Although affiliate marketing has become exceedingly more competitive over the last couple of years, the industry in itself still hasn’t lost its lucrative appeal. The performance based model of affiliate marketing makes this particular channel less risky from a cost perspective for advertisers thus, more merchants are joining. With thousands, if not hundreds of thousands of affiliate programs out there, as an affiliate, how do you choose the best one(s) to join?
Let me outline the major items to look for when selecting a potentially profitable program to join:
1. Product
First and foremost, pick a product that is of interest to you. There is nothing worse (and nothing that makes you give up faster) than a product you’re not interested in. You have to feel at least a little passionate about the subject and the product you’re promoting since you’re going to be spending a lot of time looking at it and talking about it.
Just as important as your own interest level is other people’s interest in the product. Is there demand for it? You can use Google keyword tool to identify which keywords are being searched for as well as the estimated search volume each word gets on a monthly basis. It also shows you the estimated level of competition for that keyword. If the competition is high and the search volume is low, then you may want to pass on that product. However, if the search volume is consistently high and the competition is low, it might be the perfect product to go after.
2. Website
Once you’ve determined the affiliate program has a product you’re interested in, that there is good demand for the product, and that you can compete in the industry, take a good look at the website of the merchant with the affiliate program.
Is it user-friendly and easy to navigate? Does it have clear messages and calls to action? Are the images and the products shown clearly so people know what they are buying?
Also important to note as an affiliate is if the website has any leaks. Leaks are links or paths out of the website that will not generate money for you. This could be links to other non-commissionable websites (rather than the confirmation or checkout page) or even an overly large toll-free number (assuming the affiliate program does not honor pay-per-call through a service like RingRevenue). These are all areas you could lose money and a potential sale because they are leaking good traffic you sent off the site.
Remember, if you’re going to be representing someone’s website, you want to make sure it’s good, reputable and has the potential for strong performance based sales for you.
3. Conversion Rate
There are a few numbers that are extremely important when selecting an affiliate program and conversion rate is at the top of the list. The advertiser you are considering could have a good looking website, a solid brand and offer an extremely high commission; however, if their website doesn’t convert, then you will never make any money promoting it.
Conversion is calculated by the number of people who complete a desired action out of 100. So, if one person out of a 100 completes an order on the website, then that website has a 1 percent conversion rate. For eCommerce sites, this is industry average, but that doesn’t mean it’s good. Keeping in mind the price of the product as well as the commission you’re earning, as an affiliate it’s ideal to have a conversion rate over 3 percent in order to turn a profit. Here’s a sample of what you should be doing to figure this out:
Merchant A has a 1 percent conversion rate. They pay 10 percent commission on sales and have an average order value of $100.
This means if you drive 100 visitors to their site, and you make one sale at 10 percent of $100, you make $10.
Now if Merchant B has a 3 percent conversion rate and has the same average order value and same commission payout, you’ll make $30 for sending the same amount of traffic to their site.
In this case, Merchant B is the better program to join.
4. Commission / Payout
The commission or payout for promoting an advertiser is the number that draw the most attention. Often affiliates will automatically join the affiliate programs that have the higher commission payout and skip over the lower ones. This is not always right.
Go back to the example of conversion rates. If Merchant A has a conversion rate of 1 percent and is now paying out 35 percent commission on an average order value of $100, and Merchant B is paying out 10 percent on a $100 Average Order Value (AOV) product and maintains their 3 percent conversion rate, then you’d actually be earning $35 from Merchant A and $30 from Merchant B, in which case it would be better to join Merchant A’s program.
5. Average Order Value (AOV/AOS)
Now here’s where it gets really interesting (and where you can make the most money). You have Merchant A paying out 10 percent commission with an average 1 percent conversion rate and you have Merchant B paying out 12 percent commission with an average 3 percent conversion rate. Based on these numbers right off the bat, most people will join Merchant B. However Merchant A’s AOV is $380 and Merchant B’s AOV is only $100. A product that pays out 10 percent of $380 makes the affiliate $38 per sale whereas a product that pays out 12 percent on a $100 order only makes $12. With Merchant A converting at 1 percent and Merchant B converting at 3 percent, they payouts would be $38 and $36 consecutively. In this case, Merchant A has the program that will earn you more.
6. EPC
Something important to ask the merchant is what their Earnings Per Click (EPC) is. Some affiliate networks such as ShareASale will report this for you when you’re browsing programs. This shows you on average the earning potential from the program based on the affiliates who are already participating in it (or you can calculate your own personal EPC to figure out if the program is really paying off for you or not). Others like LinkShare do not publicly display this information.
EPC is calculated by dividing the overall commission generated by the number of clicks.
