Affiliate marketing: 34 lessons learned
Eleven years is a long time to do anything.
And yet it went by so fast. We grew our affiliate program from somewhere around $7 million dollars to more than $65 million in my last year.
Partners came and went. Some team members came and went. Technology, platforms, and tactics shifted.
But through all the changes, certain principles and facts never changed. Here are 34 ingredients that stood the test of time and fueled our growth.
1. Not all affiliate marketing traffic is equally valuable.
Some affiliates even create negative value. But you have to decide what constitutes negative value.
If an affiliate is intercepting your inbound search traffic and re-routing it through their affiliate link (as some “toolbars” did back in the day …) then that’s an obvious example of negative value (or, to use a more common term--stealing).
Some people feel coupon sites drive negative value because they are lower margin on a sale you would get anyway.
This isn’t a theory I subscribe to. Coupon sites *can* drive incremental traffic, especially on impulse purchases, or in geo-coupon situations, for example. Coupons can also improve conversion.
The point is, be clear about the traffic and behaviors you want to reward, and compensation accordingly.
2. If revenue from a particular affiliate partner seems too good to be true, it probably is.
If revenue from an affiliate suddenly jumps through the roof: investigate before you celebrate.
If you’re managing your program well, you can pick up the phone, call the partner, and learn what new tactics they implemented to spike sales. The activity should be fairly easy to verify if all is legit.
3. A middleman between you and your affiliate marketing partners invites:
🛑Confusion
🛑Misalignment
🛑Miscommunication ...
🛑and even deceit.
Get to know your partners. Council them. Build trust and rapport over time just as you would if you were running a traditional sales team.
Because in a way, you are. Affiliates are an outsourced sales and marketing team, but can function in much the same manner as in-house employees. They need clarity, structure, strategy, and oversight.
4. Relying on affiliate marketing as your primary revenue source is risky for advertisers and affiliates alike.
(Publishers: See Amazon’s recent commission cuts. ✂️)
Relying on the affiliate channel as your main source of revenue is risky, because relying on any one thing for success--or for putting food on the table--is risky.
Affiliates run the risk of publishers changing commission structures, purging partners, and even terminating programs altogether.
Publishers too reliant on affiliate sales leave themselves exposed to Google algorithm changes, affiliates leaving your program or shutting down, competitors offering stronger compensation structures, and other fluctuations outside your immediate control.
5. Affiliate marketing is an 🔥 awesome 🔥 supplemental revenue strategy.
As a supplemental revenue stream (for affilaites) or one of many marketing channels for advertisers, affiliate marketing is awesome. It can drive revenue on its own, enhance your brand through and provide lift for all your other marketing programs.
6. Affiliate marketing channels and tactics change, but the fundamentals do not.
Offering value to a market you understand was effective on stone tablets, is effective on web sites, will be effective in virtual reality, and will work for whatever else comes later.
7. Single-channel marketing attribution is a lie.
Usually, anyway.
An ad agency owner once told me: The tactics in your marketing program should come together like fingers forming a fist, consolidating and amplifying the power of each into a stronger whole.
He was pitching me to get all my employer’s business. But he wasn’t wrong.
Everything you do in marketing, if done well, lifts everything else.
That’s why attribution is so difficult: customers often come in contact with several (or more!) marketing touchpoints along the way.
A customer might see an online display ad for your product. Later, in a search, they may click a Google PPC ad, but not buy.
A month later, they might actually purchase following a recommendation from an affiliate partner.
What channel gets credit?
All of them, to some degree.
Some marketers assign greater value to those touchpoints the customer came in contact with early in the buying process, or “higher in the funnel.”
But all had value. And none worked alone.
8. Marketing data can often triangulate truth. It rarely crystalizes it.
We are awash in marketing data these days, and really as clueless as ever.
Our deep desire to have concrete numbers to rely on, to make decisions on, often can point us in a vaguely correct direction. But rarely does data tell the whole story.
We would like to think we are measuring a single variable, or a small handful, but the world is much messier than that.
Often, the best we can do is triangulate a trend using several different sources. If all lead in a similar direction, then generally we can follow.
