Whitepaper

7 steps to start an affiliate program

Affiliate marketing is performance based marketing. Publishers («affiliates») convey visitors to an Advertiser, and get paid when the visitor performs an agreed action on the Advertiser's website, such as a purchase. This setup is called an affiliate program and can principally be used by any business with a website at which visitors can make some sort of transaction.

Preparing and starting an affiliate program consists of seven steps.

1. Choose affiliate network

Most affiliate programs are administered by an affiliate network handling the technical and administrative aspects such as tracking, support and payments. The choice of affiliate network is normally decisive for the success of your business within affiliate marketing. It is therefore important to choose a network which suits the needs of your business. Read more about choosing the right network in «9 things to consider when choosing an affiliate network»

2. Establish commission levels

Affiliate marketing is performance based, meaning that as an advertiser you pay commissions to publishers when they convey purchasing customers to your site. The commission can be a fixed fee per conveyed transaction or a percentage of a conveyed order value. If a publisher conveys a purchase with an order value of 1000 SEK exclusive value added tax and shipment, the commission can be set to for instance 10 percent of the order value, or a fixed amount of 100 SEK.

To incentivize a publisher to convey visitors to your site, it is important to set the commission level sufficiently high for the publishers to receive a satisfactory return on the traffic they send to your website.

Calculate the highest commission level you can pay. Since the cost is known in advance, it can in principle be regarded as the cost of goods sold. Compare with the cost of goods sold you have via other channels, both physical and online. Check what commission levels are offered by competing affiliate programs. Your commission level should be somewhere in the middle. The affiliate network you have chosen can help you with advice on appropriate commission levels.

3. Determine advertising rules

Different types of publishers use different methods in their marketing. Most advertisers are happy to see informative websites with good content, but certain methods may not suit your business. Therefore, it is important to specify what types of marketing are allowed within the framework of your affiliate program. Some important methods to decide on are:

Voucher codes

Voucher or discount codes are widely used in affiliate marketing to increase conversion rates. These are websites that collect discount codes from a large number of advertisers. Specify whether you allow your business to be marketed using discount codes. If the answer is yes, you should provide appropriate discount codes within the framework of your affiliate program.

Cashback

Cashback means that a publisher offers his visitors compensation for visiting an advertiser and carrying out a transaction. Thus, the publisher receives commission via your affiliate program, which is shared with their users. Cashback should not be allowed if the customer does not have to make any form of payment on your website, for example if it concerns a request for interest or a loan application.

PPC (pay per click)

PPC means that publishers pay for their links to appear in a search engine for a specific list of keywords. It is often very cost-effective to let publishers handle this type of advertising, but if you already run your own advertising in search engines, you should consider how publishers can influence this.

Social media

Social media means that publishers share offers of your products or services to their followers on Facebook, Twitter, Instagram, etc. It can also mean purchased advertising on these platforms. You should specify whether this type of advertising is permitted in your affiliate program.

Email marketing

Some publishers have their own databases with email addresses to individuals who have accepted to frequently receive offers by email. The recipients are usually segmented based on geography or interest. This type of marketing can provide broad reach in a short peroiod of time. If you want to work with this type of publisher, you should consider providing the publishers with ready-made texts to control how your products or services are promoted.

Price comparison

Price comparison sites compare different advertisers' offers with a focus on price. The purpose of these sites is to help the end customer find the best offer and the best price. If you want to work with this type of publisher, you should provide product files (see below) to ensure that the publishers display accurate information.

4. Produce advertising material and product file

Most of the conveyed purchases in an affiliate program are made via text links, but it is still necessary to provide a certain range of image-based ads, so-called banners, for publishers who prefer these. One common recommendation is to produce about ten ads in the most common formats. The affiliate network you choose can help you with advice on which sizes you should choose. If you are not able to produce the ads yourself, the affiliate network can recommend suitable suppliers.

For retailers, it is important to provide a product file, i.e. a text file that contains product information from your e-commerce system. The product file enables publishers to find information and links to your products. It gives them access to product information and prices that they can filter and display in many different ways. Product files are commonly used by price comparison sites, product catalogs, etc. Many e-commerce systems have built-in functions for exporting product files. The affiliate network periodically imports the product file and uses its system to make the data available to publishers.

5. Implement tracking

Since affiliate marketing is performance based, it is necessary to track the sales that publishers convey to your site. This is managed via the affiliate network and works with the help of a tracking code from the affiliate network which is placed on the receipt page in your web shop. The code is normally only one or a few lines long and runs each time a purchase is made and the receipt page is displayed.

When an individual clicks on an ad or link from your affiliate program, the affiliate network puts a cookie in the browser of the individual in question. When the same individual carries out a purchase in your web shop and the tracking code on the receipt page runs, the affiliate network can identify that the individual has previously clicked on an ad or link from your affiliate program. The affiliate network then pays the commission to the publisher and sends you a total invoice at the end of each month.

6. Arrange a recruitment page

An important way to recruit publishers to an affiliate program is through your own website. By placing a special landing page on your website with the topic "make money with us" you can catch visitors who already like your products and are willing to recommend them to others. In order to reduce your workload, the recruitment page should refer directly to the affiliate network. Many affiliate networks can create registration pages with logo and customized content for individual advertisers, which means that the visitor recognizes the affiliate network's website.

7. Launch and inform

Affiliate marketing is long-term marketing. It often takes between one and six months for an affiliate program to reach normal volume, as it often takes time for publishers to connect to the program and implement links and ads on their websites. The affiliate network has a number of tools at its disposal to alert affiliates to your affiliate program:

  • information on the publishers' dashboard
  • posts on the affiliate network's Facebook / blog
  • email to publishers operating in the same niche as the affiliate program
  • newsletter to all publishers in the network
    manual recruitment of important affiliates

If you want to know more about how your company can use affiliate marketing, please contact anna.hjortaas@adtraction.com.

About Adtraction

Adtraction was founded in 2007. With offices in Stockholm, Helsinki, Oslo, Warsaw, Copenhagen, Madrid, Amsterdam, Berlin and London it is one of the largest affiliate networks in the Nordic region. We work on a performance-based compensation structure, completely without fixed fees. Transparency and superior customer service are our main strengths.

Companies that advertise through us include Åhlens, & Other Stories, Lendo, Bynk, Cervera and KICKS.

www.adtraction.com

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