Groupon says its focus is on the bottom line, rather than top-line growth.
Not all affiliate marketing sites are created equal. Those that generate more sales get more attention and perks from affiliate management networks and the retailers who benefit from the sales.
When FatWallet.com, an information and shopping services site, launched in 1999, it signed on as an affiliate with affiliate services provider Performics Inc. “When we started, there were merchant programs we wouldn’t even get approved into because we were an unknown,” recalls Tim Storm, president and founder of FatWallet Inc.
Today, it’s a different story for FatWallet, now among Performics’ top-performing affiliates. When a new merchant is about to go online with Performics, for example, Performics will alert FatWallet and seek to get the affiliate and the new merchant talking even before the program goes live so as to maximize the relationship.
“The relationship definitely increases as time goes by,” says Storm. “When you become a proven performer, you get a lot more respect from a network than if you threw a site up yesterday. At this point, the majority of information on offers is fed to us from the networks or from the merchant’s affiliate manager. It is much more effective for us that way than to go hunting from among the hundreds of merchants and thousands of offers we could put up to try to find what’s new.”
That kind of attention is just one of the perks enjoyed by affiliates who make it into ranks of top producers for affiliate networks and their merchant partners. While new affiliates receive tools and support from network services providers as soon as they sign up with the network, it’s up to the affiliate to use them so as to drive traffic and sales on merchant partner sites. Those who succeed get the attention of the affiliate services networks, which continually monitor network activity for the kind of fit between affiliate and merchant that could produce even higher numbers with some extra help.
That extra help can take the form of anything from additional time from affiliate network staff, to access to network technology that makes it easier for the affiliate to select, post, and update merchant offers, to monetary incentives such as rewards beyond a base pay-per-click for hitting specified sales targets.
It even includes counsel when conflicts arise-and they do. “Sometimes you will see a top affiliate and a top merchant at loggerheads with each other. One wants something the other is unwilling to give,” says CEO Stephen Messer of LinkShare Corp. “It could be a merchant who says that the affiliate is giving him a lot of repeat customers so he’s unwilling to provide additional discounts. The affiliate could say he’s giving the merchant so many repeat customers because the merchant isn’t giving him anything new to attract new shoppers to the site. There are misunderstandings and true disagreements that just need to find alternative solutions.”
When judging the contribution of their affiliates, merchants want to understand, beyond sales, what the affiliate adds to the transaction that the merchant does not. That desire to understand extends to gauging the value delivered by the networks themselves. As affiliate marketing becomes increasingly more complex, a key part of that answer is the networks’ role in helping to decide what level of services and support affiliates get, and from which merchants. Because those services draw on the resources of the affiliate network provider, the merchant, or both, they aren’t universally available to affiliates. The networks’ job is to help invest them where they’re most likely to have an impact and drive results.
Over the years, network providers have become increasingly sophisticated about making that determination. Affiliates that merit added attention and services are generally distinguished first-but not exclusively-by the volume of the sales they generate. Even so, affiliates in the top-producer club qualify for vastly different tools and services from the networks, depending on factors such as the affiliate’s business model, size, rate of growth and other factors.
Messer contends that affiliate service providers who don’t make such distinctions and push out merchant programs to affiliates based solely on volume are missing the boat. LinkShare has created approximately 35 categories of affiliate that it tracks via an internally created software system that segments them according to different variables. Within those categories, affiliates get different technical support, merchant partner offers and other services based on a blended ratio of sales volume and growth rate. For it isn’t just the biggest and longest-established affiliates that can move the needle on sales for the merchant partners. “If someone is an up and comer, we want to make sure that the merchant and the affiliate get the benefit of the fast rate of growth they are having,” says Messer.
Affiliate services provider Performics starts by segmenting affiliate sites according to the reason people visit the site. “That lets us gain an understanding of the behaviors the affiliate and its audience will respond to,” says Chris Henger, senior vice president of marketing and product development.
Using those rules, an affiliate network service provider isn’t likely to propose a coupon program or free shipping offer to drive added sales at a top-performing charity site, for example. “They don’t create higher value for the type of buyer that goes to a charity site,” says LinkShare’s Messer. Because that buyer’s goal is to have more of his purchase go toward the charity, creating a program that drives 5% more of the sale back to the charity or cause will drive more sales from that type of affiliate, Messer says.
Deal hunters are a group with very different motivations, and that’s reflected in the kinds of services and programs the networks offer on merchant’s behalf to sites that attract this audience. Like other affiliate networks, Performics has technology that can send traffic from an affiliate’s page directly to the relevant product level-landing page of a merchant partner. “The business of shopping comparison sites like Shopping.com and Bizrate.com is driven by data feeds,” says Henger. “So every day we are moving data feeds from 50 different merchants. It’s an investment in technology on our end, as well as operational muscle to stay on top of all the changes to merchant data feeds.”