Affiliates? What Does It Do for Metrics?

July 13, 2009

Affiliate marketing makes plenty of noise inside of your results from your favorite search engine. With all of the news about Amazon affiliates being cut off in Rhode Island and North Carolina it appears that many are sounding off about why or why not one should participate as an affiliate in the many programs available. Too often though these discussions revolve around being an affiliate rather than paying one to help you sell your goods and services, a side of the relationship that is often overlooked by small business owners. Not only can having your own affiliate program sell more, but subsequently increases your sites’ traffic – meaning more metrics! Here are 3 reasons why using affiliate marketing may or maynot improve your sites’ metrics:

Marketing and media professionals are managing numerous projects as they comb through budgets, keep up on all the latest trends, launch new campaigns, approve art work, mood boards and banner ads – all before lunch. Affiliate management programs like ClickBank and LinkShare allow your campaign to have a wider breadth across the net while also grabbing a stronger niche presence. These management companies provide the network of affiliates, handle the transaction between the consumer, you and your affiliate as well supply their own set of metrics. Your metrics can improve because the traffic that will be provided by your affiliates is coming from the vast corners of the web and blogosphere that you could have never reached alone. Metrics improved: Visits, New Visits, Visits by Source

This new audience isn’t only showing up on your Google Analytics report because a couple of affiliate bloggers threw up a link on their site. In most cases those clicks are coming from readers who have established a relationship with your affiliate and have granted them a certain amount of trust and loyalty. This is priceless for your small business because to the online community you are not human, you’re corporate; non-humans cannot be trusted. Bloggers are human though and can provide a voice for your goods or services that your business could never accomplish despite your best effort. In a small way, this is the Oprah effect; someone who has established trust with a group and when they endorse or refer that group to a product, that product is now more trustworthy. These affiliates can also be experts in the field you deal in, giving the consumer a comfort level not found with a mere enthusiast. They will throw aside their inhibitions as they feel the expert advice is justified in their experience and this trust will flow over to the pages of your site. Metrics improved: Pages Per Visit, Average Time on Site, Visits by Source

Amongst the benefits affiliate marketing can bring to your metrics, there are some possible negatives that should not be ignored. The humanizing of a brand through an affiliate posting is usually not controlled by the marketer, creating an opportunity for a lack of professionalism through the words of an affiliate. You can also hurt relationships with brick and mortar partners who depend on being able to sale product from their locations and make a commission from sales originating from their website. According to Goldschmidt (2004) “the traditional value chain might change where we experience a blurring of boundaries between value activities and supporting activities. This merger between retailing and advertising media is the foundation for affiliate marketing on the Internet,” (p. 11) and trying something different could cause retailers to walk away. Could Sony afford to have Best Buy’s traffic disappear? Possible problems can occur for the affiliate if you have to change the URL of a product due to site reconstruction or maintenance, and if an affiliate has to move the location on their end, your metrics are now skewed as it may report those views are coming from a new location despite being inside the same affiliate site. Lastly, affiliate marketing programs are under investigation by many state governments as they search new opportunities for tax revenue. This is why Amazon has pulled affiliate programs from North Carolina and Rhode Island while closely watching California and Hawaii. This could create additional taxes for your business to pay to the state where your affiliates website was created or managed. Metrics Not Improved: Visits, New Visits, Visits by Source, Pages Per Visit, Average Time on Site, Brand Equity

Despite the possible negatives and the hoped for benefits of affiliate marketing programs, small businesses must remember the 80/20 rule when exploring any marketing campaign; 80 percent of the business from a campaign will come from only 20 percent of those who experience it. That 20 percent is vital to your livelihood because collectively it provides 100 percent of your business. Affiliate programs are not always going to be a home run for your campaign, but it is one of the many bases you should cover as a media or marketing professional.

Sources:
-Digital Products Retailer: Affiliate Program & Sell Online – ClickBank. (n.d.). Retrieved July 13, 2009, from http://www.clickbank.com
-Affiliate Programs – LinkShare. (n.d.). Retrieved July 13, 2009, from http://www.linkshare.com/
-Goldschmidt, S., Harris, U., & Junghagen, S. (2004). Strategic Affiliate Marketing. london: Edward Elgar Pub.
-Sage, A., & Orlofsky, S. (2009, June 30). Amazon, Blue Nile sever Web affiliate programs | Technology | Reuters. Retrieved July 13, 2009, from http://www.reuters.com/article/technologyNews/idUSTRE55T69D20090630

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