Although over 81% of merchants use affiliate marketing to attract and engage customers and generate sales, only a few of them realize the importance of proactive affiliate management and communication.
Many merchants end up running their program on autopilot once they’ve set it up. Some merchants mistakenly believe that affiliate networks take care of management as well.
In a thought leadership paper Networks Help Drive Affiliate Marketing Into The Mainstream commissioned by Rakuten Affiliate Network, Forrester Consulting reports, among other things, that advertisers and publishers turn to affiliate networks to help manage their programs.
As we explained on several occasions, including in this post, affiliate networks provide the infrastructure and help merchants and publishers connect but affiliate marketing program management is separate. No matter if you run your affiliate program on a network or in-house, you will still need an affiliate program manager.
At times, their work will be a little easier if you run your program on a network because they receive the data they need instead of having to collect it by themselves and, in certain cases, they will have access to potential affiliates to recruit.
However, affiliate marketing program management means far more than just collecting data and recruiting affiliates, and Geno Prussakov does a great job explaining that in his book, Affiliate Program Management: An Hour a Day.
As Geno underlines, and as any merchant who has tried it long enough can confirm, the set-it-and-forget-it approach does not work in affiliate marketing. You cannot start a great program and expect it to thrive on its own, and you cannot afford to underestimate the importance of active affiliate program management.
Why You Need an Affiliate Marketing Program Manager
Affiliate marketing involves much more than the usual marketing campaign. It is a continuous process that requires establishing and maintaining connections, monitoring and improving techniques, anticipating market trends, and adjusting to them.
To better understand why you need an affiliate marketing program manager, think of your program as a garden. Let’s say you hire the best gardener to trim your plants and give your garden an exquisite look. Unless you have a gardener to maintain that look and care for the flowers, weeds will eventually take over and ruin everything.
The garden is, obviously, your affiliate marketing program. The gardener is your affiliate program manager. No matter how great your affiliate program is when you set it up, without proper management, all your efforts and initial investments will go to waste.
If you still don’t see the danger of running your affiliate marketing program on autopilot, think of the flowers and weeds as your affiliates. As you set up your affiliate program, you recruit only valuable affiliates, and your program looks great.
When there’s no affiliate marketing program manager to review and approve affiliates, rogue affiliates are approved automatically. Through their practices (e.g. cookie stuffing, forced clicks, bidding on trademarks in paid search, registering domain names with your branded terms, etc.), they discourage good affiliates and they even hurt your brand. After all, no one will admire or want to relax in a garden overtaken by weeds.
Now that we’ve established that you need an affiliate program manager, let’s see exactly what an affiliate program manager does.
What an Affiliate Program Manager Does
Affiliate program managers are often referred to as affiliate managers. This latter term suggests that all they do is manage affiliates. That is not true.
Affiliates cannot be managed. They are not your employees but your partners, and you cannot control them. All you can do is make sure they comply with your program rules and policies and motivate them to continue promoting your brand, products, or services.
You could say that an affiliate program manager “manages” your relationship with your affiliates. However, they do much more than that. Here is a brief overview of their main responsibilities:
- Develop and maintain an attractive program description
- Manage creatives development and updates
- Identify, recruit, and activate affiliates
- Create and develop an affiliate database
- Develop and maintain good, stimulating relationships with your affiliates
- Communicate with and engage affiliates with blog posts and newsletters
- Run and monitor marketing campaigns
- Develop, implement, and monitor affiliate promotions
- Identify new opportunities to enhance your affiliate program and implement them
- Keep your affiliates informed on new products and program enhancements and motivate them to continue promoting your brand
- Review and approve pending transactions
- Track affiliate sales and manage payments in a timely manner
- Competitive analysis and intelligence
- Compile an FAQ database for potential and current affiliates
- Represent and defend you and your program’s interests within the company, and more.
Yes, an affiliate program manager does all these and more. If we were to organize all their duties and responsibilities into categories, there would be five of them, considered the pillars of affiliate program management.
