DM Confidential – Affiliate Marketing Tips

The Upside of a Net Loss – Tip #2
By Missy Ward and Shawn Collins

Affiliate managers talk about two percent of their affiliates generating ninety-eight percent of transactions, as if that makes sense.

It’s time that you trimmed the fat off your affiliate program. According to data that I collected recently for the AffStat 2005 Report, thirty percent of affiliate managers downsized their affiliate programs in the last year.

While the prevailing mindset in affiliate marketing has been quality of quantity for years, there are still lots of people that talk quality and keep quantity.

The Kindest Cut
Why bring down the size of your affiliate program? After all, Amazon touts a base of nearly a million affiliates. First of all, you’re not Amazon. And second of all, just because they are doing it doesn’t make it right.

Amazon sells Sea Monkeys. So does that mean you’re going to start selling Sea Monkeys on your site?

But seriously, folks. Having a gigantic number of affiliates may dazzle the MBAs in your office, but it’s a liability to carry extra weight. Think about it, how well can you monitor potential fraud, shady adware, CAN-SPAM compliance, and your brand when you’ve got tens of thousands of affiliates?

You can’t handle those very important issues properly with a big, gangly affiliate program.

Less is More
Yes, I know the party line. You are risking the chance that you might throw out a diamond in the rough if you remove affiliates from your program. That’s a myth, but I’ll play along.

As a first step in removing the non-producers, slice out all of the players that are running their operations from free sites (Angelfire, GeoCities, etc). If they are not willing to invest $8 in a domain, they are not going to be diamonds this year. This is strictly Cubic Zirconia territory.

If you have been accepting affiliates on auto-approval, and that is nearly a quarter of you, according to the AffStat 2005 Report, your affiliate program is probably well populated with these sorts of sites.

Oh yeah, there’s the argument that it doesn’t cost anything to keep the dormant affiliates in your affiliate database. Well, if you are doing your job and monitoring your affiliates, they do cost something.

They cost you time to monitor them. It’s easy to catch the scammers that go overboard and drive astronomical stats. They’re greedy and rarely succeed. The real pests are the affiliates with junkyard sites that lie under the radar and do a little bit here and there to see if you’ll catch them. They cheat dozens of programs at a time, and their take can be substantial in aggregate.

Affiliate-land Security
After you’ve dumped all of the free sites, take a look deeper at your affiliate base. You’ve got to look for affiliates that have anomalies in their profile. This is a lot trickier, but important.

These are affiliates that might have seduced you into clicking the Approve button, because they pretended to represent a big time site. If you have Yahoo.com or Forbes.com in your list of inactive affiliates, take a closer look.

Do these accounts say to make the checks payable to Joe Smith and a Hotmail email address? Probably. These are affiliate sleeper cells. They join up with lots of programs, sometimes with real information stripped from WHOIS records, and later update their profile to collect their ill gotten gains.

Usually I’d wince when talking about a net loss, but in the case of an affiliate program, it’s a good thing to optimize and minimize as time goes by. Otherwise, you could be leaving yourself wide open to shysters, spammers, and tricksters. Staff up or cut down!

Missy Ward is the Director of Marketing for CPAEmpire.com and Shawn Collins is the President and CEO of Shawn Collins Consulting. Both are co-founders of Affiliate Summit – the leading Performance Marketing Conference held annually.