Thread: Advantages to a Merchant? What's Your Pitch?

If you were selling the concept of affiliate marketing to a merchant, what would you say to persuade them to allocate more of their budget towards affiliate marketing and less towards other conventional methods....

By the same token what are the advantages and dis-advantages of affiliate marketing to a merchant.

Reason: To encourage new prospects (merchants)... and existing ones...to dedicate more resources.

What's Your Pitch?

Obvious one here, only having to pay for sales made. I think affiliate marketing is the only form of marketing where you can do this.

Massive exposure, there has to be thousands, even millions of affiliate sites out there. Better to advertise on all these than put your eggs in one basket by advertising somewhere like Yahoo etc.

Better quality traffic, affiliates work hard to target traffic to merchants to improve their sales and commision. Links in with first point, becasue were paid for sales we work hard to make sales. Other forms of advertising cant guarentee this at all.

Im sure there are many more, but im not one for long posts so im sure someone else will have a go

Tempt them with the notion of 10,000 SEO's working for Them.

Advantages:

Only Paying on results.
Increasing awareness of the company.

Disadvantages:
To begin with the monthly network maintenance charge may be more than what is made through affiliate sales.

Can't think of any others at the moment.

Andrew

<blockquote><strong><em>Quote:</em></strong><hr>Obvious one here, only having to pay for sales made[/quote]

This is the greatest lie of all affiliate marketing networks, you only pay based on the sales to affiliates but as the post above me points out their are the extortionate costs - set up fee, high surcharge on those commissions and large monthly administration costs.

To be fair to Affiliate Window they are pretty flexible and are fairly reasonable with their merchant costs.

So my pitch is, yes, this is an opportunity for you to increase the volume of your online business without taking any risks, because you only pay when a sale is made and as long as the commission you pay fits in comfortably with your margins, then you cannot lose.

What's more they are paying to acquire new customers and those customers will come back with many concepts.

Then I say... if you sign up with Affiliate Future there will be <strong>no set up fee</strong> and we have a very low monthly charge and we charge less surcharge then every other network (except Buy.at who I think are also 20%).

If it works with us and the ecommerce site wants to join another network as well we will give them an honest opinion on which one to join based on what they are trying to achieve.

People think because we are so cheap we do not perform, quite the opposite. We have some excellent affiliates and we have some merchants doing very, very, well.

In fact we have a new merchant that has the ground running in a big way, they have a <strong>ludicrous conversion rate</strong> but I am not saying who they are here as one of the networks keeps targetting our decent merchants. Those that know me can email me <a href="mailto:luke@affiliatefutur...ture.co.uk</a>

Er, wouldn't the incredibly low average cost of customer acquisition be of interest compared to standard media acquisition costs? And especially when combined with little if any upfront costs?

best
Jaja

my 'pitch' is quite simple, you have the opportuny to work with a number of leading partners in the UK and Internationally. We refer to networks as the technical means to manage these partners more effectively. We emphasise that these partners will drive quality customers to your website. There should be little mention of cost except that it will deliver a higher ROI than some online marketing activity e.g CPM deals and below the line activity. The sell is that you pay on results so there is a lower risk associated. Partners/Affiliates are not here to be expolited but to be appreciated for the long term value that they drive. Therefore companies should realise this value over a long term and set realistic deal structures including hybrid deals.

Luke, you talk about set up costs etc etc but the CPS will still be lower than other media!

Issues from a merchant perspective - for leading brands it is always about controlling their brand across a potentially large number of partners.

Helen

Affiliate marketing minimises the risk factor for online advertising, in a world propelled by CPM and CPC
Some Advertising media departments pay many thousands of pounds in gathering information about which medium/vehicles are the most efficient/effective for their campaign. Yet the results they produce can be at best very misleading. Mr A.Dvert tells me his/her shop xyz has 4mill Uvs per month... out of that 2.3 mill a month goes to through the shopping section. Should I throw money at this on a cpc or cpm basis? It's scary, but I know some merchants that do this, and then scratch their heads wondering why they are out of pocket.

Affiliates know their business, they know what kind of traffic they get, more importantly they know that they can target their traffic to their chose merchant, producing in some cases cracking conversion. And I know for a fact, that some affiliates get a much better deal on a rev share then they would have done if they had offered tenancy.