5 Pillars of Affiliate Marketing Program Management
Affiliates don’t fall from the sky, you need to recruit them. If you hire one, your affiliate program manager will take over this responsibility. It could take half of their time, but it will be worth it. Without affiliates, your program is like a website created and abandoned in the last search engine result pages where no one will find it.
The fact that a publisher applied to join your program does not mean they will actually promote your products and services. It is up to your affiliate program manager to convince them to do so, process briefly referred to as activation. Geno recommends activating affiliates in three phases:
- The recruitment phase – It involves motivating affiliates to join the program, start promoting your products or services, and generate their first leads/sales
- The welcoming phase – It involves motivating affiliates to actively promote your products or services in the application approval email
- The routine phase – It involves running aggressive campaigns to motivate those who have already joined your program but are not promoting your products or services to start doing it
Just because you’ve clearly prohibited certain affiliate behaviors, it does not mean all your affiliates will comply. It takes a vigilant and experienced affiliate marketing program manager to identify those who don’t and take measures against them.
Communication with affiliates is very important for your program’s success, and a key component of affiliate marketing program management. It is up to the program manager to:
- Maintain good relationships with existing affiliates and motivate them
- Keep affiliates informed on new products or services and eventual enhancements of the affiliate program
- Handle communication campaigns and affiliate correspondence
In order to ensure your program’s long-term success, you need to measure its performance, analyze it, and take measures to improve it. Your affiliate program manager will take care of everything. They will monitor your affiliates and your competitors’ behavior and your customers’ satisfaction levels and they will identify and exploit new opportunities to enhance your program.
The performance of your affiliate program will depend on its manager’s education, experience, knowledge, skills, and abilities. It will also depend on the tools and resources available to them. The best way to ensure your program’s success is to find a capable and reliable manager for it.
You’ll have two main options: manage your affiliate program in-house or outsource. Each option has its pros and cons. Let’s review them in the following lines!
In-House vs. Outsourced Affiliate Program Management
In-house management can be a viable solution for you if you own a small business, with few products and services, and/or you have a lot of time on your plate to figure things out. You could train one of your existing employees, hire an affiliate program manager, or learn the trade yourself.
If your business profile and your time allow it you should consider learning to manage the program yourself. It will not be easy, so you should think twice before taking this route. It could be rewarding, as it will give you a new perspective on your business. Moreover, managed correctly, your affiliate marketing program could become your business’ main source of profit.
If you later decide you are not fit for the job or you do not have the skills and resources required, you can explore other options. Since you will have tried managing the program yourself, you will know exactly what to look for in a potential affiliate program manager or outsourced program management agency.
No matter the size of your business, unless you are 100% determined and motivated to learn all there is to know about affiliate marketing program management and do the work yourself, you should consider outsourcing rather than managing your program in-house. Here is a brief comparison of the two alternatives:
Differences Between In-House and Outsourced Affiliate Management
An in-house program manager would be your subordinate but subordination does not guarantee compliance, hard work, or dedication. You would have to control them and measure the results of their work all the time. When you outsource, the OPM agency becomes your partner. They put their reputation at stake, so they will work with you to make sure the program thrives.
With an in-house manager, you will need to provide training. An OPM agency’s staff members are versed in affiliate marketing program management and so good at what they do that they could literally train anyone.
When you hire an affiliate manager, finding someone with experience in programs like yours will be a challenge. With an OPM agency, it would be surprising if they didn’t have such experience.
When you manage your program in-house, you need to provide your manager with all the necessary equipment and tools. These will considerably add up to your costs. OPM agencies, on the other hand, already have all the tools and equipment they need, so you won’t have to worry about additional expenses.
You can’t expect an in-house manager to know too many people or companies, but you can expect that from an OPM agency. They surely know all affiliate networks like the back of their hand, and they already have a database of potential affiliates to recruit from.
You should not expect to pay an in-house affiliate manager less than $50,000/year, without even counting additional benefits and cash compensations. With an OPM agency, you will only pay a retainer fee and a performance bonus. True, the performance bonus may get pretty high, but that will mean your program is doing great and you’re selling and making a profit like crazy, so it will be worth it. To make sure it is, you can negotiate a lower retainer fee and increase the performance bonus.
