While the share of traditional marketing is stagnating or declining in the overall market, the rise of online advertising is expected to continue this year.

The reasons for this prediction are quite obvious, as we all know that one major advantage of online marketing over traditional advertising categories is performance-based billing, a point that especially in times of economic crisis gets the attention of many companies. Marketers have few if any costs and only if there are results.

An extremely efficient, long-term oriented and risk-reduced business model is affiliate management. It is the online marketing activity with the strongest sales approach that provides excellent opportunities to expand sales channels and marketing activities on the internet. The focus is on generating qualified traffic, high-quality leads or direct sales of products and services on the internet to contribute to sales growth.

The provider, called advertiser or merchant, offers to promote products and services for a corresponding commission via a comprehensive and neutral transaction platform (affiliate program or network). The affiliate, also called publisher, is usually an online distributor, who then integrates the advertising on its website.

Affiliate networks allow an accurate assignment of success on an affiliate and advertising level, which means a completely scalable pricing model, based on a compensation commission for clicks, leads, or orders.

It is important not only to expand sales channels and activities on the internet, but also in getting additional free branding that effects and strengthens brand awareness, too. In addition, it allows increasing sales, while reducing customer acquisition costs and is of advantage regarding the transfer of the marketing risk to the distributor.

It should be noted that affiliates can choose from a variety of programs and they commonly select those that offer an attractive product or service so the conversion rate is high and they feel well taken care of.

Affiliate marketing has to be integrated as an instrument into the existing marketing concept and actively operated later in order to be successful. From a company's point of view, affiliate management is definitely a real alternative to expensive advertising campaigns such as banner campaigns.

Advertising in affiliate management should, in the first place, support transactions and increase sales. The company that understands and integrates both, strategy and technology, as well as communicates successfully with their affiliate partners, will benefit in the long run from the integration of an affiliate marketing solution.

The three most important factors for successful affiliate marketing

For a successful affiliate marketing program the following points should be taken into consideration:

1. Do start with a good concept and long-term marketing strategy

Before the integration of an affiliate marketing solution, it is important to develop an appropriate strategy to advance and define your goals. In addition, the distribution costs for the products advertised have to be clarified.

More specifically it means to answer the questions:

• What kind of goals are you planning to achieve in a specific period with the use of affiliate marketing?
• How do you expect your partner program to support you individually?
• How do you have to support your partner program?
• Is your company competitive in terms of product offerings, marketing strategy and the conversion rate of your online shop?

When the goals have been clearly defined, an affiliate strategy can be developed. It is primarily about the creation of a communication and action plan that includes, among other things, a commission model, suitable advertising and potential affiliates. Therefore the design and implementation of an affiliate marketing strategy considers the most important aspects for successful affiliate management.

2. Affiliate marketing is a people business

An affiliate partner is only useful if it generates revenue or actively contributes to revenue growth with qualified traffic. In order to perform this important task, an affiliate must first of all set up optimal conditions for its activity. The basis is an attractive incentive merit and a transparent and well-structured affiliate program.

In addition to the choice of a suitable network, the active support of the top affiliates is at the forefront. Since affiliates are taking on the marketing risk, they are very selective and usually choose only successful and professionally managed programs.

Merchants should therefore provide optimal support to their affiliates, formulate their expectations clearly and provide appropriate advertising as well as transparency regarding accounting and statistics. The affiliate partners are the capital of any partner program, so they should always be given the appropriate attention and importance according to their role, activities and position.

3. Powerful tracking is essential

High-quality and accurate tracking, that allows a precise assignment of transactions to the intermediary affiliates, requires a technological base that records all sales and leads.

In affiliate marketing the tracking has to be regarded as an essential pre-requisite for subsequent reporting and success control. Reporting on the other hand is based on the data recorded by the tracking, which is the reason why both the tracking and the reporting should as far as possible be automated. Apart from the tracking of the transactions, a major goal of both aspects is the optimization of the results of affiliate campaigns.

Doesn't it sound like a good reason to give it a try?

By Daniela La Marca