Earn Money with Affiliate Programs and Business Opportunities Online: 3 Dangers of Affiliate Marketing and How to Avoid Them

Wednesday, June 21, 2017

3 Dangers of Affiliate Marketing and How to Avoid Them

3 Dangers of Affiliate Marketing and How to Avoid Them

The affiliate industry is nuanced. There are many players, layers and moving parts. While some of these nuances are what make the affiliate model unique and valuable, such as connecting compensation to outcomes, there are others that are less desirable. What’s more is that if a company is unaware of them, they risk damaging their brand.

For companies to take full advantage of the opportunity and return on investment that an affiliate program is capable of producing, they need to understand and recognize certain aspects and nuances of the industry. Here are three examples of these and what to watch out for:
1. Affiliates Who Don’t Create Value
Affiliates are marketing partners. They include content bloggers, review sites, schools and organizations, to name a few, and can be incredibly effective at promoting a brand’s products and services. The vast majority are highly reputable and consistently drive legitimate incremental sales for brands. However, there are also those who do not.
In affiliate marketing, the concept of “incrementality” generally refers to sales that an advertiser wouldn’t have obtained without an affiliate’s contribution. In other words, the affiliate is driving a new customer to a company.

Where it gets nuanced is when a company assumes that all the affiliates in their program are driving new customer sales when, in reality, there are those that are primarily benefiting from the efforts of other affiliates or channels.
For example, some affiliates (we’ll call them “last-in affiliates”) design their business models to try and capture customers who are already in the buying process or in the shopping cart. By doing this, they may also negatively impact affiliates that are driving top-of-funnel value for the brand and new customers via their blog, social media channel, review site, etc.

By intercepting a customer while her intent to purchase is already high or right before the point of sale, these last-in affiliates often get credit for transactions they had done little to initiate or offered no incremental value to. Consequently, companies end up paying these last-in affiliates substantial commissions.

To prevent this type of low to no value activity in your program, it’s important to not accept results at face value. Dig into your affiliates’ tactics to truly understand how they’re promoting your brand and consider structuring your external attribution model so that it doesn’t reward this behavior.

<&/P> 2. Unethical Affiliates
While most affiliates are ethical partners which drive significant value to companies, bad apples do exist, unfortunately. These unscrupulous marketers shouldn’t be confused with affiliates which may not add incremental value. No, these types of affiliates are more nefarious. They purposefully engage in deceptive marketing activities to collect commissions.
For example, in a recent Huffington Post article, Dr. Mehmet Oz shared his personal story of how some ethically questionable affiliates and online marketers use his likenesses to sell and promote acai berry and other products — all without his permission. It’s gotten so bad that it’s put Dr. Oz’s brand and integrity at risk. To call attention to this pervasive issue, Dr. Oz has dedicated multiple episodes of his television show to the topic, even hiring private investigators to find out who these shady marketing individuals are and educate the public on how they’re being purposefully duped.
Some companies are aware of these bad apples but turn a blind eye because their marketing tactics generate revenue. Other companies have no idea that these types of affiliates are in their programs or promoting their brands in illegal or unethical ways. Regardless, neither scenario reflects well upon a company or demonstrates a successful program.

Similar to how you can avoid compensating affiliates that don’t offer any value, preventing unethical affiliates from getting into your program requires that you screen each of your partners carefully, have transparent insight into what they’re doing to promote and represent your brand, and monitor their activities once they’re accepted into your program.
3. Misaligned Incentives

For most of the affiliate industry’s history, networks have represented both affiliates and merchants in a single transaction and charge “performance fees” to do so. While this structure isn’t nefarious or illegal, it leaves no room for proper checks and balances, so incentives are perpetually misaligned. These misaligned incentives have led to serious issues including fraud, trademark bidding and cookie stuffing.
Today, even though the industry has evolved and matured, some of those misaligned incentives still exist because they benefit many of the players in the value chain; shutting down these behaviors can mean less profitability. Fortunately, there are companies that are becoming more discerning about who they partner with. They’re also starting to rebuff partners who don’t have their back, who aren’t representing their brand with integrity and who accept kickbacks. This is a welcome stance and one that will help the affiliate model reach a place where everyone has an opportunity to excel and work together productively.
Nuances exist in every industry. Some lead to a competitive advantage, while others can be a blow to one’s brand. By choosing your partners carefully, demanding transparency from them, and ensuring that there’s a clear connection between the results you’re getting and the amount of money you’re paying, you’ll be able to reap the rewards that a nuanced affiliate program offers.

