If there was one word or phrase that could summarize this blog post, it would be “DECISION-MAKING“. Many companies have multi-online advertising channels to drive sales, reinforce brand awareness and harness returning visitors and lifetime customers to their offering. In many instances, this is a standard best practice with many success stories. However, over time it becomes a “balancing-act” to try and manage every channel to prevent duplication of efforts, investment and brand control. This cannot be more evident when it comes to Affiliate Marketing and Paid Search. Let’s discuss…
Over the years, I have not only heard the horror stories, I lived them and it’s a serious problem that needs to be handled very delicately. When you have an Affiliate Program and a PPC Strategy running together at the same time, some predefined decisions have to be made to ensure whether running both services makes business sense. It is also important for the CMO or whomever to identify the following, before jumping into this problem:
- Are our Margins good enough to participate in Affiliate Marketing?
- Do we have a strong enough brand to decide on commission rates?
- Do we want to protect our Trademark bidding in PPC?
- Which channel (PPC vs. Affiliate) provide the best ROI potential?
- Do we hire an Affiliate expert or manage this ourselves?
Affiliates are bidding on Trademark terms, using falsifying information on landing pages and text ads. Furthermore, there’s an even bigger problem when it comes down to sales forecasts and projections.
But this evolution of “cannibalization” of Affiliates taking over their merchants PPC campaign can be lessened and in some cases avoided altogether. According to Donna McCarthy, Director of Performance Marketing at The Jar Group, Affiliate Managers should have a policy on the following:
- Display URLs
- Ad Copy Restrictions
- Competitors on Landing Pages
- Secondary Search Engines
- Social Media Sites
In addition, McCarthy also states that it’s also a good idea to define your enforcement process as well. However, there are many levels in which a Merchant can define a policy that is best for them. It all depends on what makes sense of the company. For example, Donna states that there are three (3) relative “sweet spot” strategies that can happen.
Permissive Search Policy
- Open Bidding
- Potential Harm to PPC Search Results
- Higher Affiliate Search Revenue
- Overall ROI is lowest
- Discourages almost all Legitimate Publishers
Restrictive Search Policy
- No Search Allowed
- Low Risk of So-Called “Affiliate Search Cannibalization”
- Reduced Affiliate Search Revenue
- ROI is improved, but overall revenue may be reduced
- Discourages Legitimate Search Publishers
- May restrict position, limit campaign to secondary engines. Display URL enforcement.
- Strategic partnerships with trusted affiliates: brand bidding permissions, custom landing pages, ad copy.
- ROI improves, Revenue increase, but it takes more work!
- Allows for Constructive Performance-based Partnerships
Ways To Protect your all-important Brand
In most cases, when an Affiliate is accepted into a program, they are often already given a “don’t mess with my brand or I will shut you down” stereotype. In many cases, that can be a double-edged sword. According to the Jar Group, they emphasize that there are two (2) sides to the debate on whether PPC bidding on Brand terms is both BAD and GOOD for the Merchant.
Why it’s GOOD:
- Cornering the Market (Push out the Competition on brand terms)
- Protect Your Brand (think capture the flag)
Why it’s BAD:
- Compete for Visibility
- Drive Up Your CPC
If you have an existing Affiliate Program or looking to start one, I recommend hiring an agency, at the very least to help guide you though the Discovery and Launch Phases. According to the Jar Group, it’s a good idea to have a strong relationship with your affiliate manager, have CONCRETE Policies in place that make it crystal clear to the affiliates what they can and cannot do in the PPC Marketing Channel.
About Donna McCarthy:
Donna has over 15 years of experience in various marketing channels including; online, direct mail and events marketing. For the past 5 years, specializing in the affiliate and online marketing channels, working with LinkShare, Commission Junction, Performics and the Share A Sale affiliate networks. She has managed a wide range of programs from top Fortune 500 clients to small start up operations. Her experience has included running programs for such industry greats as JP Morgan Chase, Costume SuperCenter, Paragon Sports, Constant Contact, Acorn Online, Acacia Catalog, The Franklin Mint, Morgan Mint and Doheny’s Water Warehouse.