For example, if you receive a commission of $15 after sending 100 clicks (visitors) to the merchant, divide $15 by 100 = 0.15. This means your EPC is $0.15 per click.
This figure tells you exactly how much you’re earning for each visitor you send to a merchant, so it’s also a very important number to note.
7. Cookie Duration
Another important money earning number to consider is the length of the affiliate cookie. This tracks that the customer was referred to the merchant website from yours. If the merchant is offering a 30 day cookie, this means that the customer has 30 days to go back to the merchant website to complete their purchase (if they did not already complete the order on the first visit) in order for you to still get commission for that order. If they return to the merchant website after that cookie has expired, you will not get commission for the sale. So from an affiliate standpoint, the longer the cookie, the better.
8. Tools
Different affiliates like to use different tools, but it’s good when you can find a merchant that offers a good variety of high quality tools and creatives for you to use. These tools can come in the form of banners, text links, widgets, videos, coupons, datafeeds, search boxes, and more. The point is, make sure the merchant offers something of value that you can use to do your job. If you don’t have any good tools to work with, it makes driving targeted traffic from your site to theirs that much harder.
9. Reversal Rates
A program’s reversal rate tells you the percentage of orders that were either canceled, returned or un-commissioned. This is an extremely important number because everything else listed above could be great, but if they have an 80 percent reversal rate, that means that 80 percent of the orders affiliates sent them were not credited for some reason or another.
When you see high reversal rates, beware! Your work will go mostly unpaid and your time and money will likely go down the drain. Just keep in mind a slow conversion rate is normal for most programs, and it’s important to realize that sometimes orders are canceled or returned. It’s part of the buying process that affiliates need to be aware of.
If you happen to have an unexpectedly high reversal rate where there wasn’t one before, it’s a good idea to ask your affiliate manager why the rate is suddenly so high. If they cannot give a good reason or the reason seems fishy, it may be time to switch up their links for a competing site that does honor honest and legitimate affiliate payouts.
10. Competition
It’s a good idea to consider how competitive the industry is for that particular product or service, and it’s equally important to keep an eye on what the competition is doing. Many merchants have multiple competitors with programs trying to recruit top affiliates as well. They may have higher payouts, they may have better conversions. Many of them are listed in different networks or even have their own in-house programs.
It’s smart to see what the competition is doing. Consider the brand creditability and recognition of these other merchants. It’s possible that a merchant with a lower payout and lower average order value does more volume, in which case it might make sense to join their program.
Keep in mind that if a product or brand has a lot of competition, it’s going to be more difficult to get a market share in those sales because more affiliates will be participating in the program and other merchants will all be competing for the same traffic. This means in order to get targeted traffic to your site and your merchant’s so you can earn your commission, your personal marketing strategies need to be better than the other affiliates and merchants in the vertical.
A lot of affiliates have to call on various marketing efforts in order to get the traffic they need to make a living in affiliate marketing. This could include, but is not limited to: SEO, PPC, email marketing, social media (such as Facebook or Twitter), video marketing, podcasts, newsletters, joint ventures, and so on. The best thing to do is find a niche that interests you, then find a niche within that niche and own it in every way you possibly can. Doing your keyword research at the beginning of the process as mentioned before will help you determine if it’s something you’re willing to fight for.
11. Terms of Service
Something a lot of affiliates overlook and click “I agree” just for the sake of not having to read it, are the program terms of service, otherwise known as the program’s terms and conditions. This is very important to read because each program has different terms.
The terms generally outline how you can market your affiliate links, how they can be placed, keywords you can and cannot use, whether you can link to their website using direct search or if you can promote their program via search at all, software you can and cannot use, and so on. If you don’t read the terms of service, then you might find that you won’t get credit for anything you’ve been doing after you’ve already invested a ton of time and money setting up the merchant links and marketing their brand.
12. Support
The final major thing to note when selecting a good affiliate program to join is whether they have a dedicated affiliate manager. Obviously, it’s best to have an experienced affiliate manager running the program, or even an outsourced program manager (OPM); however, it’s better to have even a new affiliate manager available to answer all your questions, than to not have a dedicated person at all.
Things to look for in a good affiliate manager: their ability to be reached by phone, email or chat, their response time in getting back to you, their experience and understanding of how affiliate marketing works, a keen understanding of their program TOS, their ability to guide you in the right direction when you have questions, and their ability to quickly get you the tools you need in order to help you do the job of making you both money.
The best way to test this out is either call or email them and see who responds and how quickly they respond.
As an affiliate, with so many programs to chose from, following this list will quickly help you narrow down your search to only the best, most profit potential programs for your future success.
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