Small Affiliates Make You (More) Money

78 thoughts on “Small Affiliates Make You (More) Money”

  1. The problem hasn’t been affiliate managers ignoring small affiliates. Nor has appreciation for this concept been the reason why it’s not practiced (Linkshare has screamed this from the mountain tops for YEARS now).

    What is it, oh All-Knowing Molander?

    It is a simple fact that David Delisle and I have built a business around recently: That is, affiliate managers do not have the proper tools nor skills to recruit, successfully, en mass.

    No software, no best practices, no Guru. We see social media (i.e. blogs) as a major opportunity for affiliate managers — yet one that will remain untapped UNLESS they are given the proper tool set. So does my friend Sean Crotty over at Art.com/Allposters.com.

  2. Hi, Shawn…
    I’m glad you asked. I stand on two things:

    1) The commonly known fact that most affiliate programs today operate on a “focus on the 2” (the 98/2 rule) strategy (hence, Sam’s blog entry explaining the limitations, opportunity cost, etc. when ignoring “Long Tail affiliate economics”). Accepting this, we also must accept the realities that go along with it:

    affiliate managers have chosen this tactic not out of lack of inspiration (understanding Long Tail concepts) or motivation (their affiliate network constantly harping on the “core producers” concept) but out of necessity (they are not given a choice considering the tool set they are (or in this case are NOT) given.

    2) Hard data that our company gathered among affiliate managers via a survey… as part of our business plan (that confirms the theory expressed in 1 above). We accomplished this using various methods (including face to face, email and telephone surveys). Our sample included 100 affiliate managers and 30 CPA networks and/or outsourced program management firms.

    Thanks for asking and thanks, Sam, for starting the discussion. Let me talk w/ my partner David and see if he’ll let me talk more and to what degree (reveal more data).

  3. > The commonly known fact that most affiliate programs today operate on a “focus on the 2″ (the 98/2 rule) strategy

    I don’t agree that this is a fact at all. On the contrary, I’d say it’s conjecture.

    Personally, I’ve been on the front lines as an affiliate manager for ten years with a focus on the smaller guys.

    One very recent example of this was that I made an offer to all Payless.com affiliates over the past several months that if they made $100 in sales in any given month, they would get a free pass to Affiliate Summit.

    And unless I’m reading things incorrectly, Sam is saying CJ is going after the long tail, and it’s the CPA networks that ignore it.

    Good luck selling your tool set.

  4. I dunno, Is there really a giant long tail of non super affiliates? I guess it’s in your definition of an affiliate. I think most small affiliates are affiliates by accident, no? Making them just regular webmasters/bloggers/writers who graduate to AM. That’s how most everyone got started, and still does.

    I guess what I’m asking is Sam, what exactly has CJ done or other networks done to make it easier for the long tail to get in the game? I still think there’s a huge learning curve, and it’s very, very intimidating for “regular people”. Maybe I’m missing something? I say that non-aggressively, truly.

  5. Good question, Jim…

    “I guess it’s in your definition of an affiliate.”

    Exactly.

    I’d argue there is no definition and that term is meaningless. We’re all affiliates now. With the ease of sharing info, brands, sites, links (ugh), programs, gossip etc on social media sites, the common defintion of “affiliate” has been rendered useless.

    CJ might or might not have realized this, but they are in a position to capitalize on the “long tail” b/c of the number of their ads and the vast inventory of their smaller affiliates.

    I’d say the first network that drops the pretensions of being an “affiliate network” or a “cpa network” and just allow people to monetize their sites, blogs, twitters, etc will make a very big impact. Google realizes this. Hence their play with Google Pages within the Checkout platform. Hell, you don’t even need a site anymore according to them (and that’s completely true).

    Shawn’s Payless program is an excellent example of expanding the scope of things. But let’s expand it farther and start targeting people who don’t call themselves affiliates or even know what affiliate marketing or CPA or rev-share really are and really don’t care. That’s where the money is.

