Affiliate Marketing

By Nicky Iapino

 

Nicky Iapino is Managing Director of affilinet UK, which is part of AdLINK, one of Europe's leading providers of online marketing solutions. affilinet UK is the latest entrant to join this country's fast-growing affiliate marketing sector.

She has been at the forefront in shaping the affiliate marketing business in the UK for the past seven years. Previously Managing Director of Commission Junction and COO of dgm, Nicky is now leading a newly-formed AM Network team offering a strategic service approach for top-end clients.

What do you think are the main challenges for affiliate managers?

The biggest challenge has to be how they approach the management of their Programs. There are still affiliate managers who don't fully understand the power of AM and the role it can play as their 'virtual sales force'. 

Sadly, this lack of understanding has major ramifications on how they structure their activity, how they grow their Program as well as how they communicate with their publisher base, and these are the challenges which if overcome could lead to more efficiency, greater impact on sales and increased brand delivery.

How should networks support affiliate managers?

Networks must empower their affiliate managers. Far too many withhold information and discourage direct contact between Publishers and Advertisers This is purely a way of retaining an element of power over the relationships they manage and is of no benefit to either party. A good Network should educate and knowledge share with their Advertisers.

And how should affiliate managers support affiliates?

The best way to get a job done is to be fully prepared and armed with the right tools! Affiliate Managers can support affiliates by making sure they have relevant and current creatives and product feeds. They should also make terms of the Program clear and concise, and try to avoid moving the goalposts.

Do you believe in allowing affiliates and merchants to have direct relationships, or should this be brokered by the network?

I firmly believe that direct relationships should be encouraged and is beneficial in delivering successful AM programs. Networks should add value, not stand in the way of interaction between their two client bases. Transparency in this particular form of business relationship is key here and it also allows Networks to take a sometimes needed impartial position.

What about paid-search and the use of brand names by affiliates? Is that good practice, in your opinion, or something merchants should be avoiding?

Yes, I think this is good practice but it ultimately depends on how it is managed. It certainly shouldn't be avoided, but at the same time it shouldn't just be a 'free for all' without some thought. It is important that Advertisers plan their PPC strategy for their Publishers and communicate it clearly. If not, they need to seek advice from their Network to ensure the two activities don't clash or compete. A decent Network would know how to maximize both strands most effectively.

Cookies. It reminds me of the impending global oil crisis. Discuss.

Cookies are still a very effective way to track sales. Customers do have the power to switch their cookies off, but I still believe this is a very small percentage. Many Advertisers are requesting that customers activate their cookies before transacting on their site and I am sure that an alternative to cookie-based tracking will be more broadly used in the future.

What's the point of linking to Amazon, which only offers a 24-hour cookie, when the average buying cycle can take up to 12 weeks? Where's the reward for the affiliate?

Amazon has the largest AM Program in the world. They have spent a lot of time developing it and even more on building their brand. Their 24hr cookie is not ideal, but they can get away with it and it is worth remembering that the majority of their transactions are for items which essentially fall under the emotive category and therefore drive a more immediate buying decision.

 

In terms of reward however, Publishers shouldn't under-estimate the value of leveraging off this huge brand name. And that's not just from the sheer size of conversion rate it delivers, but also from the amazing amount of traffic it can generate even before a consumer has clicked through.

Affiliates are reliant on merchants to convert traffic into customers before they are paid. But many merchants won't even provide a relevant landing page, much less something bespoke for affiliates. Is this performance-based model going to last, if merchants aren't performing?

Of course this isn't going to last if Advertisers aren't performing, it's a performance-based model! However, I really do think this is a thing of the past. Advertisers must deliver the right tools to ensure a successful AM Program. If they don't, they must be prepared to adopt changes to make a Program work. It's equally a good Network's job to educate them if not. 

But let's be clear here, this is becoming a more competitive market place, so Advertisers who continue to make these basic errors will not succeed

Affiliates can provide brand awareness and strategic link-building, but are not compensated on anything other than referrals. Is there a demand for hybrid programs (CPA / CPC / CPM) among affiliates?

Yes, there is a demand for hybrid programs amongst Publishers and it's very much happening out there. Publishers are working much harder on building up their loyal communities, delivering useful data and understanding their customers.

Which sectors have been the most successful at affiliate marketing? Which ones have been slow to adopt it for customer acquisition?

Mobile phone, financial services and travel sectors have been the most successful to date and I feel this is a reflection of the internet overall. 

FMCG and car manufacturers are at the opposite end of this transaction scale with customers wanting to touch and experience their choice before final purchase, so these sectors have been slower in utilising AM in their marketing plans. They are however slowly starting to understand that they can still use AM to have their customers engage with their site and most importantly, their brand.

However, I do also think that the B2B sector, for example stationery and conference services, have equally been slow in realising the potential of AM and it surprises me when you think of the huge opportunity they could tap into here.

The bad noise about spyware has become quieter in recent months. Has the industry overcome this abuse of ethics, or are some networks still allowing malware to be distributed by unwitting affiliates?

Unfortunately, this practice is still happening too frequently for my liking. It is widely known that this is still going on and I personally think this is wrong. Affiliates have tried to get the industry to set a standard but there are Networks who want to set their own policies which is preventing a proper policing system to be put into effect.

What do you think will be the main trends in affiliate marketing in 2006?

Affiliate Marketing is becoming an integral part of more and more business' marketing strategies. We have already seen the sector double in size over the past 12 months, rising from £600m in '04 to between £1.1 - 1.35bn in value of sales alone by the end of last year. However, to keep this growth on track, the industry must embrace efficiency.

This is not just about how it can deliver the optimum service or offering, but more importantly, its ability to work alongside other key parties in the whole advertising / marketing arena. Clients are increasingly turning to their media agencies to run their AM activity and if we are going to be able to harness this interest, everyone needs to understand each other's roles and responsibilities.

I also think Pay per Call is equally going to come to the forefront over the next 12 months, as well as the increased use of Blogs and RSS Feeds. This is exciting new technology for this sector and with more and more affiliates growing their own interest and understanding of the technology available, we as an industry must continue to evolve and outshine other online marketing options to stay ahead of the game.