Seven Tips for Successful Affiliate Agency Relationships

As ecommerce continues to thrive, the opportunities for performance marketing are flourishing right along with it. In fact, overall U.S. ecommerce is expected to grow at a compound annual growth rate of ten percent between 2010 and 2015.

While this growth may signal significant opportunities for advertisers and publishers in affiliate marketing space, it doesn’t guarantee success. For an advertiser or publisher to fully seize the revenue opportunities that can be driven by affiliate marketing, a careful balance of strategy and execution is required. Advertisers who run their own program, in particular, can sometimes underestimate the time and resources needed to build strong relationships with publishers and to run an efficient and profitable affiliate channel.

One of the most effective ways for advertisers to find the right balance of strategy and execution and to succeed with an affiliate program is to work with an agency (also known as an Outsourced Program Manager or OPM). This may be your best option if you don’t have the resources to build the skills internally and when you need to focus on your core business. In most cases, your chosen agency will already have strong relationships with publishers and they should be a power user when it comes to the technology of your chosen affiliate network.

As with all marketing endeavors, there’s a bit more to it than simply hiring an agency to manage your program.  Following are seven tips to ensure that you make the most of your affiliate agency relationship.

1.    Attach an incentive to the agency’s performance

After all, isn’t performance marketing all about performance? While you should expect to pay a monthly retainer, the ideal model is one where there is an incentive that’s also attached to the performance of the program. This way, the agency team is even more inspired to drive a successful program on your behalf.

According to Greg Shepard, CEO and founder of Affiliate Traction,

“A performance model is the best way to make the most of your affiliate program. The way we see it, either we make money for our clients or we don’t make money. Using this model, our clients know that we are fully vested in their success.”

2. Set realistic goals

This includes overall performance goals as well as the time expected to start seeing results. In many instances, a client may mistakenly believe that their program will grow by leaps and bounds within a very short period of time.  While you should start to see incremental results within two-to-three months, it’s best to conduct a more thorough and thoughtful analysis after the program has been up and running for a bit.

Here’s some advice from Paresh Vadavia, Co-Founder and Director of Affiliate Marketing at OPM Pros,

“Don’t just assume that because you’ve hired an agency you’ll have overnight success because traction takes time. You should allow a minimum of six months to evaluate the success of the program. However, if you’re tracking progress carefully on a regular basis, each month or week for example, you can get a better handle on how well your campaigns are performing instead of being surprised later.”

3. Ensure transparency

From the start, you should have a solid, mutual understanding of reporting requirements and other details such as having a view into publisher contacts.

Having a bird’s eye view into the day-to-day activities is also an important part of the agency/client relationship. This becomes especially true when you’re in the midst of a big campaign and may need to quickly shift gears.

4. Consider short-term, renewable contracts

While some agencies may suggest a one or two year contract, you may want to suggest shorter-term contracts that are six months or perhaps month-to-month. With shorter-term contracts that include an incentive, you can consistently bring out the best in your agency team.

Additionally, if you do opt for a shorter-term contract, you may want to be sure that the same team will be in place over time. This way, you can avoid a continuous learning curve and maintain consistently high levels of performance that are usually gained when you have a dedicated team that continues to learn more and more about your business.

5. Demand branding consistency

Be sure that your agency has processes in place that will oversee and evaluate the way your brand appears online. The major affiliate marketing networks have tools for brand compliance and many agencies can offer additional brand compliance services. Empower your agency to take the appropriate actions if there are any compromises in the way you’re represented by or aligned with certain publishers.

6. Speak to references that aren’t provided by the agency

While the references the agency provides are most likely going to share valuable and positive feedback, consider reaching out to other clients that have worked with the agency. This way, you can get a better sense of what to expect so you can make a better-informed decision.

7. Evaluate all of the agency’s services

If you’ve decided that an agency is the best approach to managing your affiliate channel, explore all services provided by the agency. You may save money in the long run.

For example, some agencies manage their client’s entire affiliate program including legal terms, branding, publisher management, and payments. As you evaluate the services offered by an agency, keep in mind you’re ultimately hiring the agency to help drive online revenue and return on investment while not adding to your workload.

The Key to Success

An affiliate marketing agency can be a cost effective alternative to hiring additional staff or it can augment your existing efforts. The right agency will turn into a trusted, strategic advisor that can help you reach your long-term ecommerce objectives. The key to success is identifying the right agency based on your business needs, their expertise, and their proven ability to successfully drive effective and profitable results.

About Scott Allan

Scott Allan is Vice President of Marketing for LinkShare and has over 15 years of technology marketing experience. Prior to joining LinkShare in 2007, Scott worked in a variety of corporate marketing and product marketing roles at companies that include IBM, Lotus, EMC and Quark. He earned his undergraduate degree in Finance from the University of Massachusetts at Amherst and an M.B.A. from Boston University.