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Making SEM and Affiliate Marketing Work

In a recent blog post, I wrote about the Death of Affiliate Marketing in the online marketplace. Citing that companies are being more cost conscious with all of the expensive monthly fees, setup costs,  affiliates bidding on Trademark terms in paid search, etc…  Well, after giving this some thought, there are some useful and opportunistic tactics where companies that can leverage their affiliates in paid search resulting in a Win-Win for everyone, especially the consumer. I’m NOT talking about traditional Branding…. I’m talking about New Customer Aquisition.

Trademark Bidding Rules:
Ok, so we all know that there is major issue Trademark Bidding with competitors and affiliates bidding on a company ‘s trademark search terms. In most cases with SEM, the "branding" search terms drive the most revenue at the lowest costs, resulting in a continuous ROAS% profit machine. However, as I have learned firsthand in this industry, acquiring new customers by bidding on more generic search terms are getting more expensive as competition and saturation influence ROAS and profit margins.

So in order to "not piss-off" affiliates who are trying to generate additional sales, position your affiliate network NOT as a Branding Channel, but as an Acquisition Channel because the "SEM reality check" has taught us that getting new customers is more expensive and just shutting affiliates down because of  Trademark bidding is a ticket for disaster because they will go elsewhere, most likely to a competitor. You need to empower them with genuine and useful information to entice them to  come back to the program and give them the initiatives and tools they need to drive in more new customers. (ie. share the love!)

Help me… Help you! (Entice your Affiliates in SEM Battles)
After discussing the Trademark woes,  it’s a good thing to share with your affiliates new ideas that can excite and bring back to life this once powerful marketing channel. Let them know things like "hey, of the 10,000 keywords that we are bidding on, only 10% are driving successful revenue (mostly brand terms). Share with them that there is a great opportunity for them to penetrate new markets and you need their help do it. Make them feel they are a part of the overall plan and be very clear that they will be rewarded for their participation.

Here are some other things that can be addressed:

  1. Provide them with new products coming to market which can you an upper hand on competitors.
  2. Give them new customer acquisition bonuses based on specific product categories that have historically achieved lower ROAS% in the past
  3. Provide with SEM tactical best practices documents like…
    1. Keyword research for top products
    2. examples of Ad/Creatives that have work well iin the past
    3. Provide them with new (CTA) landing pages
  4. Be Honest with them. Share some basic analytics/data with them
    1. Conversion rates
    2. Top 100 products
    3. Top converting products
    4. Bounce Rates

If there is anything to gain from affiliate marketing and paid search, it’s finding a way to make it successful over the short term but most importantly the long term. One of the hardest things anyone can do with paid search is to turn it into a money making machine. As competitors continue to saturate the market and raise CPCs, it becomes more and more difficult to acquire new customers while sustaining a healthy ROAS% based on traditional Cost/Margins of products & services. It is this trend alone where the Affiliate Marketing Channel can be leveraged to your advantage. Let your affiliates do your Branding for you; Let them drive more qualified NEW customers to your website and lastly let the affiliate know that you want them to succeed because if you can help them succeed, imagine the long term benefit of new and repeat buyers over the next 5-10 years.

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