Well this could raise a few eyebrows as I raise the issue of affiliate marketing agencies and their worth firstly for their clients, and secondly for the industry. Recently there seem to be two types of agency develop the what id like to call ‘original’ agencies which were just set up by groups of fairly internet savvy people with bits of knowledge in most areas. They all offer the same type of service, PPC management, affiliate management, SEO consultancy etc. They cover everything in a basic sort of way – not to say that some couldn’t work wonders for some online businesses.
The next type of agency are affiliates, hang on a minute! Yes that’s right basically more and more affiliates seem to be offering their services to merchants which is fine and they basically explain how best to work with affiliates, common mistakes or problems and can give very good guidance and im presuming they then take either a share of the affiliate profits or some monthly fees.
Ill start by giving my thoughts on the original type of agency, im all up for these. I think that any company not really understanding affiliate marketing or the online market place as a whole should try and get some help to move forward, and just by setting on an agency shows they are trying. The agency will then put some time into promoting the programme and trying to build it up. If things look like they are heading in the right direction I’ve noticed agencies then tend to put more work in and build it further this obviously works well for the merchant who is happy with the results and works well for the affiliates and agency who will both probably see more money from the extra work. However if the programme doesn’t really get going or shows no sign of being able to grow then the agency could, and probably would slack off a bit.
To compare them to anything id compare a merchant launching with an ‘original’ agency like for like with an affiliate launching a new PPC campaign. Start of with a bit of time and budget that your prepared to loose if it works or looks like it could spend more time and money, if it’s not working stick it on pause.
Now the second type of agency, the affiliate come agency. Firstly not all, and by no means does this insinuate that I think all of these are subject to the below, but I think they could be harmful to the affiliate industry as a whole.
Things I have concerns about:
- Conflict of interest
- Distanced relationship
- Contact driven relationship
- Pubic image or merchant
One by one…
Conflict of interest
This is the obvious one, an affiliate giving advice to a merchant is always going to be thinking about their best deal. A merchant has a lot of things to consider when setting things such as commission rates and bad advice at the start could be crippling for the long term prospects of the programme. By bad advice I don’t mean advice such as “you don’t need text links, banners are better” I mean advice that will stop the programme growing and maturing. How can an affiliate know this? Well that leads me onto my second point…
Distanced relationship
This isn’t just geographical, that’s not so much the issue online people can work from just about anywhere with a connection. The distance comes in the understanding, the affiliate may be sat at home, or even in a small office talking with a client on the phone about their product and their affiliate programme.
Lets say the product is in a sector where the average commission is 20% - so the affiliate says we need 20%+ ideally 25% to make an impact. However the affiliate doesn’t know the merchant website converts twice as well as the competitors websites because their products are hugely discounted. However if the merchant is taking this affiliate agencies advice as ‘authority’ they decide to launch with 25%. The affiliates not really sure what profit margin the merchant has or how much there is to play with, they increase commission for people, add in tiers and basically do everything that’s done with most programmes.
But because they don’t have an understanding of how the merchant is working, the affiliate isn’t actually there with an understanding of the merchant they can quickly turn the affiliate programme into the most expensive marketing channel they have in operation.
Contact driven relationship
Many of the affiliates now moving into affiliate management have been in the industry a long time – which you’d think was good, knowledge, issues general experience. However it just seems that they use their contacts to grow their programmes. So basically saying to a new merchant I know 4 big PPC affiliates and these 5 big websites ill get you on, as they know the people and can call in favours. They call in the favours, 2 scenarios:
- They pull it off and everyone starts promoting them. The affiliate programme is hinged on the contacts of the one affiliate giving advice and their friends. It also makes the industry more inbred there are very few new affiliates coming into the industry and more smaller ones leaving – situation in 2, 3, 4 years time?
- Nobody promotes the merchant as there busy. The merchant isn’t getting the sales promised and within the space of 2 months the merchant drops the affiliate agency. The agency then sends out newsletters and makes public forum posts that the merchant is at fault, they did not co-operate and basically they were not suited to affiliate marketing. Surely all this should be established before the agency takes them on? If the merchant cannot be worked with, aren’t flexible and open to the ideas the agency has why let them sign up and begin promotion of the merchant.
Public image of the merchant
After the merchant has been dropped some of the comments made between affiliates, networks, agencies are, quite frankly unprofessional. Comments saying that the merchant didn’t want to pay affiliates, didn’t want to spend money, was looking to cut costs and hence wasn’t suitable – this harms any return the merchant may want to make into the industry as well as putting others off.
Im going to conclude now as this has dragged on and I still feel like I’ve got another few pages that I could run into. My conclusion is that if your going to help a merchant get started because they are a good merchant fine, do it and do it for free. If you are going to take on promoting the merchant as an affiliate manager do it properly. Aim to recruit 5 new active affiliates every week that you don’t know, work with the merchant, understand the merchant and make them realise that affiliate marketing is the best move they have ever made.
