Affiliate Marketing Industry Ripe for Quality Effort – By Will Martin-Gill

by FeedFront Staff on August 26, 2009

During the past two decades, affiliate marketing has quietly grown into a multibillion dollar industry, with projected 13 percent year-over-year increases through 2012 ; making it one of online advertising’s fastest growing segments.

As the industry matures and the stakes get higher, issues of quality weigh heavily on affiliates and merchants alike. What kinds of traffic are affiliates sending to their advertisers? Are top affiliates compensated fairly? What happens when honest affiliates must compete with those who cheat the system? The affiliate community should be asking these questions and exploring quality measures that can elevate the industry, lifting reputations and profits with them.

Consider the quality implications of modern pay structures. Generally, the more sales and leads an affiliate sends, the more likely the merchant will put them in special bonus tiers and pay more. In this scenario, smaller affiliates who may send more valuable traffic are undercompensated, while those who send large volumes of lower-quality traffic – some who also commit fraud – are unduly rewarded.

When eBay brought its affiliate program in-house last year and analyzed performance data, the company re-examined those traditional notions of affiliate marketing. Traffic quality demanded attention.

For example, the data suggested that many small affiliates, especially those with relevant content sites, actually do bring more engaged customers and better converting traffic. Small affiliates with fewer than 100 clicks per day to eBay bring 44 percent more revenue per click than the program average.

Sending buyer traffic from high-quality websites with a positive marketing experience sets the stage for a quality experience on a merchant’s site. If all stakeholders unite to promote quality, profits increase and perceptions of the channel improve. The following steps can help make that happen:

1. Advertisers – Calculate and compensate for the value delivered by affiliates. Reward and encourage by paying appropriately for engaging users through a positive experience. Some leading affiliate and ad networks already do this. AdSense adjusts cost-per-click payouts based on a series of quality-based metrics. Amazon encourages quality in a way by compensating more for deep linking and some of its tools, which it presumably has tied to better quality publishers and overall results. It’s also important to keep investing in affiliate tools, including better options to target by customer and geography, and to optimize landing pages.

2. Affiliates – Build high quality sites with value-added content, integrating links and ads in user-friendly ways. (For example, integrate merchant links within relevant content, not around it). Use more targeted creatives and tools to engage users in a merchant’s product and brand. Take advantage of landing page and geo-targeting functionality when available.

The affiliate marketing industry stands to gain much from increased debate and studies about quality, and ways advertisers and affiliates can work together to improve metrics. The more stakeholders can demonstrate the quality and impact of affiliate marketing, the larger the investments merchants can make in commissions, tools and people that can drive the industry and its best affiliates forward.

Will Martin-Gill is Director, Internet Marketing for eBay, leading business development for eBay’s affiliates channel.

Download the entire FeedFront issue 7 here – http://www.scribd.com/doc/17376069/FeedFront-Magazine-Issue-7
FeedFront issue 7 articles can be found here as well: http://feedfront.com/archives/article00date/2009/08

{ 1 comment… read it below or add one }

tom August 26, 2009 at 3:52 pm

I have thought about many of these issues before. Thank you for enlightening them here

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