Impact

Impact

How Big Can Your Affiliate Program Be?

For years the industry has claimed that affiliates can drive 20-30% of total online revenues for a brand. Practically speaking, for most advertisers it is more like 5%-15% of total online revenues. This can vary greatly based on a website’s total revenues and overall marketing mix. For example, a small retailer doing $1M in monthly revenues, with a limited marketing mix, might realize 30% ($300k) of its sales from affiliates. On the other hand, a large retailer doing $100M a month might only see 10% ($10M) from affiliate. But why can’t a large brand drive 30% or more in affiliate sales too? Is this even possible?

I recently attended Affiliate Summit East in NYC. There were a lot of great speakers and presentations – more than I could attend due to my schedule. Unfortunately, I missed Geno Prussakov’s presentation on Amazon vs. Walmart: Affiliate Marketing Lessons Learned. However, I knew it would be good so I checked out the presentation he published and was pleased to see the stats on the Amazon and Walmart affiliate programs. The first thing that caught my eye was that it has been reported that Amazon derives 40% of their $100B annual sales via their 2 million affiliates. That’s an estimated $40B in sales driven by affiliates. If we estimate that affiliates average 5% on referred sales, that means they are earning $2B in “advertising fees” each year!

So what are Amazon and Walmart’s secrets for affiliate success? How can you leverage their hard work to make your affiliate program more successful? Here are my top 10 takeaways from Geno’s presentation.

 

  • Amazon and Walmart have embraced affiliate marketing. The whole company “gets it” and supports the channel’s success.

  • Both offer volume-based earnings incentives. The more conversions affiliates drive, the more they can earn.

  • They promote their affiliate program on their website. In addition, both offer affiliate program support and information pages.

  • Both make it easy to build deep links (Chrome plugin/Site Stripe) while surfing their websites.

  • Each offers multiple linking options (banners, text, product feeds, widgets, videos).

  • Both leverage APIs allowing developers to build applications on top of their data.

  • Amazon and Walmart each provide mobile opportunities to attract mobile developers.

  • They offer consistent, meaningful, actionable emails and content. This includes published promotional calendars that make it easy for new and existing partners to plan ahead.

  • Both have clear policies on what affiliates can and cannot do (no adware, trademarks, etc.).

  • Giving credit where credit is due, they both employ strategies to pay affiliates for closing sales!

 

You may be doing some — or even all — of these already. But the real secret is to readjust your strategy to have all these tactics in place all of the time. Taking the time to build out an action plan with due dates, owners, and any supporting resources will go a long way to building a stronger, more successful affiliate program. Success doesn’t happen overnight. These two programs have been around for many years earning their successes. So learn from them and borrow their lessons learned.

It’s your turn. What are your key takeaways that could help any affiliate program grow?

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