Developing an Affiliate Marketing Strategy (Affiliate Models)

In this article, we will be looking at the different affiliate models a business can consider when planning their affiliate marketing strategy. We will then discuss the advantages and disadvantages of each model. 

Affiliate marketing (also known as performance marketing) is where a business rewards one, or more, affiliates for completing a set desired action. Actions can include any set activity including a visit, a sale or a download.

The affiliate model works on a commission based referral system, with a goal of building brand awareness and driving sales.

If you have knowledge on affiliate marketing, check out our previous article on our introduction to affiliate marketing, to get you up to speed.

What affiliate model should be used?

There are three affiliate marketing models to consider, and the correct model is that which is based best on the business needs.

1. In-house

Managing the affiliate programme in-house will give a business greater control over campaigns.

Bringing the affiliate marketing can also save a business a lot of money. Affiliate networks can charge as much as 30% per action and out-sourced agency staff will charge for the running and management of the programme on the advertisers behalf.

However, it is important to factor in the amount of resources and time that will be needed to manage an in-house affiliate marketing programme. There may be the need for dedicated affiliate managers to handle the relationships between the advertiser and the affiliate, as well as setting commission structures and tracking the results.

2. Affiliate Networks

The majority of advertisers running affiliate marketing programmes go through networks where they pay a fee for any set actions that are gained when using their platform.

Whilst they can be expensive, it can be a lot quicker to gain traction and growth through the network, compared to individuals operating alone. The networks also provide additional services such as tracking and anti-fraud capabilities.

3. Affiliate Agencies

If neither of the two models suit a business, they can look at working with an affiliate marketing agency.

The primary benefit of this model is often that good affiliate marketing agencies will have strong relationships with major affiliate networks.

Affiliate agencies will also be able to get a better understanding of the market the advertiser is operating in, their customers and the advertisers current capabilities. This means they can create tailored campaigns that suit the business and match-make with most appropriate publishers.

However, affiliate marketing agencies come with costs, and will often take a percentage of the sales or a flat rate. Having an agency work as a middle-man also means that the strength of the relationship between the brand and the advertiser is not as strong, compared to if they were conversing directly.

Next time, we will take a look at how to set the most relevant objectives and KPIs against your affiliate marketing campaigns. 

Do you want to talk to someone about running your affiliate marketing in-house, and getting all the tracking and fraud capabilities of an affiliate network?

Get in touch with one of our team today to find out about our latest performance marketing software.


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