Posted by Craig Greenfield, SVP Performance Innovation
This blog was orginally posted on eMarketing & Commerce
Your affiliate marketing and paid search programs are intrinsically linked. For instance, your brand uses paid search to generate leads, while at the same time your affiliates use paid search to generate leads for you. Paid search and affiliate marketing success often depends on integrating your paid search program with your affiliates’ programs. This can be accomplished through affiliate governance.
Affiliate governance requires a flexible operating framework that can be used to relay core messages to your affiliates. Affiliates manage their search efforts independently, yet must be directed to follow brand standards and best practices. Affiliate governance strategies help in two ways:
- They prevent affiliates from competing with your brand in paid search
- They foster brand/affiliate collaboration to boost paid search visibility
Competing with your affiliates in paid search can raise cost per clicks (CPCs). It can also raise overall cost per acquisition (CPA). For example, your affiliates could be generating leads through paid search and charging you commission for those leads in situations where you should be generating the lead yourself, therefore avoiding paying said commission.
This not only inflates overall CPA, but also results in inaccurate revenue attribution, skewing the data needed to make future channel investment decisions. The affiliate network Atrinsic recently analyzed hundreds of advertisers running affiliate campaigns and estimated an average of 40 percent of revenue attribution per advertiser is inaccurate.
To avoid competition and attributing revenue to the wrong source, set some paid search ground rules for your affiliates. For example, prohibit your affiliates from bidding above you (or bidding at all) on your brand terms. While nearly all major brands prohibit most affiliates from bidding on their trademarked terms, the majority of brands do allow a few affiliates to have limited search privileges. This reduces competition, subsequently reducing CPCs. It also increases the possibility that searchers will click on your ad before an affiliate’s ad, potentially saving you a commission.
However, allowing affiliates to outbid you on particular brand terms can actually improve efficiency. For example, assume Old Navy is running a Groupon promotion. A person searching for “Old Navy coupons” probably isn’t looking for OldNavy.com, but rather a coupon site. They likely wouldn’t convert from Old Navy’s ad. Thus, Old Navy would improve efficiency by allowing Groupon to bid above it for “Old Navy coupons.” Searchers would land where they want, and Groupon — not Old Navy — would pay for the clicks. Of course, affiliate bid governance rules require a test-and-learn approach to determine which rules work best in each situation.
Once you’ve set the ground rules, ensure that affiliates abide by them. This requires affiliate-monitoring technology. Monitoring technology should be able to identify whether your affiliates are doing the following:
- Following bidding guidelines
- Using your trademarks correctly in ad copy
- Following landing page guidelines
Affiliate governance not only prevents conflict, it fosters collaboration. The goal is to ensure that your brand dominates the paid search results for brand queries, pushing down potential competitors who are bidding on your brand. For example, search engines don’t allow advertisers to serve more than one ad per query. To supplement your one ad, organize affiliates to serve ads that promote your brand, boost brand awareness and drown out your competition. You can also increase visibility for generic queries by communicating collaborative keyword and messaging strategies to your affiliates.
Affiliate governance uncovers opportunities where affiliate marketing interests should yield to paid search interests, and visa versa, to boost overall search and affiliate performance. Overall success is therefore most likely achieved when you have one entity responsible for the combined performance of the channels. Ask yourself, “How can we integrate search and affiliate to increase overall leads, conversions and efficiency?”
In the end, performance is all that matters.