With your affiliate program your ad campaigns become firstly almost risk free; secondly, you can gauge the success of your campaigns by looking at your statistics in your tracking software. Pay per performance is now the only cost effective way of marketing. With the surface of pay per ad words re: search engines CPC and CPM, the lane of cost-effective advertising is narrowing, and merchants are being forced to look at their advertising projects very carefully. The push pull factor between "be seen on us" and "where do I need to be seen" is an economic struggle, one side needing advertising revenue to survive, and the other needing to be seen but at an economic disadvantage.
Most big Advertising companies are cowboys, sharks no wonder they hate affiliate marketing, they would be out of business within a week if they had to change to a rev share/pay on performance model.

One last point, affiliate marketing is about forging long term partnerships, its about the merchant and the affiliate striking up a relationship that will lead to the doors of negotiation being wide open for future deals. Fair commission and communication is better that a cold clinical sales person who will sell you their grandmother for the commission they receive in selling you a 125x125 banner space on some obscure inappropriate website that also pay google, overture and espotting to send them clicks to boost their stats to sell you space!


Jess

<em><strong>Most big Advertising companies are cowboys, sharks no wonder they hate affiliate marketing, they would be out of business within a week if they had to change to a rev share/pay on performance model.</strong></em>

No wonder we like Jess.. no beating about the bush.. and every word a true one

further to jess post i would like to make it clear a number of media / advertising agencies work on a time and material basis not one which is reliant on making the % of deals with large media partners. I hope that the partners on these forums do not consider wheel/myself to be sharks - if you do please feel free to call me!.

helen

Just to add something, when I am prospecting new merchants, I often look for SME's that are advertising offline or are paying extortionate prices on PPC advertising.

But there is always those 33% of marketing managers/MDs that think this all too good to be true, that affiliate marketing is a dodgy MLM type scheme and this is another online scam.

But it really does appear to good to be true, people hear of the concept and they think, there must be a catch somewhere...!

One of our new merchants is doing so well that he plans to transfer over £30k a month offline advertising to affiliate marketing in the coming months, he sees that the leads he gets are of a good quality and that the return on investment is much much better.

On a final note another great thing about affiliate marketing is that it rewards those ecommerce sites that are the most attractive to the consumer. Because they are attractive they sell more and because they sell more, more affiliates promote them and therefore more consumers get the pleasure of using their services.

However, I would have thought that while the really big sites can fill their sites with good CPM And CPC deals from these large media agencies they are not going to carry CPA advertising. Just as some of the affiliates on this board are going to carry espotting links instead of affiliate marketing ones.

Just MHO!

<blockquote><strong><em>Quote:</em></strong><hr>Luke, you talk about set up costs etc etc but the CPS will still be lower than other media![/quote]

It's not that clear cut Helen in my opinion. It depends on the product/site, what if an ecommerce company is earning affiliates an average of 30p a click, when they can get go out and buy the traffic themselves at 25p a click? Plus add 9p for the networks surcharge. If this wasn't true then how do affiliates make thousands on pay per clicking merchants?

Also, for some ecommerce companies £2k to £3k set up charge and £300 to £400 a month in admin charges plus 30% surcharge on commissions does mean they have to sell a hell of a lot of shoes/cds/cameras to make a ROI.

I think we are all glad google adwords, overture and espotting do not charge a massive set up charge, we would all have a fit!

In Germany the affiliate marketing networks do not charge a monthly admin fee or set up fee... We're the closest to it :smokin:

<blockquote><strong><em>Quote:</em></strong><hr>It's not that clear cut Helen in my opinion. It depends on the product/site, what if an ecommerce company is earning affiliates an average of 30p a click, when they can get go out and buy the traffic themselves at 25p a click?[/quote]

Because every click that they pay on PPC may not result in a lead sale etc. It may be that every 6th click produces the lead or sale for them meaning that it has infact cost then £1.50.

Cheers
Wardy

Wardy

What I think Luke was saying that a merchant is paying different rates per click to affiliates and CPC engines.

There is either inherent value in paying more CPC to affiliates than Overture etc OR merchants are incapable, unwilling or uneducated to work out the return and hence just follow what their competitors are doing?


Lee