But beware hanging your hat on a single report or data source. There is always more to the story.
9. Successful affiliate marketing advertisers are marketing advisors for their partners.
If you run an affiliate program, you should also run a marketing consultancy.
Your success depends on the success of your partners, and you should arm with them your best expertise, tactics, content, and tools.
Good consultants are great troubleshooters. They work with clients to attack problems, identify root causes, and agree on a course of action for correction.
Do the same with your affiliate partners.
10. An effective affiliate marketing strategy can shove competitors off of page one on Google.
Every company wants to be first in search results for its favored keywords, branded and unbranded.
Your affiliates would like to be there, too.
Some companies view high affiliate search results negatively, as though affiliates are “stealing” margin from the advertiser by capitalizing on search results the advertiser itself is trying to capture.
But affiliate search results, while possibly resulting in lower true incremental sales, provide a defensive measure.
If your affiliate partners join you on page one of Google, pitching your offer, guess who isn’t there?
Your competitors.
What is the value of owning each incremental result on page one of the search term you want to rank for? It’s certainly worth an affiliate commission to capture a sale that might otherwise be lost to a competitor.
Affiliate search results build a competitive moat, creating distance and barrier between your potential customers and your competitors.
11. Affiliate commissions are an easy target for cost cutters.
Clearly and consistently demonstrating affiliate program value to management and your peers is much more effective than defending commission expenses later on.
12. When it comes to affiliate marketing partners, “Trust, but verify.”:
As a president once said.
Triangulate data, quantitatively and qualitatively.
Revenue changes should roughly correlate to web site traffic or another metric indicating buyer activity.
And qualitative?
Know what your affiliates are up to. If an affiliate is making a big new push around your promotion, or introducing you to a new audience, be aware of it. Major marketing initiatives on the part of your affiliates should roughly correlate to revenue changes.
13. Don’t boilerplate your affiliate marketing program terms of service.
Protect your:
✅ Unique brand
✅ Paid search programs (especially branded)
✅ SEO strategy
🚫 And prohibit any other behaviors you find unprofitable or unsavory.
Your terms of service (TOS) should reflect and protect your company’s key strategies and brand.
Affiliate programs are unique, just like the companies and products they represent. Your TOS should outline your:
✅ Expectations for affiliates
✅ The support services you provide
✅ Commission structure
Your TOS should also give you cover and recourse when affiliates are unable—or unwilling—to promote your company in the way you want it promoted.
14. Your affiliate marketing program terms of service is a living document.
Your program will change as it grows and matures. Company strategy and key initiatives will change. The way you want to go to market--and not go to market--will change.
All of these changes should be reflected in your TOS, protecting both you and your affiliates.
Revisit your TOS at least annually, and make sure you have alignment with corporate goals and strategies.
Then, share the TOS with your affiliates annually, encouraging them to review it and reach out with questions. It’s another way to facilitate dialogue and rapport with your partners.
15. Affiliate marketing revenue is not 100% incremental.
Just like every other marketing channel you use.
Affiliate marketing is boosted and promoted by your other marketing efforts.
The customer journey isn’t a straight line from a single marketing touchpoint to purchase, but a meandering, in-and-out experience with multiple marketing touchpoints, including the affiliate channel.
16. A healthy affiliate marketing channel brings in about 20% of total revenue.
If your percentage is much higher, you are an affiliate marketing superstar.
Or fraud, tracking issues, or other imbalances are likely taking place.
Proceed accordingly.
17. The primary value of coupon sites lies in helping close sales, not driving incremental revenue.
This doesn’t necessarily apply to impulse-purchase items, when sites like Slickdeals can indeed generate incremental, quick-trigger buying behaviors.
But overall, coupon sites are closing tools, which also have value. But to most marketers, not as much value as marketing activities that take place higher up the funnel, during the customer’s discovery and decision processes.
18. The best affiliate marketing programs are relationship-driven
They are not technology, platform, or promotion-driven.
This comes down to what I’ve been saying throughout this article: know your affiliates. Consult with your affiliates. Understand their goals and objectives and make sure they understand yours.
