ReveNews
Top 3 common affiliate program misconceptions.
There are some fundamental errors, omissions and misconceptions I’m often faced with when consulting to companies that want to start affiliate programs.
The #1 issue is that clients budget to reach ROI inside of 3 months.
This is due in part to promises made by us as an industry. I’ve seen material from various networks, software platforms and consultants that promise ROI by month 3.
Now, I don’t know if I’m behind on the curve here or if we’re just managing difficult clients 
but after analyzing the more the 85 programs we’ve managed and consulted to in the last 4 years I’ve found that:
1. 12% of programs reach ROI before the end of the 4th month of Trading.
2. 70% of programs reach ROI by the end of the 7th month of Trading
3. 18% of programs don’t reach ROI by the 7th month of trading
The #2 issue is that clients believe that recruitment is easy and affiliates are going to sign up in their droves.
When I reviewed the programs over a 12 month period I found on average:
1. Less than 5% of affiliates signed up in the first 3 months after launch.
2. 10% of affiliates signed up in the second quarter.
3. 37% of affiliates signed up in the 3rd quarter
4. 48% of affiliates signed up in the 4th quarter
The # 3 issue was activation. On average 38% of affiliates ever went active and produced revenue. Over a 12 month period I also found that:
1. 16% of active affiliates were recruited in the first quarter after launch.
2. 29 % of active affiliates were recruited in the next 6 months.
3. The remainder was signed up in the final quarter.
4. The top 30% of producing affiliates went active within 15 days after signup.
5. On average it took 120 days after recruitment for the remainder of the affiliate population to drive significant traffic and start producing revenue
So, it seems that the top affiliates are fast to sign up and then sit back and monitor the program before committing their traffic and resources.
They take their time and review the content, communication and wait for the program to get through its launch and work out the bugs.
They wait to be contacted personally and often require a unique deal to be structured before they’ll commence traffic.
So, what does this mean to us?
As affiliate managers we need to temper management’s expectations.
We need to realize that just like any other channel affiliate marketing takes time to set up and successfully implement.
Just like any other marketing campaign it needs to mature and develop before it starts producing significant results.
As always, I’d welcome any comments, feedback or flames
Jonathan
IMO, key to this whole discussion is the definition of ROI.
Well I like the article.
Thanks
Great post, especially agree with affiliate recruitment and activation..