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As competition in the affiliate marketplace intensifies so advertisers should be optimising their campaigns wherever they can.
An obvious, yet often overlooked, place to start is click to sale conversion rate.
This is one of the key factors assessed by affiliate publishers when considering whether a programme is worth promoting.
It is all too easy for affiliate managers to recommend an increase in commission to boost affiliate activity. While not discounting this as a valid strategy, a more cost effective approach in the long term is to improve onsite conversion rates.
Where there is little differentiation between product offering, one metric affiliates will base their coverage of a campaign on is the Earnings per Click (EPC) they experience.
The example below investigates the impact on an affiliates EPC when two factors change, firstly an increase in commission, and then an improvement in the conversion rate.
Looking at a merchant that converts at 2% with a commission of £25 per sale, an affiliate could expect to earn an EPC of 50p:
1,000 clicks = 20 sales @ £25 = £500 commission = 50p EPC.
If the commission is increased by £5 they can expect to earn 60p EPC:
1,000 clicks = 20 sales @ £30 = £600 commission = 60p EPC.
If the conversion rate is improved by 1% affiliates could expect to earn an EPC of 75p at the original £25 commission:
1000 clicks = 30 sales @ £25 = £750 commission = 75p EPC.
With an improvement in the onsite conversion, affiliates will be able to earn more commission from the traffic they are driving to an advertiser’s site proving that throwing money at a problem doesn’t necessarily bear fruit.
Different affiliate types will have varying conversion rates depending on the traffic they receive and how pre-qualified that traffic is prior to reaching the advertiser site.
Incentivised traffic (voucher code, loyalty and reward sites) will, by its very nature, boost conversions and therefore EPC.
As a side issue, an EPC figure when presented without context has limited value. Be prepared to offer EPCs according to the type of promotion so when asked by an affiliate asks you what they can expect to earn make sure you’re offering like for like data.
So how can advertisers help to increase the conversion rate?
Share knowledge with affiliates
Affiliates should be seen as an extension of a merchant’s sales team. Arming them with the correct tools will help them convert their traffic to sales.
For example, if there are particular products that are converting well, affiliates should be notified to put their promotional efforts behind these. Similarly, if there is specific ad copy that is performing well as part of a PPC campaign, make affiliates aware of these so they are able to tweak their own promotion.
Work closely with individual affiliates
Affiliates should be looked upon as individuals. Affiliate categorisation is difficult as no two affiliates are the same and there can be a lot of crossover with regards to how they drive traffic to their site.
By working closely with key publishers they can essentially become brand partners. By understanding how they drive their traffic and the type of users they attract, promotions can be effectively tweaked in order to improve conversion rates.
This is easier than it sounds and requires long term investment to understand how an individual affiliate’s traffic behaves, but it is a logical step for brands with mature programmes.
Affiliate specific landing pages
Advertisers design landing pages to convert traffic. If this conversion happens online or offline they receive the sale regardless. They will more often than not include a phone number, allowing the customer to pick up the phone if they need assistance before completing their purchase.
The provision of a phone number can often increase conversions as customers can be advised by a sales representative if any problems are experienced. However, affiliates require the transaction to convert online.
A telephone number is seen as leakage and likely to affect the conversion rate seen through the affiliate channel. It is possible to remove the phone number completely for all affiliate traffic, or for a merchant to set up a call tracking solution allowing affiliates to be rewarded for any sales that have arisen from traffic they have driven but have converted offline.
Sunshine.co.uk has actually taken this a step further by not including a telephone number on their site but offering an explanation why this is not included: it helps to keep costs down to ensure they are able to offer the most competitive prices.
Alternatively, investigate phone tracking solutions whereby you reward affiliates (typically with a lower CPA) a sale that starts online but completes offline. This is a hugely underused but entirely workable solution.
One step further would be for advertisers to collaborate with individual brand partners to develop bespoke, co-branded landing pages. This develops trust for the user, confident in the knowledge the site they have clicked through from has a relationship with the merchant they are purchasing from.
Encourage users to purchase online (online discount)
In order to convert users online there needs to be a reason to purchase online. Online discounts can be one way to achieve this. This can typically be seen in insurance markets where there is x% off if you take out a policy online, or 12 months for the price of ten.
Another reason people shop on line is convenience. A reliable delivery service at no extra cost is an added incentive for consumers to purchase online rather than heading to the high street.
Combined with an easy returns process, this can increase the propensity to purchase online. In fact research indicates consumers prefer free delivery to money off vouchers.
Smooth transaction process
When affiliates have spent time, effort and money generating visitors to a merchant site, they want them to transact. The transaction process should be as smooth as possible, minimising the number of clicks required to check out.
By providing deep links to relevant product pages or a datafeed containing these deeplinks, affiliates can send their visitors straight through to the product they are interested in. Similarly dynamic searchable banners, often seen in the travel sector, allow a visitor to conduct their search on the affiliate site prior to clicking through to the merchant.
All that remains to be done is to complete the transaction – the purchasing decision has been made on the affiliate site, resulting in further qualified traffic for the advertiser and an increase in conversions.
One area where it has been extremely important to improve conversion rates is across the mobile sector. With the rise of mobile phone resellers offering free gifts when taking out a contract, it was vital that the mobile networks were able to convert visitors coming direct to their sites.
There has been an increase in conversions year on year across the sector and this has also shown an increase in ROI. The cost of recruiting customers through the affiliate channel has decreased as conversion rates have been improved.
A strong conversion rate is an extremely important factor in the performance of an affiliate campaign. If merchants are able to convert a high proportion of their affiliate traffic it is a win win situation. Affiliates revenue will increase while the cost per acquisition for advertisers will decrease.
If a website does not convert, an affiliate campaign is unlikely to provide the answer. Affiliates will not want to drive traffic to a website that is unable to convert those visitors to sales and will instead opt to promote a competitor that does.