19. Digital is not the only effective selling channel for driving affiliate marketing revenue.
Affiliates still use offline channels. Direct mail is still a thing, as are phone referrals, outdoor, and direct, person-to-person selling.
If an affiliate can bring sufficient volume to be worth the effort, be flexible and find ways to track non-digital channels.
20. Try to balance your affiliate marketing partner portfolio.
If you get to the Pareto Principle—20% of affiliates driving 80% of revenue—consider yourself balanced.
That said, chase the impossible dream for greater balance:
✅ Regularly recruit promising new partners
✅Assist struggling partners
✅ Eventually, exit non-performers.
21. The total number of affiliate marketing partners is not an indicator of program health or effectiveness.
It’s fine to have targets for total affiliates, but ultimately program success is measured by revenue growth.
22. Have a degree of patience with underperforming partners. But exit non-performers over time.
As part of your affiliate program operating rhythm, churn out non-performers.
Pruning is important. ✂️ 🍇
Create space for new growth and new energy by freeing non-performers to focus on other companies. And free your focus and energy to create new growth.
You might think non-performers aren’t really a drag on your program, but they are. You’ll still reporting on them, measuring their performance, and using mental energy most productively spent elsewhere.
23. Place some bets on small affiliate marketing partners you think have the potential to grow big.
Supporting the little guy early can pay off later. Be early with an influencer or publisher you think has the ability to make it big, and grow with them.
24. There are many ways to design commissions and offers to drive optimal affiliate and customer behaviors.
Be creative and flexible with your commission structure. Reward the behaviors you want to reward, whether that’s higher payments for your most profitable products, repeat purchases, or driving buyer behavior at key times of the year.
But also: keep things simple and easy to understand. A confusing commission structure can drive away good partners.
25. Think of your affiliate program commissions and customer offers as part of the same entity.
Commissions and customer price promotions both reduce profitability, and should be mixed, matched, and measured together to find the optimal mix of volume and margin.
26. Having a strong brand and/or a unique product or service can lower your affiliate marketing commission costs.
Smart affiliates want to align with compelling brands. They know that partnering with companies their audiences trust is good for their own brands and loyalty.
That’s worthwhile and valuable—and can help lower the commissions you ultimately have to pay.
27. Trends, not snapshots at a given moment, provide the clearest picture as to both the health of your affiliate program and the performance of individual affiliates.
Yes, know where you stand at any given time. But just as importantly, understand the current snapshot in the context of prior performance and future expectations.
Use current data to inform your overall program direction and health.
28. Find some affiliate marketing partners that challenge your entire business to improve its products, its services, and to refine its message.
Some affiliates have outsized clout. They may be far larger and have greater brand strength than you do.
They demand nothing but the best in content, products, and services for their own audience.
These affiliates can send a ripple effect through your entire business, improving it. Find these affiliates. They exist.
29. Effective affiliate marketing program leaders give affiliates their:
⏰ Time (relationship building)
🧐Talents (marketing and content expertise)
🔧 Tools (content, guidelines, and best practices)
Spend time with your affiliates. Consult with them and guide them to success to ensure your own.
Equip them with content, strategies, and best practices from other partners to help drive their growth and lead them where you want them to go.
30. Affiliate marketing can be a force multiplier for your business.
But if your product is a zero, applying a multiplier still equates to zero.
31. Great marketing copy and great content drives affiliate sales.
If your affiliates don’t have great writing and content creation capability, provide it for them. ✍️
32. The best affiliates have strong brands and loyal followings of their own.
They provide their own unique value and understand their customers.
As a result, recommendations for third-party products and services are highly trusted—and convert higher than fly-by-night, spam-and-scram operations.
33. The most effective affiliate partner recruiting is highly targeted and personal.
Personal and thoughtful selection and outreach pays the highest dividends, short and long term, relational and financial.
34. Well-run affiliate programs build your brand by aligning with affiliates customers know and trust.
The best affiliate partnerships have a sybiotic brand relationship: the affiliate trades on your brand equity by aligning with you, and you trade on theirs with a recommendation made to a trusting audience.
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