tl;dr – Affiliate paid placements can be lucrative if timing, costs, and offers are appropriately leveraged.
· Issue 33 · January 2016
Are Affiliate Paid Placements
Worth the Cash?
by Stephanie Harris This is a good method to “pre-test” whether or not buying a placement with that affiliate would be lucrative.
Flat bounty placements will often give you the biggest re-
ffiliate program management is a time-intensive
turn. This is in line with the “more risk, more reward” model.
process that requires constant recruitment, opti-
These are often leveraged during the holiday season to help
mization, and maintenance of the program. For a
stand out from the competitors, push great deals, or get in a
program to be well managed, an affiliate manager must have
coveted “Buyer’s Guide”. In our agency experience, the highest
a solid sense of prioritization and know what will work, what
cost placements have proven to generate the most revenue.
might work, and what won’t work. When it comes to affiliate placements, is it worth the time
spent on research and negotiations, and ultimately, the cash?
While the burden of the placement’s success relies heav-
Our data indicates a successful ROI will come down to a few
ily on the affiliate’s influence on their traffic, it’s important for
the merchant to help with the conversion piece of the puzzle. Merchants should be prepared to provide a top-converting,
In a pure, short-term ROI analysis from Q4, the best place-
In most cases, when arranging the placement, the affili-
ments are in October. We see an average 12% cost-to-revenue
ate will request an exclusive offer, semi-exclusive offer, or van-
ratio, with November and December at 14% and 15%, respec-
ity code. These will mean nothing if the offers won’t convert
tively. The cost of placements tends to go up in November and
on the merchant site.
December given consumer spend behavior on the two peak shopping days, Black Friday and Cyber Monday. Therefore, from an ROI perspective, the ratio increases
If the merchant cannot offer one of these, passing to the affiliate a choice from the top three converting banners will ensure an asset that best resonates with the intended audience.
slightly. If a merchant is not retail-focused, Q4 may not be
Like any other marketing initiative, affiliate paid place-
the best time to leverage these pricier placements just for the
ments require testing and reporting. Keep analytics on the
peak shopping exposure.
performance and costs of all of the placements and work to determine the highest value opportunities. Then, budget 80%
toward placements that have previously performed, and 20%
Cost negotiation depends on the appetite for risk. To limit the potential downside, try to negotiate for a temporary
toward new opportunity testing for a fresh, data-driven paid placement strategy.
increase in affiliate commission in return for additional expo-
Regularly re-evaluate the landscape of opportunities and
sure. This allows the merchant to stay within the CPA bound-
how your particular program performs to ensure you’re al-
aries and often doesn’t require additional budget approval.
ways getting the best bang for your paid placement buck.
Stephanie Harris is CEO of Schaaf-PartnerCentric, a premier affiliate program management agency.