    Right on, Jeff (but don’t stop at blogs… Jim is taking care of that area nicely!)…

    “No software, no best practices, no Guru. We see social media (i.e. blogs) as a major opportunity for affiliate managers — yet one that will remain untapped UNLESS they are given the proper tool set.”

    But don’t just give them tools. Tools are great, but you have to know what to do with them. Handing a powersaw to a 12 year old can be dangerous.

    However Jeff… you have the situation flip-flopped here…

    “affiliate managers have chosen this tactic not out of lack of inspiration (understanding Long Tail concepts) or motivation (their affiliate network constantly harping on the “core producers” concept) but out of necessity (they are not given a choice considering the tool set they are (or in this case are NOT) given.”

    It’s not affiliate managers and affiliate networks who don’t “have the tools for choice.” It’s the CPA networks who are knee deep in 2003 concepts of pure performance and are constantly trying to replicate what Azoogle did instead of doing anything innovative. Shawn’s right on that point.

    Great stuff, guys. Thanks for the convo.

    I’m going to start a network.

  6. Yeah, you’re right and I’ve been meaning to stop calling BlogKits a network. We just help bloggers make money, period. The rules ARE changing, we’ll have a huge announcement about BlogKit’s new methodology coming after the summit. We’re going to shake it up for the long tail for sure.

  7. Shawn… Your arguments against most of what I see, and present as well known fact, over the years is consistent: “That’s not how I do it.”

    This is not something that I accept as evidence that the market isn’t as I say it is. There are countless affiliate programs, blog articles, comments made at conferences, etc. etc. that prove out the state of the market: largely ignoring the masses of would-be affiliates who are smaller (in terms of referral and action/sale traffic). Yes, there are exceptions (Buy.com perhaps… certainly Overstock.com and Backcountry.com… Payless.com? Okay!) but a majority of advertisers are not staffing beyond ONE person to run their affiliate program; further (based on our research) they’re providing affiliate managers with Microsoft Office and affiliate network as their communications/recruitment tool set. I’m confident (then again perhaps not!) that you find CJ et al’s communications tools to be laughably sub par as the majority of advertisers I talk to do.

    In summary, and with all due respect, I would be more impressed with your claim of conjecture if you didn’t argue against it with (to paraphrase) “this is how I practice affiliate marketing… so this is how everyone does it.” Candidly I think it’s ludicrous to suggest that practices within a half dozen or so affiliate programs that you operate have the power of representing “the state of the market.”

    I don’t think the hundreds of other affiliate managers operate at your level or expertise. Or do they?

    It’s not affiliate managers and affiliate networks who don’t “have the tools for choice.” It’s the CPA networks who are knee deep in 2003 concepts of pure performance and are constantly trying to replicate what Azoogle did instead of doing anything innovative. Shawn’s right on that point.

    To be clear, yes… I see the heart of your point here Sam and, yes Shawn, the that seems to be his thrust. Nonetheless, here’s a list of people who don’t have a recruitment/management communications toolset appropriate for a “Long Tail affiliate program” environment according to our research (take it or leave it!):

    – affiliate managers
    – affiliate networks (CJ et al)
    – CPA networks

    Sam, do you find (in your experience) that the first two groups have what they consider to be adequate tools?

    To your point Sam (and sorry for not focusing on this to begin with), I’m beginning (lately) to enter into discussions with operations managers at many (I’ve targeted all of them) of the CPA networks. Each and every one I’ve contacted so far (a dozen or so) has expressed a degree of interest and admitted — their current tool set does not offer the power or flexibility that is required to attack the market opportunity with a strong degree of scale.

    As for offering us luck, I’d like to say that I appreciate that… but this would suggest that I believe luck wins over hard work and properly reading the market 😉

  8. That’s b/c in my experience (which speaks for itself) in the CPA Network world, I can safely make the statement that CPA networks don’t really care about the long tail of online marketing.

