program set-up
dedicated affiliate manager
weekly/monthly reports
connecting you with the right publishers
faster results
Who doesn’t need affiliate program management?
If you already have a few people on staff managing your marketing initiatives, such as a person who is working on PR and/or reaching out to influencers, you may go with the option #2 - “Hire an affiliate marketing agency to create your program and train your staff to manage it.”
The affiliate marketing interlinks with all other marketing channels, and having an affiliate program will help your specialists broaden their collaboration options.
If you add an affiliate marketing agency on top, this may create a) duplicated work, b) both your staff and the agency may reach out to the same publishers, and c) teams may begin to rely on the other to do the work and eventually, none of the tasks would be done.
If you’re still decided on moving forward with 3rd party help, ensure you eliminate these issues and have a clear communication flow between teams.
Factors to consider when choosing your affiliate marketing agency
The next step will be to make a list of factors and questions that are important for your brand to ask when looking to hire an affiliate agency.
1. How many affiliate programs do they currently manage and how big is the team? This question is relevant because you want to make sure the team has enough time to manage your program.
2. Relevant experience. Do they manage (or have they managed in the past) any related-niche brands, and how did it go?
3. What are the fees for their services? Do they charge a monthly fee, or a monthly fee + commission on sales? All of that has to be crystal clear.
4. Do they work with the 3rd party networks? For example, ShareASale, CJ, Rakuten, etc.
5. What are the fees for setting up and hosting a program on a 3rd party network? Understand the total cost for utilizing affiliate marketing.
6. What are the expectations on your end? What will you need to provide? (banners, content, budget, etc.)
7. How often will they provide reports?
Tip. Please keep in mind that, even though you may want to receive a report on a weekly basis, an affiliate program usually takes time to produce results. Ask the agency what they would recommend for reporting.
8. Agree upon and understand your expectations. I cannot stress this enough. Ask questions and know exactly what you’re getting into.
9. Great communication and vibe. This may seem like it doesn’t belong on the list, but it is very crucial. You need to feel comfortable to work with the team and trust their expertise.
Does your affiliate program perform?
There is no definite answer for when your program will start performing. From our experience, some programs start being profitable within the same month they were created, while some took 3-4 months, and still others took 4-6 months to generate sales. It largely depends on the niche, budget, and brand awareness. You can think about the affiliate marketing program as an SEO mix. The results of work may not be visible right away as it’s developing, but once it does, it is like a snowball rolling downhill. It just keeps growing!
To explain why it takes some time for some brands, here is an example. A publisher needs to be recruited (or your program is found), then an affiliate may request a sample/free trial for service. From there, he needs to use the product or service, and only then would he write a review. Also, it will take some time for that post to get indexed on search engines and get juiced from SEO. All that may take a month or two.
No matter if you’re working with an affiliate agency or managing the program in-house, set up your KPI’s and audit your program once a month with a bigger revision and evaluation every quarter.
If you’re not satisfied with the program management, order a program audit from another agency. This always helps to ensure you’re on the right path.
We have written a separate post about how to boost the affiliate program growth with improvement opportunities.
Conclusion:
Create or not to create? Before you start thinking about this, have a specialist/ agency review your affiliate potential in this channel. If it is a ‘Yes’, an affiliate marketing program can be run in-house or with the help of an affiliate marketing agency.
The agency may offer to create a program and train your staff or manage it for you. Be sure you understand the total cost for hosting the program and the agency fees. Ask the right questions and set up your expectations.
Learn more about GALP FAIR affiliate services.