7 Steps To Start an Affiliate Program
Affiliate marketing is an Internet-based sales channel, where so-called publishers (also known as “affiliates” or “publishers”) convey visitors to an advertiser, and only receive payment when the visitors perform an agreed action on the advertiser’s website, as a purchase. This scheme is called an affiliate program, and can in principle be used by any company that has a website where users can perform any type of transaction.
To prepare and get started with an affiliate program, we cover seven main steps.
Choose affiliate networks
Most affiliate programs run through an affiliate network that handles technical and administrative matters, such as tracking, support, and payment flow. The choice of affiliate network is usually directly involved in deciding how successful the business will be in affiliate marketing. It is therefore important to choose a network that suits your needs and ways of doing business.
Determine the commission rate
Affiliate marketing is performance-based, which means that you as an advertiser pay commissions to publishers when they convey buyers to you. The commission can be a fixed amount per brokered transaction or a percentage of brokered order value. If a publicist mediates a purchase with an order value of NOK 1,000 excluding VAT and shipping, it can, for example, amount to 10% of the order value, or a fixed amount such as NOK 100 per order.
For it to be interesting for publishers to convey visitors to you, it is important that the commission level is high enough for publishers to receive a sufficient return on the traffic they send to your site.
Calculate what commission you can pay out. Because the costs are known in advance, it can in principle be considered a cost of goods. Comparison of cost of goods through other channels, both physical and online.
Check the commission level offered by competing affiliate programs. Your commission level should be somewhere between A and B. The affiliate network you have chosen can help you with advice on the correct commission level.
Determine advertising rules
Different types of publishers use different methods in their marketing. Most advertisers like to find informative websites with good content relevant to their website, but not all methods may suit your business. It is therefore important to specify the types of marketing that are allowed for your affiliate program. Some important techniques to consider are:
Discount codes are widely used in affiliate marketing to increase the conversion rate. There are many specialized websites that collect information from a large number of advertisers in one place, and publish all the offers together for their users. Specify whether you allow publishers to advertise using discount codes. If so, provide publishers with relevant discount codes to promote.
Cashback means that a publisher offers their visitors compensation for visiting an advertiser and completing a transaction. Through the affiliate program, the publisher receives a commission through which she in turn shares with her users. Cashback should not be allowed if the customer does not need to provide any form of payment on your site, for example if it is only an application form.
PPC (pay per click)
PPC means that publishers buy traffic, for example in search engines, and drive traffic to your site. It is often very cost effective to let publishers handle this type of advertising, but if you already run your own purchased advertising in the search engines, you should consider how publishers can influence this.
Social media means that publishers present your products or services to their followers on Facebook, Twitter, Instagram and other channels. It can also mean purchased advertising in various forms on these platforms. You should indicate if this type of advertising is allowed in the affiliate program.
Some publishers have their own databases of email addresses for people who have given consent to receive offers and advertising via email. The databases are usually segmented based on geography or interest. This type of marketing can yield good results in a short time. If you want to work with this type of publisher should consider giving publishers ready-made texts to have control over how your products or services are promoted.
Price comparison sites compare different advertiser offers with a focus on price. The purpose of the sites is to help the end customer find the best deal and the best price. If you want to work with this type of publisher, you should set up a so-called product file (see below) to ensure that the publisher displays the correct information.
Create graphic advertising material and a product file
The majority of the mediated purchases in an affiliate program are made through text links, but it is still necessary to provide a certain selection of image-based ads known as banners, for publishers who prefer this. A common recommendation is to produce about ten ads in the most common formats. The affiliate network can help you with advice on which colors to choose. If you are unable to produce the ads yourself, the network may recommend banner providers.
For retail advertisers, it is important to offer a product file, which is a text file that contains product information from the online store. The product file is used by publishers to find information and links to your products. It gives them access to product information and prices they can filter and display in many different ways. Product files are used, among other things, for price comparison, product catalogs and others. Many e-commerce platforms have built-in features for exporting product files. Affiliate networks import product files on a regular basis and use their system to make data available to publishers.
Because affiliate marketing is performance-based, it is necessary to track sales that publishers mediate to your website. This is handled by the affiliate network and works using a tracking code from the affiliate network which is located on the receipt page of the online store. The code is usually only one or a few lines long, and is executed each time a purchase is completed and the receipt page is displayed.
When a person clicks on an ad or link from the affiliate program, the affiliate network places a cookie in their browser. When the same person makes a purchase in the online store, and the tracking code on the receipt page is run, the affiliate network can check if the person has previously clicked on an ad or link from the affiliate program. The affiliate network pays the commissions to the publishers and sends you a single invoice at the end of each month.
Set up a recruitment page
An important way to recruit affiliates in the affiliate program is through your own website. By placing a separate page on your site with the theme “make money with us”, you can reach the visitors who already like your products and are willing to recommend them to others. On this page, you refer directly to the affiliate network to avoid unnecessarily burdening you with inquiries. Many affiliate networks can create these sign-up pages with logos and content specifically tailored for individual advertisers, making it easier for visitors to identify with the affiliate network’s site.
Launch and inform
Affiliate marketing is a long term form of marketing. It often takes between one and six months for an affiliate program to reach a normal volume. The long time it takes to start is due to the fact that it takes time for publishers to program and implement links and ads on their websites, and find the best form of collaboration for the individual advertiser. Affiliate networks have a number of tools available to alert publishers to your affiliate program:
- Information in the publishers’ login to the affiliate network
- Posts on the affiliate network’s Facebook / blog
- Email to publishers operating in the same niche as a given affiliate program
- Newsletter to all publishers in the network
- Manual recruitment of key publishers
To learn more about how your business can use affiliate marketing, you can read more Tips on Becoming a Successful Affiliate Marketer
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