The conventional wisdom today is that retailers will get the best results from online affiliate marketing programs if they reduce affiliate relationships to a concentrated handful of the largest, top-producing affiliates. But that’s not always the case, as Buy.com’s experience with affiliate network LinkShare shows.
Buy.com saw its LinkShare affiliate program sales grow 37% in the fourth quarter of 2002 over a year earlier by increasing the number of its affiliate sales partners by 16%, according to LinkShare. Buy.com’s strategy was to target a group of affiliates defined within LinkShare as “core producers,” that is, smaller to mid-size affiliates that can be depended on to drive a few sales each month.
Spreading affiliate relationships to a larger number that produce sales, but in lower volume, rather than focusing on a smaller number of the highest-producing affiliates who command higher commission rates, helped Buy.com reduce its average cost per order by 22% or more than $1 over the previous year, LinkShare reports.
“Refuting the industry belief that a marketer should focus all their efforts on only the top performers, Buy.com proves that the smaller to medium-sized players perform a significant role in contributing incremental sales while helping to minimize costs,” says LinkShare CEO Steve Messer.
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