Incentive Affiliates
Incentive affiliates are an increasing presence in performance marketing. Members direct their online shopping through a specific website in exchange for rewards. Incentive site users are typically regular online consumers who understand that research can yield savings and better deals, and prefer the Internet as their research channel. Value tends to be just as important as brand names, though a prominent brand coupled with a significant reward is usually a winning combination.
Incentive affiliates can add value to most affiliate campaigns but thrive when brand loyalty is not the most important factor in making a decision to purchase. In vertical markets where switching providers is part of the core sales message (for example utilities), incentive sites drive a significant number of incremental and conquest sales.
There are several core types of incentive customer:
Incidental
The customer is motivated by the product being purchased and uses the incentive site as an added benefit. The incentive site and reward available may influence the choice of product or retailer, but other factors are involved.
Incentivised
The customer is motivated by the incentive being offered. The product or service is usually secondary to the reward on offer.
The different styles of incentive site drive customers with different motivations.
Cashback
Members are rewarded with cash that can be withdrawn and spent on anything. Mainstream cashback sites generate both incidental and incentivised customers, and a single consumer can meet both criteria for different sales.
Single Reward
Members earn credit toward a specific item or service. Single reward sites tend to work with a limited range of merchant partners, usually aiming at incentivised customers.
Discount
Members earn credit to pay for or offset the cost of a specific product or service. This is increasingly popular for software products. Customers are incentivised, though they tend to be savvy online users and selective about the offers/products they sign up for.
Cause-Related
Commission earned by members is donated to a third party – usually a charitable cause. Customers can be either incidental or incentivised, depending on the focus of the site.
Virtual Currency
Members exchange affiliate commissions for virtual items – usually in online games. Customers are almost exclusively motivated by the incentive, and favour offers which have no upfront cost. A minority of users are inclined to “hack” or tamper with the system.
Coupon and Voucher
Vouchers are a desirable and popular resource for online consumers. Voucher websites capitalise on this by making vouchers easily accessible via several channels.
Competition between voucher and coupon websites encourages them to feature as many vouchers as possible. If you release a voucher for affiliate use, it is very likely that it will be adopted by most major voucher websites.
PPC
Return on Investment (ROI) is key to a successful PPC campaign. The commissions earned should be well in excess of the money spent on the campaign to ensure profitability.
A properly executed Pay Per click campaign can yield fast results and be a cost-effective method for affiliates to drive traffic to merchants. Campaigns can be very broad, covering multiple brands, merchants and products, or focused on a tightly defined niche.
The PPC arena is a dynamic environment – competition from other bidders can change the dynamic of an existing campaign, meaning that a campaign that made money last week may not perform as well in the future.
Email
Email affiliates specialise in promoting products and services via email. For some, this is their primary source of income, while for others it is a secondary revenue stream. They may broadcast to their own members or may purchase, rent or otherwise acquire access to a third party list of recipients.
Specialised email marketers traditionally worked on a CPM, or “cost-per-mille” basis, charging a set rate per thousand emails sent out. If email data hasn’t been booked on a CPM basis, the email specialist may make the data available to CPA programmes. This means that occasionally the merchant can get access to high-performing, branded data on a CPA basis.
The effectiveness of a CPA email campaign depends on several factors and can take some practice to get right, but a properly run and maintained email list sending relevant emails can be immensely profitable.
Content
The term “content affiliate” covers a wide range of publishers and websites.
Content websites compete for search engine rankings with editorial, user-generated and auto-generated content. Sometimes called ‘native’ advertising and paid for placement spots, affiliate marketing can deliver these ‘native’ positions in a cost per acquisition model.
“Thin” Content
Designed solely to feature in search engine results, thin sites provide little to the user in terms of information. Nonetheless, they perform an important function by allowing merchants to increase their presence in search engines, supplementing their own rankings.
These sites are monetised using affiliate links and PPC results (typically Google AdWords).
“Rich” Content
Rich websites are designed to add value and interest to visitors. Repeat visitors can be high, and they also provide the opportunity to advertise through newsletters and social media.
Personal Interest
Personal websites perform an important function in affiliate marketing. Typically appealing to niches with low to medium traffic, they allow merchants to communicate with visitors who are not represented by mainstream content publishers.
Affiliate marketing helps Personal Interest publishers to monetise the hard work that goes into maintaining their site and can be a good introduction into the performance marketing industry. Many current super affiliates started out with non-commercial hobby websites.