Robert Glazer is the founder and managing director of Acceleration Partners, an affiliate and digital marketing agency.

How To Start An Affiliate Marketing Program For Your Business: The Complete Guide

  • Accurate affiliate tracking
  • Unlimited affiliates
  • Individual affiliate reports
  • Easy affiliate registrations
  • Coupon codes
  • Affiliate dashboard
  • Real time reporting
  • Custom referral rates e.g using percentage or flat rates

  • How to Start An Affiliate Marketing Program For Your Business
    How to Start An Affiliate Marketing Program For Your Business | Image Source: stayathomemum.com.au
    Affiliate marketing as severally written about on the blog, is one of the best ways bloggers can earn money online. But while it’s a great source of income, it is run by companies whose goals are to rapidly increase their sales and customer acquisition rates.
    Running an affiliate marketing program can come with a lot of headaches, challenges, and frustrations on the part of the business starting the program. But when the basics are understood and the right steps for execution are carefully followed, starting and running a successful affiliate marketing program bloggers would gladly jump on, would come a whole lot easier
    See Also: The 2 Best Affiliate Programs That Can Make You Up To $100 Monthly, Even Without A Blog!
    First, What Is An Affiliate Marketing Program?
    To understand what an affiliate marketing program is, you first have to understand what affiliate marketing is:
    − Business Consulting −
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    Affiliate marketing is a performance based type of marketing where a business rewards its affiliate marketers in cash and kind, for successful referrals they bring to their businesses through their affiliate marketing program.
    As explained in the definition, the referral links that affiliate marketers share on their blogs and social media accounts to get people to click and either successfully sign up, perform a certain action, or purchase a product or service is gotten from the affiliate marketing program.
    So an affiliate marketing program in simple terms, is a marketing scheme where a business sells its products using multiple individuals or businesses who get rewarded with a certain commission upon every successful action recorded.
    Why Start An Affiliate Marketing Program?
    Running an affiliate marketing program is one of the fastest ways to quickly grow a business, especially for a new product that people don’t really trust or know yet about.
    Affiliate marketing programs are mostly run by internet companies, since it’s a lot relatively easier to motivate so many people to click, read a convincing sales copy, and immediately make a purchase with a call-to-action at the bottom, than and to convince a person to buy over the television.
    Since hundreds or maybe thousands of bloggers who join your affiliate marketing program would tend to write deeply and passionately about your products or services, the links of your products they put on their websites will not just create widespread awareness, popularity, and trust for the items, but could greatly improve your website’s SEO rankings.

    By running an affiliate marketing program, you’ll have a platoon of marketers who’re aggressively promoting your products and only getting paid whenever they successfully sell any product.
    See Also: 7 Affiliate Marketing Mistakes Thousands Of Bloggers Make Monthly
    Types Of Commission Structures
    Depending on the type of business you run, there are four major types of commission structures for an affiliate program. These structures are:
    1). Cost Per Sale (CPS):
    In this commission structure, you will pay a percentage or fixed price to the affiliate marketer for every sale that happens on your website.
    2). Cost Per Click (CPC): 
    In this commission structure, you will pay for each successful click to your website.

    3). Cost Per Lead (CPL): 
    In this commission structure, you will pay for each successful inquiry that happens via a web form.
    4). Cost Per Action (CPA): 
    In this commission structure, you will pay for each successful action like a mobile app download, email signup, and a whole lot more.
    As stated above, the commission structure your business will run its affiliate program on is largely dependent on what type of business you’re running. While there are no entirely right or wrong commission structures to follow, they have their advantages and disadvantages, and as such, show that it is important you test and examine which will work best for your business on the long run.
    How to Create An Affiliate Marketing Program with WordPress
    While creating your affiliate marketing program, you’ll have to decide if you want to either run it in-house or outsource it. By running it in-house, you’ll use plugins you can install on your WordPress site to track leads, while outsourcing would require you use the popular and very advanced affiliate marketing platforms that are widely available.
    Step 1: Create A Product Or Service People Want To Buy

    No matter how hard an army of affiliate marketers try to promote a product no one wants to buy, the sales volume will remain pitiful.
    The first thing to do when starting an affiliate marketing program is to create a product people actually want to buy. It could be a re-make of another successful product, which could now be priced cheaper and carry a lot more value than its copy.
    By starting an affiliate marketing program with a product or service that already has a large market, you can be more certain of running a successful program in a period of one to two years.
    Remember: Avoid promoting bad products because it can cost you your company’s reputation, make you lose a lot of money on wasted promotions, and cause a heavy flow of refunds requested by your customers who would have by now, totally lost any form of trust they may have had for your business.
    Step 2: Choose The Best Affiliate Marketing Program Platform Or Plugin For You
    The next step is to either choose an affiliate plugin that will be installed in your WordPress site or one that’s housed on an external platform.
    Choosing a platform or a plugin both have their advantages and disadvantages, but the decision ultimately lies in your hands.