It may seem easier to hold an in-house manager accountable for their (lack of) results but that is not necessarily true. If you define your expectations clearly in your contract, you should be able to do the same with an OPM agency with even less effort.
In-house managers get sick, go on vacations, and, occasionally (some more often than others), have personal issues affecting their performance. With an OPM agency, you will not have to worry about such occurrences. They have the ability to cover and compensate for their staff members and they will make sure nothing affects your program in a negative way.
Why Work with an OPM Agency
If you’re running a large company, with a complex structure and a considerable inventory of products or services, activating in a competitive environment, you should definitely consider outsourcing. Every minute you lose training an in-house manager is another minute when you could be already making a profit.
An outsourced program manager has extensive experience, expertise, and connections that they can start exploiting to your benefit immediately. An in-house manager will need time to learn your business and start producing results. They will want health and retirement benefits, and you will have to invest in office space, computer, software, and training. If you later discover that they are not fit for the job or you fail at motivating them to stay, you will have to repeat the recruitment and training process.
For all these reasons and more, working with an OPM agency is a better alternative than hiring an affiliate marketing program manager. The only circumstance when you will probably disagree is if you already have a program manager. Even then, the results may not match your expectations or you may want to test various solutions. If that is the case, you can combine the two options: keep your in-house manager and work with an OPM agency as well.
Some OPM agencies will even provide training for in-house personnel, so you have nothing to lose by exploiting this option. You do have a lot to gain, from better and faster results to lower costs, fewer hassles, and more peace of mind.
Of course, the final decision is all yours. No matter if you prefer in-house or outsourced management for your affiliate marketing program, you should protect your interests through a bulletproof contracting agreement. What should the contract cover? We will review the basics in the following lines.
Drafting the Contracting Agreement for Affiliate Marketing Program Management
Most OPM agencies have their own contracts they send to their clients. In-house managers do not, so it will be up to you to prepare one and send it to them. No matter the situation, there are a few important aspects that you will want to make sure are covered:
1. Services Definition
Make sure there is a clear description of the role, duties, and responsibilities of the affiliate program manager (see our list of duties and responsibilities above). Outline penalties for failure to comply.
2. Agreement Terms
Your contract should clearly stipulate the period and cancellation procedures and terms.
Make sure the contract stipulates the number of hours the affiliate manager will put in every week and month. This will probably not be the case when working with an OPM agency.
If you settle for an in-house manager, they will probably work on the company’s premises. If you choose to work with an outsourced affiliate program manager, the place will probably be at their discretion.
5. Payment Terms
This section should clarify how much, how, and when you remunerate your affiliate manager. Make sure it details the payment structure and calculation method, the deadline, and any other specifics you have agreed upon. As mentioned above, you will want to have a fixed component and a performance-based one.
6. Employment Benefits
When managing your program in-house, this section will outline any benefits you ensure. If you choose outsourced management, make it clear that no benefits will be awarded and the affiliate manager will be responsible for paying their taxes.
7. Confidential Information
It is important to make it clear which information your affiliate manager should not disclose (trade secrets, data, processes, procedures, intellectual property, know-how, discoveries, designs, developments, inventions, improvements, techniques, business plans, forecasts, operations, strategies, software, financial statements, licenses, budgets, costs, prices, supplier and client lists, employee training and compensation, etc.
8. Conflicting Management
Your agreement should include a separate clause prohibiting your affiliate manager from engaging in any activities or businesses related to yours or conflicting with their obligations toward you.
You may want to stipulate in your agreement that your affiliate manager commits to not engage (neither directly or indirectly) in financing, operating, managing or controlling persons, firms, corporations, or businesses selling services or products that compete directly with yours.
As mentioned above, these are just some basic guidelines. For more in-depth information and concrete examples, see Geno’s book, Affiliate Program Management: An Hour a Day.
Other resources that will help you secure the best management for your affiliate marketing program are:
If you have questions or you would like help with affiliate marketing program management, don’t hesitate to leave a comment below or contact us! We’ll get back to you with the answers and solutions you need as soon as possible.