Price Comparison
Price comparison is considered by many consumers to be a valuable aspect of the purchasing decision.
Price comparison sites compare the prices for the same product from as many online retailers as possible. Different sites work on different revenue models, but the affiliate industry is well represented. Some sites offer only price comparison, while others integrate price comparison into thin or rich content sites.
Price comparison services rely on the accuracy of the data provided by the merchant, and usually, have an automatic process to update new products and price changes. Consolidating lots of merchants into one service carries many technical challenges – merchants often name the same product differently or omit important model numbers.
Video and Rich Media
The proliferation of Broadband Internet access has changed the face of the Internet and made video and interactive websites more accessible.
The popularity of video sharing sites and their prominent placement in the search engines has opened new possibilities for affiliates who create bespoke videos for specific products or retailers, accompanied by affiliate links.
Some advanced video publishers generate videos automatically, often using the product data feeds provided by merchants as a source of accurate and relevant descriptive content.
Arbitrage
Arbitrage publishers are sophisticated publishers who purchase traffic via PPC and redirect it to merchants at a higher charge.
By closely monitoring the cost of purchase and sale, arbitrage publishers guarantee ROI by buying low, selling high.
Some Arbitrage publishers are prepared to work on a CPA basis – in effect acting as a normal PPC affiliate, while others use affiliate links as a backup for unsold inventory.
Co-registration
Co-registration allows you to leverage the user base and registration path of other websites to recruit members for your own website, service or email list.
When a visitor registers for an online service they are often presented with the option to also register for a third party. Selecting this option gives permission for the user’s data to be shared, usually in exchange for a commission.
Co-registration can be facilitated by several affiliate networks.
Behavioural Retargeting
There are a growing number of affiliates out there providing the facility of marketing to users that visited your website and not purchased something. These affiliates normally require the merchant to place some extra tracking code on your checkout page (and possibly other pages too, depending on the tracking requirements). Behavioural Retargeting methods do vary and it is worth considering the repercussions working with behavioural retargeting affiliates.
E-Mail Remarketing
E-mail remarketing is also a new concept in affiliate marketing. A merchant places some tracking script provided by the affiliate on their site. When a user enters their email address into the merchant’s checkout but then decides not to buy (ie closes the window or moves away from the merchant’s site), the email remarketer will then send an email to the user. This normally has a “closer” offer, such as free delivery or a voucher code for money off.
Enablers
The massive potential of the affiliate industry has prompted several third parties to develop third party products and services designed to enhance affiliate sites in exchange for a fee. Often concentrating on interpreting and organising product data, third parties can add significant technical clout to relatively small online retail operations – some examples of these technology affiliates are below.
Medifusion
Medifusion aggregates product feeds to provide data services that power several price comparison websites. Medifusion works with affiliate networks and directly with merchants to obtain the most up to product data, and combines it into a unified price comparison service. The service is available as an advanced xml web service and easy to customise widgets.
Skimlinks
Skimlinks provides a simple solution to monetise user generated content. Links to external websites are automatically analysed and replaced with affiliate links where appropriate. This allows affiliates and the publishers to concentrate on maintaining and promoting their website, rather than maintaining affiliate links on an ever increasing number of pages.
Remuneration
Each enabler works on different terms, but they generally request a percentage of the revenue generated through their service. This can be achieved in different ways – often your links will be substituted with the enablers to allow them to earn commission for some sales – for example on an 80:20% split.
Software
Making money online… there’s an app for that! The portable nature of affiliate tracking links and the emergence of “always connected” Internet users have enabled a new generation of monetised software that can be an effective tool for increasing an affiliate campaign’s performance.
Toolbars and “shopping assistants”
Usually functioning inside your web browser, toolbars are relatively easy to develop and can add real value if properly thought out. Unfortunately, they are also an easy model to use to deploy spyware and can suffer from decreased consumer confidence.
Mobile apps
There are many apps designed to assist your shopping experience, predominantly for Android and iPhone platforms. In contrast to toolbars and rebate checkers, mobile apps often take advantage of your physical location, for example allowing you to scan a barcode in-store to find the best price online. This can help win bricks and mortar customers over to your online brand,
Now that you have a better understanding of types of affiliates, find out how to get started and start earning commissions in New Zealand with Slice Digital.
