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The Top 6 Pitfalls of Affiliate Marketing for Advertisers




Affiliate marketing can be a very rewarding endeavor for the ambitious online marketer; however, there are several things you should be aware of before you take the plunge. To help you on your journey, I’ve compiled a list of some of the top 6 pitfalls you may face as you deploy your own affiliate marketing advertising campaigns.

While this list is by no means comprehensive of all the challenges you’ll face in your campaigns, it’s a good place to start and might help you avoid some headaches along the way.

1. Double Commissions

When you run your campaign you might decide to promote your offer on multiple affiliate platforms (networks, home grown, etc.), but be warned! Affiliates can register for your offer on multiple platforms and with a little cookie stuffing, earn commissions from both platforms for the same order. Yikes!

Use order number tracking in your conversion code so you can cross reference each of your platforms for duplicate orders.

Check with your platform’s support group for their policy on cancelling double commission orders, but keep in mind you can always kick the offending affiliate off one of your platforms for a temporary fix. There are more complex methods for tracking and cancelling double commissions that are a bit too involved for this post, but just check with your platform’s support for guidance.

2. Cookie Stuffing

Cookie Stuffing refers to the practice of forcing an affiliate cookie into a visitor’s browser even if they have not clicked on an affiliate link. Imagine you have a site with a ton of traffic and you force your Amazon affiliate cookie on every visitor to your site. Now, any time your visitors buy something from Amazon you’ll get a commission. Pretty nifty huh?

Well, as an advertiser this can be a total nightmare. You’re not paying affiliates commissions for sales from people who happened to have visited the affiliate’s website. You’re paying affiliates to promote your website and refer customers.

Keep an eye out for higher than usual conversion rates and visit your affiliate’s website to check to see what cookies are set when you visit. If you see your affiliate cookie and you haven’t clicked on the website’s affiliate link, it’s time to kick this guy out.

3. Branded Search Campaigns

You spent a lot of money on that Super Bowl ad where no one could tell what you do and now tons of people are flocking to Google and searching for your company name. Low and behold there’s a paid ad that says “Your Company Name” linking to your website through an affiliate link. Uh….. what?

That’s right, if you don’t restrict branded terms from your affiliates’ search campaigns, you can end up paying someone a commission for traffic generated for your brand via another advertising medium. Make sure to consider restricting branded search terms in your Affiliate Terms and Conditions. Check periodically for violators and make sure to enforce your policy.

Also, you may consider restricting specific keywords if you’re worried about your affiliates driving up your own PPC costs.

4. Pay Per Lead (PPL)

From time to time, you may want to pay commissions on leads (insurance quotes, free trials, etc.); however, if you don’t monetize those leads until another event happens (purchase) then you need to be extra diligent.

First, make sure you have an excellent handle on your lead to purchase conversion rate for every affiliate. Certain affiliates may fake leads or just naturally have a lower than normal lead to purchase conversion rate. If so, this affiliate is less profitable and may need to have their commissions adjusted. Additionally, if the affiliate offers an incentive to visitors for generating a lead (virtual currency, real currency, etc.) you could have even bigger problems on your hands. Keep an eye on your profitability per affiliate and adjust your PPL rates accordingly.

5. Lazy Affiliate Managers

The key to any good affiliate campaign is relationships, relationships, relationships. Your affiliate managers should be a friend and a resource to your top affiliates. Affiliate managers should frequently visit your affiliates’ websites and make sure they’re running the right banners in the right location with the most visibility.

Use Customer Relationship Management (CRM) software to keep track of your affiliates. Set reminders to check in on performance and to review the affiliate’s website for out of date banners, old pricing and opportunities for improvements. Run activity reports through your CRM to make sure your affiliate managers are staying on top of things.

If an affiliate has to choose between offers, he might just choose the offer from the guy who helps him with his campaign and is a resource he can rely on.

6. Focusing too much on graphic banners

Did you know that many advertisers derive a significant portion of their conversions through text ads, product feeds and coupons? That’s right, there’s more to affiliate marketing than graphic banners. As you design your ad inventory, make sure to include a wide variety of graphic ads, text ads, product feeds and coupons. A little spaghetti marketing (throw it up and see what sticks) might surprise you.

Also, don’t forget to update your ads as your product changes or seasonally if appropriate. There’s nothing like a well timed ad to help drive sales.

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So what about you? What pitfalls have you encountered with your affiliate marketing campaigns?

Be sure to check back on Monday for my follow-up post: The Top 7 Pitfalls of Affiliate Marketing for Publishers.

  • http://www.proaktiftercume.com Derya Yilmaz

    affiliate is new marketing concept

  • http://your-own-free-website.webs.com/ Jason Matthews

    Any thoughts on going with Google Affiliates? Just curious.

    • http://www.marketingclique.com David Vogelpohl

      It depends on your goals (sole network, additional network, types of products, etc) but with a low barrier to entry it’s probably worth an experiment on your part. Good luck!

  • http://www.amnavigator.com/blog/ Geno Prussakov

    David, good article.

    With regards to double commissions (aka “double dipping”) it is something that should be taken care of (on the merchant/advertiser side) even prior to launching an affiliate program on the second platform. Since in the vast majority of cases the “last cookie wins” rule applies, the problem is taken care of by dynamically displaying the relevant tracking pixel on your “Thank you” page (e.g.: if it was as Commission Junction affiliate that last referred the customer — display the CJ pixel, while if the last click has gone through a LinkShare affiliate link — display the LS pixel). Voiding affiliate transactions is an option, but if we’re taking volume, it is not convenient (and neither a good solution to the bigger problem).

    The rest (as really most) of the “pitfalls” are easily solved by a combination of a comprehensive affiliate program agreement and a proactive affiliate management.

    Once again, good article.

    • http://www.marketingclique.com David Vogelpohl

      Hey Geno,

      Thanks for the thumbs-up on the post.

      As you pointed out, serving dynamic tracking pixels is a great solution, but many affiliate networks don’t allow this in their T&C. This is why I advised folks to ask the provider for support as they will often have approved methodologies for dealing with double dipping.

      I guess you could still dynamically serve the tracking pixel and just hope you don’t get caught, but I can’t exactly recommend that :)

      Manual cancellations can be virtually impossible on high volume campaigns. Many networks support CSV imports for high volume transaction cancellations, but as you pointed out, it’s better to stop the double dipping before it occurs.

      > The rest (as really most) of the “pitfalls” are
      > easily solved by a combination of a comprehensive
      > affiliate program agreement and a proactive
      > affiliate management.

      It’s that “proactive affiliate management” part that’s the real trick ;)

      Thanks again for the comments Geno!

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    Thanks

  • http://www.increasebustsizenow.com increase bust size

    Well these days affiliate marketing is becoming more and more competitive as the market is saturated, well this tips come in handy

    Nice post