Affiliate marketing is performance based marketing. Publishers («affiliates») convey visitors to an Advertiser, and get paid when the visitor performs an agreed action on the Advertiser's website, such as a purchase.
The model works with an affiliate network, a third party that handles technical and administrative aspects such as tracking, support and payment flows. The choice of affiliate network is often decisive for how successful your company becomes in affiliate marketing. We have compiled nine points that will help you as an advertiser make a more informed choice of affiliate network.
1. Fees and binding agreements
Do not pay a starting fee or a fixed monthly fee. Affiliate marketing is performance based, meaning the affiliate network makes money when it delivers sales to your site. If representatives of a network claim that they need a starting fee or fixed monthly fee, it usually means that they do not believe they can deliver enough traffic to you for it to be profitable for them. In such cases, it is better to choose a different network. Do not agree to have more than three months binding time. The network's cost of starting an affiliate program is not so high that they need to keep you longer than that if you are not satisfied.
2. Competitors
A typical mistake is to avoid affiliate networks used by competitors in order to reduce competition. This is wrong. Instead, you should search actively for the networks in which most competitors are present. Where competitors are present, you are more likely to find the most relevant publishers. Become a part of the same network and offer an attractive affiliate program in order to attract their established publishers.
3. The right company
Control which other brands and businesses are connected to the affiliate network. This is easily done by opening a publisher account and look through the affiliate programs that are offered. Does the affiliate network work with industries that do not suit you? Consider the fact that your brand might end up in the same newsletter or same blog posts from the affiliate network. You may not want to see your brand in connection with erotics and gambling. You should also consider the extent to which the network works with larger, renowned brands as these tend to attract publishers of high quality that might be of interest to you.
4. Quality, not quantity
Affiliate networks tend to brag about how many Publishers or websites are in their networks. However, the network’s quality, rather than the number of Publishers should be considered. Are publishers somehow evaluated before they are allowed to enter the network, in order to ensure certain quality and relevance? In some networks, this task might be left to you as an advertiser, and you can end up flooded by applications from foreign publishers or publishers that are not relevant for your business.
5. Transparency
Certain affiliate networks are so called black box networks. These networks don’t explain from which websites traffic origins and which publishers are attached to your program. In such cases, you will have to settle with an unspecified invoice at the end of each month. A successful affiliate program builds good relations to its publishers. In order to work efficiently with affiliate marketing it is important to see from where traffic originates, to determine both which affiliates earn compensation, and which should not be connected to the program. You should always be able to have a direct dialogue with your publishers. Control that the affiliate network of your choice:
- Clarifies which publishers and websites your traffic originates from
- Lets you choose which publishers should be connected to your program
- Specifies exactly which orders they have provided, which you are invoiced for
6. Technique
Ask questions related to the technique the affiliate network uses for tracking and reporting. Is it a proprietary system? Where does the development happen? Certain affiliate networks utilize platforms that are developed in the US, others are on ready-made solutions from international third-party suppliers. These systems can be less customized for the Nordic markets, and the networks have less opportunity to affect development of new functionalities.
7. Private persons
Payments to private individuals require certain administration of preliminary tax, employer's contributions and control information. Some affiliate networks, therefore, only allow companies to join as publishers. This excludes certain types of publishers, such as bloggers, because they usually do not work through their own companies. If blogs are an important sales channel for you, you should check that the affiliate network accepts private individuals as affiliates.
8. Support
You should always be able to have a close dialogue with your affiliate network. Evaluate how fast they are at answering emails, even in the evenings and at weekends. You can do this by sending a request to become an advertiser from their website, but also by registering as a publisher and submitting a support case. If the answer takes several days, there is a risk that you will end up in the same situation as a customer.
9. Background information
As with any supplier, you should check the company that runs the affiliate network. Check the annual report to see that the company has its finances in order and that they are as large as they claim to be. Make sure they have local employees in the markets that are important to you.
If the invoicing company is located abroad, you will have to account for VAT. If you run a VAT-free business or have a mixed business (from a VAT perspective), you must pay VAT to the Tax Agency yourself, even if a foreign company sends an invoice without VAT (called a reverse charge). In other words, VAT can not be avoided.
If you want to know more about how your company can use affiliate marketing, please contact anna.hjortaas@adtraction.com.
About Adtraction
Adtraction was founded in 2007. With offices in Stockholm, Helsinki, Oslo, Warsaw, Copenhagen, Madrid, Amsterdam, Berlin and London it is one of the largest affiliate networks in the Nordic region. We work on a performance-based compensation structure, completely without fixed fees. Transparency and superior customer service are our main strengths.
Companies that advertise through us include Åhlens, & Other Stories, Lendo, Bynk, Cervera and KICKS.