Fixing Your Performance Marketing Leaks
There's a misconception about performance marketing in that it's like turning on a faucet - a quick, and easy additional opportunity to obtain customers - according to JEB Commerce Founder and CEO Jamie Birch -who says while it can be a channel for rapid growth, performance marketing isn't something you turn on, walk away from and enjoy the sales.
"Like most things in life that are worth doing, this channel needs resources, time and attention to be successful," said Birch. "And not only to be successful, but also to be efficient and there are many things to watch out for that you have to spend time on to ensure you do not fall into tax or legal trouble."
In fact, one of the most common mistakes brands make is starving their affiliate programs of resources. The "set it and forget it" mentality won't do. Another, says Birch, is putting their program on auto-approve and allowing every single applicant into their performance marketing program.
"This allows for every spammer, scammer, fraudulent and difficult affiliate into their program," Birch continued. "It introduces a huge liability into their lives that they don't need. Brands often treat affiliates the same no matter what type they are, and they often make broad sweeping generalizations about categories of affiliates and their performance, removing or focusing on a category, when they should be focusing on individual partners."
Part of the reason for making these performance marketing mistakes is that companies often reduce the resources dedicated to the program after one or two years, thinking their current partners are sufficient.
"The digital space changes every week and there are always new partners popping up," said Birch. "This thinking often leads to a slow reduction in sales and the brand closing the program. You have to actively manage, recruit and find new partners to maintain growth."
Further down the road, brands start to become arrogant - that they have it all figured out and don't need help or to learn from other brands. Enter: the affiliate performance audit, which keeps everyone in check.
By reviewing a number of different areas (more on that later) of a company's affiliate program, the business is able to locate and fix what isn't work, optimize what is performing well, and make other adjustments to keep participants making money and staying in compliance. So, what elements do some of the most effective audits include?
"Audits identify program infrastructure, competitiveness and insight into traffic origins," said Greg Hoffman, president of performance marketing agency Apogee. "Not all programs launch with bells and whistles. Sometimes pieces are added later, such as data feeds, advanced attribution rules and autoresponders. Audits should also compare commission levels, tracking gaps and conversion with top competitors. The most important analysis should be an in-depth examination of each active affiliate and how they are promoting the merchant."
JEB Commerce uses a multi-step auditing procedure that analyzes and makes recommendations on performance marketing program areas including creative assets, promotions, placements, partners, strategy and legal issues.
It is the legal issues and the FTC in particular that Tricia Meyer, CEO of Sunshine Rewards, suggests is often missing in brands' performance marketing audits.
"When brands perform audits I wish that they included FTC disclosure compliance," said Meyer. "Too many either do not include it at all or include it but do not in any way enforce it. Brands need to take a stand that affiliates who do not comply will be removed from programs. This includes affiliates who are reviewing their products and also promoting via social media."
When one affiliate fails to disclose their financial relationship with a brand, the whole program suffers - as huge fines could result. Everyone, however, can benefit from a well-run program.
"Most of the audit comes down to having competent staff," said Meyer. "If a brand does not have someone in-house with the knowledge and experience to audit the program, it needs to outsource to someone who does. The outsourced program management business is huge and there are plenty of consultants out there a brand can seek out to make sure that the program audits are done with the best practices of the whole industry in mind as well as the profitability of the brand."
Hoffman, for instance, conducts brutally honest audits (complete with unexpected advice).
"The majority of [my audits] recommend the affiliate channel should be burned to the ground and started over," said Hoffman. "This mostly applies to those that have been on auto-approve for many years. I've also recommended some brands close their programs forever. The quality of the traffic is vitally important to the future success. The affiliates must be willing to obey strict terms of service and the merchant needs to understand and value the traffic. Only then can you move forward from a successful audit."
JEB Commerce also provides an auditing service that takes roughly 30 days to complete and provides brands with a complete step-by-step guide on how to increase the productivity, efficiency and profitability of their performance marketing campaigns as well as recommendations for technologies that help reach new customers and meet ROI goals.
"Performance marketing can and should be a huge part of any brand's digital marketing strategy," said Birch. "But it has to be resourced correctly with the right talent, expertise and capability. It can be either wildly successful or annoyingly frustrating. Active management is the only way to achieve these goals."
:: Top Myths of Performance Marketing :: Jamie Birch of JEB Commerce shares some common misconceptions of the channel:
+ It's always just a commission relationship. This is often not the case. We have many relationships with publishers that are flat fees, per click or some other unique payment agreement that fits both the advertiser's requirements and the affiliate's.
+ There is a guru who can teach you a simple five-step plan to make this a success. There isn't.
+ All sales through affiliates are garbage and come in at the end of a sale and steal commissions. This isn't true either. Does this happen, yes sometimes, but there are a number of great technologies that most of the networks offer to ensure this doesn't happen. All too often one bad apple spoils the entire channel when what really needs to happen is responsible and active management of a program combined with great technology.