    Sure, there are some forward thinking execs out there, but you have to understand the nature of these networks, how they developed, why they developed and how they are making money to understand that it doesn’t really matter to them (and in all honesty, it really shouldn’t if they’re only concerned about making the same amount of money every month in order to throw killer parties at the next AdTech) if there is a long tail in all of this. In a CPA network model, it’s not profitable to go after the long tail.

    The networks are set up to monetize quick, trackable and consistent performance. In most cases these networks are off shoots of an original email or large publishing company and the infrastructure is not there to move towards further down the X axis.

    That will change soon (I’d say Q2) because of Google 🙂 🙂 🙂

  9. Sam…
    Fully agree and respect your position. I don’t think anyone out there (in my circle at least) knows the CPA market better than you do (the players, motivations, economic indicators and trends, etc.). We might be barkin’ up the wrong tree (wasting my time) but I’ve got a hunch that a few of the dozens of CPA networks want to actually explore building a long-term business (and that can only mean one thing — accessing “The Long Tail” of affiliate marketing).

    I’m even more confident that there will be more Payless.com’s out there this year; however, I am a firm believer that this isn’t just going to “happen” for them. They need to be able to scale their most precious resource — their affiliate manager’s time. Currently, I don’t see how they’re going to do it — short of hiring Shawn Collins consulting.

    BTW, Shawn, the fact that you’re offering a promotion (and working hard to promote it) to anyone who would like become a Payless affiliate (or who is an affiliate) demonstrates that you, yourself, don’t have a solution beyond a “free pass” carrot offered to the masses. Mind you, that’s a valuable, attractive carrot you offered but it’s not a “trench level” strategy to seek out, negotiate with and get links live with more “Long Tail” (smaller traffic) affiliates… .not IMO at least. It’s rather mass marketing oriented — takes no work beyond floating the promotion out there. Again, not to take away from it. It’s a great idea and I think all advertisers should be doing promos like that but I believe that in 2007 advertisers will expect more in terms of OPM’s hustling for them.

    If you’re interested in hearing about the communications/recruitment solution that your competitors seem so interested in (and are investing in, actually) just give me a call 😉

  10. Here’s a challenge…

    Let’s all three (Jeff, Shawn and Moi) do a SkypeCast/Phone call and record a conversation about where and how we see this sort of thing being implemented in both the CPA Networks and affiliate networks.

    Package it up and slap a price tag on it if you’d like.

    I’d think people would gratefully pay attention and money to something like that.

    Comment here or shoot me an email if interested. Let’s do it while the iron is still hot.

  11. How DARE you suggest selling ourselves! Long live the freedom of information on the Web! 😉

    My time is short this week with heavy travel and meetings Mon-Wed (filled each day!) but I’m totally up for setting aside 30 minutes (I can’t spare more, sorry) on Friday the 19th or anytime beyond (realizing that we’re up against the Summit). I’ll record it or someone else can. Either way but I hesitate to use Blogtalkradio. No offense but the audio levels are kinda spotty (not consistent).

  12. How about 30 minutes today/tonight?

    I’d rather just put the recording out there for everyone to enjoy and learn from… but that’s why I’m a “broke hippy” as Porter would say.

  13. > Shawn… Your arguments against most of what I see, and present as well known fact, over the years is consistent: “That’s not how I do it.”

    I simply pointed out my reality in the trenches vs how you theorize things to be.

    I may be going out on a limb here, but I think I am more in touch with the affiliate manager community than you.

    In addition to running affiliatemanager.net since 2001, I’ve also been collecting data from affiliate managers annually since 2000 – the same year I started up the New York Affiliate Manager Coalition.

    Affiliate Summit is in it’s 4th year – target paying audience: affiliate managers. I receive questions ongoing at my Ask Shawn Collins site from affiliate managers, and have been running the Affiliate Tip directory for a few years (the people submitting the listings – affiliate managers).

    I wrote a book about managing affiliate programs back in 2000. Thumb through it and you’ll see that there is lots on activating and working with the smaller affiliates. Thousands of affiliate managers have that book in their library and it continues to sell steadily.

