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Affiliate Management: What It Is & What It's Not

Posted on 12.04.2011

If there is one thing every brand that is thinking about an affiliate marketing program should be aware of -- it is the topic of this article. So, whether you already have an affiliate program in place, or are just exploring a possibility of starting one, I'm glad you're reading this.

Management of ...?

First things first, and let's start by defining our terms. Yes, I did previously state that there's no such thing as "affiliate management", and here's why:

You will often hear terms affiliate manager and affiliate management used interchangeably with affiliate program manager and affiliate program management. ...it is important to define the terminology right at the outset, and not let some of these terms have a negative effect on our very approach to managing the affiliate program.

I don't believe it is possible to manage affiliates. The reason for this is the very essence of the relationship at stake. Affiliates are very different from any traditional workforce. Although they all vary in types of marketing methods used, psychological maturity, professional experience and training, there is one thing which is true about all affiliates, and it is the driving force that moves them. All affiliates are motivated by their love of independence. They are normally not tied by performance contracts and can choose what affiliate programs to promote, and what merchants to drop, without notifying the merchants themselves. By the very definition of the term, affiliates are unmanageable. ...online businesses that run affiliate programs should understand that their job is to manage the program, and not these independent marketers that have chosen to join it. [source: Affiliate Program Management: An Hour a Day, p. 74]

But I take that back today! No, not because any of the above is incorrect. Rather, because, much depends on what you mean by "affiliate" in this phrase. If you understand "affiliate" as the channel, and not as "affiliates", you'll be fine. Just remember to stay away from managing affiliates. Practice good transformational leadership with these independent marketers, and manage the program (or the channel).

Who's Responsibility?

For nearly every affiliate network's name one of the top-searched keyphases is [network's name] + ["scam"]. And this isn't surprising. To explain why, let's turn to a true story. I once had an online merchant approach me. The beginning of our dialogue could be condensed as follows:

Merchant: We are looking at promoting our e-business through affiliate marketing, but got burned on [ABCnetwork]…

Me: [ABCnetwork] is actually one of the best platforms around (in my opinion)…

Merchant: Funny you should say that [ABCnetwork] is the best. We had no luck with them. When you say "platform", that doesn’t mean they are the best affiliate or have the best publishers, right? You mean in terms of tools/admin, etc, right? Having no results with [ABCnetwork] makes me gun shy…

I am certain situations like the above one -- where merchant's mistake affiliate networks for affiliate program management companies -- significantly contribute to the popularity growth of those [network's name] + ["scam"] search phrases. Affiliate networks are not to be mistaken for affiliate management agencies. They are not hired to grow and manage your affiliate program. They are platforms that provide merchants with such services as tracking, reporting, hosting of creatives and datafeeds, payments to affiliates, but the vast majority of affiliate networks do not offer "affiliate management" services by default. Some may provide these for an extra fee, while others don't. To recruit affiliates into your program, manage the relationship with them, insure and monitor link placements, police and enforce compliance with your affiliate program's agreement… for all of these and much more you need a program manager. These tasks could either be handled by a trained in-house employee of yours, or an external agency, commonly known as Outsourced Program Managers (OPMs). But don't expect your affiliate program to grow into anything successful if upon launching you just leave it running in an auto-pilot mode.

How to Evaluate?

A couple of years ago I was approached by a merchant who asked for help in evaluating their affiliate manager's "success/productivity on 5 pieces of measurable data". I loved the task! After all, once you've hire one, you've got to clearly understand how to gauge what value they bring in. So I came up with the following 5 KPIs to measure:

1. Affiliates Recruited -- Number of new affiliates recruited into the program by the affiliate program manager.
2. Activity Index -- Calculated as the percentage of affiliates active in the program over a given period of time (one month recommended).
3. Activation -- Number of previously stagnant affiliates activated within a given time period.
4. Traffic -- Increase in hits/clicks sent to your website by affiliates. Some also measure the number of impressions of merchant's creatives/links. The impressions count can often be reflective of the branding value affiliates bring to the table. So you may measure both.
5. Sales Volume -- Increase in sales, leads, or whatever other action you may be seeking to generate through affiliates. When it comes to sales I focus on the monetary figure.

Best of luck building successful affiliate programs. Remember, auto-pilot is not an option.

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