Partnering for Progress

It might surprise some direct marketers to find out that affiliates can deliver a more desirable demographic than the average online shopper.

According to a recent study from DoubleClick Performics, affiliate channel shoppers spend more — the typical order size via affiliate sites is higher. An affiliate shopper, the report also notes, tends to be slightly wealthier compared with the average Web counterpart.

Affiliate marketing offers a dependable, consistent channel for DMers looking to reach better prospects. The research shows 47.2% of affiliate shoppers have annual household income of $75,000 or more, while just 40% of average Web customers earn the same. Since affiliate publisher sites present visitors with commerce-oriented information, deals, offers and product descriptions, consumers there often are ready to buy.

It's reasonable, then, to assume that affiliate shoppers convert better and faster than those who come through other channels or even those that go directly to an advertiser's site. The channel's conversion rates consistently outpace other referral sources, including e-mail and search marketing, because affiliate publisher sites focus solely on converting visitors into buyers. Affiliate publishers earn a commission for driving a sale and/or a bounty for directing a valuable, predetermined online action to an advertiser's site.

Advertisers need to ask themselves some critical questions to ensure they're creating an environment where affiliate programs can flourish. How do these programs compare with those run in their other channels? How do they stack up to competitors' offerings? Advertisers' affiliate offers and commission structures must be competitive in order to achieve growth and success. Are they?

For an affiliate program to reach its highest potential, an understanding of the competitive environment is required — particularly when it comes to key competitors within an industry vertical. DMers that provide competitive offers that capture consumers' attention and extend affiliates rewarding commission structures have a better chance at success. The only way to understand this is by building a program that ensures marketers motivate consumers and affiliates to create a win-win-win situation. Advertisers ignoring this best practice should expect to fall short.

Effective time management is critically important. Monetary spending always is preset (as a percent of sales), but time spent is a controllable variable. Affiliates respond to those marketers that put in the time to reach and communicate with them. Talking on the phone with affiliates generally will produce more sales.

Another method for effective time management is measuring active and productive affiliates. Actives drive visits to a merchant's site; productives direct not only visits but at least one transaction during a specified period (usually 30 days). Adding new productive affiliates or boosting the output of existing ones is a key means of achieving growth in these programs. Many strategies exist to improve matters, such as giving productive affiliates more information, special promotions or exclusive offers to help better convert traffic.

Seasonality is another aspect to consider. As with any marketer, an affiliate's holiday shopping seasons present great opportunities. Crafting seasonal promotions and offers for affiliates can bring renewed recognition to a DMer's brand and engage consumers in unique ways.

The research encompassed several large merchant clients, the clients' key competitors within a category and the three major affiliate networks. Online activity for 63 affiliate programs was then analyzed to determine where visitors came from and their purchase behavior.

CHRIS HENGER (chenger@doubleclick.com) is vice president of affiliate marketing at DoubleClick Performics, Chicago.

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