    I speak from years of discussions and data collection from affiliate managers. They come from companies ranging from Mom & Pops to Fortune 100’s.

  14. > BTW, Shawn, the fact that you’re offering a promotion (and working hard to promote it) to anyone who would like become a Payless affiliate (or who is an affiliate) demonstrates that you, yourself, don’t have a solution beyond a “free pass” carrot offered to the masses.

    I cited one example of how I engage the smaller players. It happened to be the most recent of my ongoing efforts.

    I think this demonstrates nothing beyond the fact that I have the sense to utilize my assets.

  15. I love smaller affiliates, and like teaching them to become big fish. That is how I grew the CafePress affiliate program. And as Jim pointed out, lots of affiliates get motivated “by accident”. They put up a link to something and it makes money… then they say “hey, I should do more of this!” so now our challenge is to get in front of them and get our programs in their blogs and on their sites. And once you find them, training is the key. Sometimes one on one, sometimes by sending them to forums, sometimes by sending them to training sites. Hoping to show more success stories in the coming months… for affiliates AND merchants using the smaller yet powerful affiliates.

  16. Jeff – methinks you sound a bit frustrated as your idea of how things work in affiliate management are not accurate.

    Would you please allude once again to the solution you are selling here?

    It would be tacky to buy an ad to promote it.

  17. Good conversation… wish I wasn’t so late to the conversation.

    I disagree that affiliate managers don’t have the tools… but that is kinda a side point. For the most part, to recruit on the “long tail” , the tool needed 1st 2nd and 3rd is patience and time, neither of which can be purchased.

    That doesn’t mean that a Contact Management tool wouldn’t be handy in this industry, I just don’t think it is the big issue on this specific question.

    You must have patience, often times showing a prospective affiliate by hand how to place a product link or even begin the process of being an affiliate. To be honest, this amount of patience is rare but rewarded when shown.

    As a general rule – I would agree affiliate networks – and also “OPMs” have tools that help with this a little more than CPA networks … things such as product placement tools, pre-built creatives/pages, etc…

    But mostly, if you are an affiliate manager who wants to focus on the long-tail or small affiliate – you simply must have the time and patience – and the freedom from your company to commit to a long term (read: it takes time) strategy.

  18. You must have patience, often times showing a prospective affiliate by hand how to place a product link or even begin the process of being an affiliate. To be honest, this amount of patience is rare but rewarded when shown.

    We’ve had this discussion before, Brian and with all due respect… I think affiliate marketing NEEDS to move past this stage if it is to be taken seriously. IMO, this isn’t about “training Webmasters” and any marketer who really believes that they’re well served by a marketing effort that trains people who are starting with ZERO assets “by hand” is seriously misguided. This is not the future IMO.

    1) It affiliate marketing shouldn’t be brain surgery — technically (see http://www.thisnext.com)

    2) Affiliates, by nature, should have something inherently valuable that the advertiser is tapping into — otherwise they’re a time drain when it comes to “by hand” training

    Ask yourself this question, marketers: “What business are you in? Selling or training?”

    If you’re in the business to sell then what are you doing investing cash in training “Webmasters?”

    Sam… comment on 1 and 2?

  19. I’ll comment on both 1 and 2 with this:

    Right, but you’re flip-flopped. You’ve got the right idea but the roles reversed. If we’re going to stick with the term “affiliate” (which I argue is a meaningless term at this point besides just giving us all something to blog and converse about), we have to reverse your paradigm to acknowledge reality.

    Affiliates shouldn’t have to keep educating affiliate managers, merchants and networks about the nature of the business.

    Business always works best when it works from the bottom up (whether it’s SEO, religion or sociology) and when you make the kinds of declarations you do above, you’re constructing a false reality that is easily deconstructed based on reality.

    So, my retort would be… “right, but you need to reverse your paradigm.”

  20. I think I am confused maybe by coming in here late – but from my reading above I thought that you were indicating that recruiting small affiliates was something that you saw as productive, and thus were generating tools for, etc…

    I was agreeing that small affiliates are extremely rewarding – though the number one tool needed is patience.