    If you pick a platform, it makes you more transparent and ensures that the data is almost never lost and is very accurate. Whereas if you choose to go with a plugin, a site crash could make you lose all the data overnight, especially if you have no backups.
    While going the platform route comes at a substantial cost, it is usually the best and most popular method.
    Step 3: Get A Lot Of Affiliates To Start Promoting Your Products Or Services
    Now that you’ve setup your affiliate marketing programs and have a product or service people want to buy, you can go on a promotion spree to attract thousands of affiliate marketers.
    If you don’t have a large budget to promote your affiliate marketing program, you could choose instead, to setup your affiliate marketing program on a platform rather than hosting it in-house, as these platforms usually have thousands of affiliate marketers registered on their websites, that are always in search of new products that have a fast selling rate, coupled with a great commission on it.
    Step 4: Closely Monitor And Manage Your Affiliate Marketing Program
    After setting up and having recruited a minimum critical mass of affiliate marketers, you have to closely monitor your affiliate marketing program to ensure everything runs smoothly.
    A very important reason you must closely follow up is in respect to fraudulent activities. People would naturally want to game the system so they can make a whole lot more money, and as such, you have to be on the lookout to immediately delete those set of individuals.

    See Also: 20+ High Paying Affiliate Programs That Will Make You Money From Nigeria or Africa
    Affiliate Marketing Platforms
    Some great affiliate platforms to start your affiliate marketing program on are:
    1). Commission Junction:
    This is one of the most popular affiliate marketing platforms in the world. Many large companies like Hostgator, Ipages, and a whole lot more run their affiliate marketing programs through it.
    Just as there are thousands of affiliate marketing programs running on the affiliate maketing platform, there are also thousands of affiliate marketers promoting products listed on the platform.
    Businesses from almost every part of the world can register and create their affiliate marketing program on this platform.

    2). GrowSumo:
    This is another affiliate marketing platform, although far smaller than Commission Junction and several other affiliate marketing platforms.
    Just like Commission Junction, people from almost every part of the world can register and create their affiliate marketing programs on GrowSumo.
    3). MaxBounty:
    This is another great affiliate marketing platform, and people from almost every part of the world can register and create their affiliate marketing programs on their platform.
    4). ShareASale:
    This is just as popular as Commission Junction, but was saved for last because people from many parts of the world can’t easily sign up on the platform. They fiercely filter their potential affiliates and as such, millions of people, especially from certain parts of Africa have difficulties getting approved on the platform.
    Note: These affiliate platforms listed above usually charge a large first time sign up fee which could be as high as $600, then a monthly premium for their continued use.
    Affiliate Plugins For WordPress
    Some affiliate plugins you could install on your WordPress site instead of registering on an affiliate platform include:
    1). AffiliateWP:
    AffiliateWP is one of the best affiliate plugins on the internet. It offers a wide range of features affiliate platforms offer, and has a one-time fee for installation on your website.
    Some of the amazing benefits you get with this includes:
    2). WordPress Affiliate Manager:
    This is another great affiliate plugin, but has fewer features that AffiliateWP and other affiliate platforms. It can go for a one time fee of just $39 for your website.
    See Also: How To Start A Profitable Affiliate Marketing Site That Makes At Least $500 A Month
    To Sum It Up
    Starting an affiliate marketing program can sure be a great way to aggressively grow your product and service revenues, but not going about it the right way can lead to a lot of complications and a terrible loss of both money and customers.
    If you want to start an affiliate marketing program but don’t know how to, you can either follow this guide or hire a professional to help you every single step of the way.

    What are your thoughts on this article about how to start an affiliate marketing program for your business in Nigeria, Ghana, Kenya, South Africa, Africa, or anywhere else around the world? Let me know by leaving a comment below. Make Your First $1000 Blogging! You have successfully registered for this course. Go over to your email to get the first lesson for today!

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