How to get the most out of affiliate web sites
Affiliate web sites can offer substantial increases in sales and customer acquisitions, but they can also pose threats to a retailer’s brand and Internet search strategy, retailers Frederick’s of Hollywood and SeaEagle.com said during a session on affiliate marketing at this week’s Annual Catalog Conference. “Affiliates are outside sales people helpful in getting new customers, but you have to consider the brand equity,” said Danielle Savin, vice president and general manager of the Direct division at Frederick’s. “What does the affiliate do to your brand?”
Savin noted that 5% of Frederick’s direct sales are through affiliates, and that 75% of affiliate-generated sales are new customers.
Jeff Molander, principal of consulting firm Molander & Associates and the session’s moderator, said retailers using affiliates have to consider the risks of letting their Internet search programs come under the control of affiliates who outbid them on keywords or cultivate unwanted customer expectations. As a result, he said, more retailers are insisting that affiliates not include the retailer’s trademarked terms in the affiliate’s Internet search marketing strategies. More retailers are also paying closer attention to how affiliates play up their brand image, for example, discouraging affiliates from overly promoting discounted prices.
Frederick’s, for example, avoids working with affiliates that operate as discount sites to avoid building a reputation for Frederick’s as an off-price retailer, Savin said.
Getting the most out of affiliate programs requires strong relationships with top affiliates and closely monitoring those that may have adverse effects on a retailer’s brand and upset its strategies for pay-per-click and natural Internet search programs, added John Hoge, vice president of SeaEagle.com, an online and catalog retailer of boats and marine supplies. “Affiliates can bring in sizable orders,” Hoge said, noting that SeaEagle pays 12% commissions on sales from new customers and 5% for repeat customers. But he added that about half the time SeaEagle spends on its affiliate programs is in monitoring the approximately 5% of affiliates who put SeaEagle’s Internet marketing programs at risk, while spending the other half on building relationships with its best affiliates. “We need strong relationships and trust with affiliates,” he said.
Hoge said he will routinely check search engine Overture, which is owned by Yahoo Inc., to see how much affiliates are bidding on SeaEagle’s preferred keywords, including its brand name. “As long as affiliates’ keywords appear below ours, that’s a benefit to us,” Hoge said. “But we say that affiliates can’t outbid us for our key cost-per-click words. If they try to push us down in search results, we tell them not to.”
He added that the Google search engine doesn’t provide as much visibility into what others are bidding on keywords, but that he’ll monitor Google search results for SeaEagle’s key terms and contact any affiliates that appear too high in listings.
Both SeaEagle and Frederick’s said they actively assist their affiliates in improving promotional activity. SeaEagle will offer cash prizes to affiliates that work to increase sales through such steps as better site placement of SeaEagle product links, promotional pop-ups, targeted e-mail campaigns and in-store signage.
Frederick’s will encourage affiliates to participate in special promotions that Frederick’s is offering. “If we do free shipping, we let the affiliates know so they can promote it also,” Savin said.
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