    I disagree with you that affiliate marketing needs to move past working with individual webmasters and helping them grow into productive affiliates…from my experience that is the most rewarding part of the industry both financially and from a learning perspective.

    I do agree with you on point 2 that in order to receive that hand-on training – the prostpective affiliate most likely has something that a merchant wants… whether that is relevant traffic, eyeballs, or sometimes just simply a desire to work with that merchant – maybe they were a happy consumer who wants to learn how to promote products that he/she likes, etc…

  21. Sam:
    Well, as usual we agree; however, that’s what happens (my paradigm isn’t yours) when you build a company in the here-and-now! 🙂

    Affiliates shouldn’t have to keep educating affiliate managers, merchants and networks about the nature of the business.

    I cannot resist. This is really well said. I noticed nobody commented on it but this is the world we live in. Any affiliate that has moved the needle has done so without the assistance of a marketing manager.

    While I appreciate your thoughts and their spirit, Brian, I think that this industry is filled with patience — that extends into complacency which is forced by managers not having adequate tools. When is the last time you’ve heard an affiliate complain about a manager not investing enough time in educating them? I read all the affiliate boards and I rarely see it. Most of what I see is reflective of Sam’s statement above (affiliates educating merchants).

    I posit that the goals are always re-adjusted among your clients, Brian. They start with lofty goals of thousands of affiliates and always settle for dozens. Why? You would suggest lack of patience. I would suggest lack of ability — it’s unrealistic to have the thousands given the tools (lack of) and demands (hand-holding).

    Let’s focus on finance for a moment. I’m curious how you, on paper, justify a marketer paying an (let’s assume educated) affiliate manager $50K per year (an example) to educate/transfer knowledge to affiliates. What’s the math look like in broad terms? What are the ROI guidelines in terms of X hours invested on average per affiliate must yield $X in productivity? Also, what’s the threshold for releasing an affiliate who isn’t learning fast enough to earn their keep?

    Or do you suggest affiliate managers/merchants play it by ear?

    I’m not suggesting that “collaboration is bad”, Brian. I’m suggesting that “helping hands have limits.” Rather, they should. It seems that Mr. Bush understands this clearly (now) with regard to his Iraq policy. Having a never-ending approach (“until the job is done”) doesn’t work.

    In my world, these are real considerations (the questions I ask above). Perhaps not in yours, Brian, and I respect that but savvy small and large business owners should, at least, ask themselves such questions and create such rules for themselves if they’re to expect any level of wider/budgetary ROI on an affiliate program. Thanks for your thoughts.

  22. When is the last time you’ve heard an affiliate complain about a manager not investing enough time in educating them? I read all the affiliate boards and I rarely see it. Most of what I see is reflective of Sam’s statement above (affiliates educating merchants). (This is a quote from Jeff…not sure how to quote here)

    Short answer – about 2 minutes ago. Long answer – read on… 🙂

    Again, I think I am just mis-understanding who we are talking about… The affiliates on message boards and those utilizing affiliate marketing as a full time career often times do not need the assistance… I thought we were talking about the true long-tail – which for the most part would be people who weren’t in affiliate marketing to begin with…

    Lets take bloggers for example….

    If you had a blog – about “Cabernets of California” for example. (Yum) … Blogging is extraordinarily easy these days… requiring zero HTML programming or any other traditional webmaster skill. If you were a merchant who sold California Cabernets… and that blog had a decent readership… isn’t that a place for affiliate marketing ??? I would argue yes – and that affiliate will need assistance…and likely lots of it. You all are all very high on blogs, and talk about them as the future of publishers/affiliates…etc… and I agree… but in order to take advantage of that as an affiliate manager… you are going to need to teach them how to do not only tech things like placing HTML or widgets or whatever… but also merchandising… The affiliate manager must help the blogger to optimize the type of ad/product that matches the bloggers demographic… Bloggers write! Marketers market. Without the marketers assistance the blogger ends up with some CPC ad on their blog and wonders why their click thru rate is so low. I would argue that you can’t be “high” on bloggers being the future of aff. marketing without truly realizing what it will take to optimize and merchandise with them.

    To me – that is what targetting “small” affiliates, or long-tail affiliates is all about – and it takes time and patience.

    I think you and I are just talking about two different kinds of affiliates… because I hear it all the time (affiliates looking for more education and help from merchants). All the time. If you read message boards… look at the positive response to merchants who post educational or content/help… Don’t just look for people asking specific questions (affiliates)… but also take a look at merchants who proactively offer their help, and see what the positive result is just from professional affiliates…(it is even greater from those who aren’t full-timers, etc…)

    Obviously, your points on “limits” and finance are good ones… there definitely needs to be a balance, and there are certainly webmasters who may not be advanced enough to receive the time. I will say, however, that I have personally worked with several affiliates who did not know, at the time, how to even bold or italicize text in HTML… and who now generate significant income (yes, full time) for themselves and the companies that they work with. My bet is that most affiliate managers out there who have been doing this a long time will have a similar story.

    I am sure that I’ll see you both in Las Vegas – but I would be interested in holding a conversation with you on this because I think the combination of what you are seeing, and what I am seeing could give us both some insight… but it is often difficult to convey over the keyboard… looking forward to chatting… 🙂

  23. Brian is dead on about the bloggers, heck, that’s our business model at BlogKits. What I want to point out that I’m not sure anyone is talking about is that not everyone wants to be a marketer, or wants to make money. They don’t.

    The vast majority of bloggers don’t start their blogs to make money, or even really care about making money. Heck, when i started my first blog in Aug 2001 I didn’t think I wanted to make money, I just wanted to write and have an outlet. Only later did I say to myself “you know, I could combine my online marketing skills with this and make something happen”. Even then, it worked because I had the drive and extra information. I was an exception, not the rule.

    99.5% of 63 million bloggers aren’t marketers, or could care less about learning how to be.

    I could go on and on… but you can hear all of this information my Affiliate Summit presentation on Tuesday at 11:30 in Vegas baby.

  24. I agree with you Jim – and that is where patience is key… often times a marketer might identify a blog that would be a great fit for products, etc… That marketer must somehow make contact with the blogger and understand that the blogger might not be quite ready for “marketing help”, so to speak… but if the affiliate manager handles the situation properly and with respect for the blogger – he/she might end up getting a call down the road asking for assistance.

    Long-tail is called long-tail for a reason. It takes time.

  25. I know these comments have touched on a number of subjects, but the issue of bloggers becoming affiliates has another facet that hasn’t been addressed — there’s an issue of authenticity involved when a blogger starts mixing advertising with posts. Putting a strip of ads down the side of the page seems to be ok, but as soon as there are official relationships between a blogger’s post and a product or site, people start freaking out:
    http://www.techcrunch.com/2007/01/15/another-payperpost-virus/

    I would also agree that there needs to be a better toolset/educational program for newbie affiliates that allows affiliate managers the ability to help a new affiliate without wasting time teaching them how to code html. I think affiliateclassroom.com is a good attempt, though I don’t think affiliates like to pay for things they think they can get for free; I think they need to consider a second tier relationship with affiliates they train and push to certain programs. As far as tools are concerned, I’ve said several times before that until affiliate marketing is as easy as AdSense, there are going to be issues with bloggers adopting the model. Blogkits is one effort to tackle that problem.

    I still think a day is coming when their will be a simple cross-platform way for anyone anywhere to promote a product or service and get compensated without the need for a lot of mess in the middle. Before that can happen more of the public needs to demand it, of course. This brings me back to the authenticity issue — bloggers would seem to be the first step in this on-demand-affiliate-marketing process because they have an audience that they preach to (and occasionally push product to), and should get compensated for that without having to worry about losing the trust of their audience. Will we ever completely trust anyone who we know is being compensated for their referral?

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