Top 7 Reasons Why Advertisers Should Also Have An Affiliate Program
By Glenn Sobel
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With thousands of online entrepreneurs now offering affiliate programs to promote their businesses, there is little doubt that affiliate marketing is a viable method of generating traffic, sales and branding. While it won't necessarily turn a failing business into a raging success, it will almost always, if done correctly, make a good business even better.
If you are spending money on any form of online advertising, you really need to look at starting your own affiliate program too.
Here is why.
- Banner ads are losing their effectiveness. If you are paying just to have your banner placed on other sites, you are risking the possibility that you will get little or no return on your investment. Why not place those banners via an affiliate program where you only pay for click-throughs? That way, you are bidding a fixed price for a visitor instead of gambling on how many visitors you'll get. Look at it the same way as if you were buying a cost-per-click position on a search engine such as GoTo. The only difference is with an affiliate program your cost-per-click will be lower.
- For branding purposes, banner ads are only minimally effective. Why? Because people know they are a paid ad and pay little attention to them. Paid ads carry little in the way of credibility. With an affiliate program, many of your affiliates will use their reputation with their visitors to endorse your business. This kind of personal endorsement not only benefits your reputation, it also tends to increase the ratio of visitors to customers by pre-selling them before they even get to your site. This erases their fears and natural tendency to be a bit skeptical of you when they are introduced to you via a paid ad.
- With paid advertising, you are constantly looking for places to make your buys and negotiating deals, payments, etc. That's an awful lot of overhead and manual effort to maintain your exposure. There is tracking and evaluating of performance, re-evaluating the benefits of each buy, etc. All to make sure that you're getting your money's worth. With an affiliate program, you are pre-setting those factors by deciding exactly what you are paying for and how much you are paying, so it's a fixed cost per action.
- When your goal is to sell a product or service, you can only guess how much ad money it will cost you to generate a sale. This means that you have to also guess what your pricing structure will look like until you get a handle on your cost of advertising per sale. If your guess is wrong, you could lose a bundle. By having an affiliate program that pays a fixed amount per sale, you know exactly how much your promotional costs are per unit in advance. This makes your product pricing simple. You know your profit per sale before you spend your money, not after you figure out your performance.
- With paid advertising, you must spend more money to get more exposure. Every time you ad another location for your banner, you are also increasing your investment and risk. With an affiliate program, there is no limit to the number of affiliates you can have, and there is no real additional cost per affiliate. So over time your exposure keeps growing without any additional expenditure. Since the tracking, payroll, etc. is all automated, there really is no incremental cost to add affiliates.
- No matter how successful your ad campaign is, once it's over you are back to square one. Another campaign, another set of payments to get it going. However, with an affiliate program once you get past your initial set up costs, which can be very low (a thousand or two), your cost of maintaining it year after year will be substantially less than maintaining an ad campaign even though your affiliate program will be growing larger.
- You can use an affiliate program to generate newsletter sign ups as well as site registrations or downloads also, and pay per action. Whether you are promoting a free e-book or a give-away software program, you can pay for each visitor who completes your desired action. That way your promotion costs are fixed in advance by you so that you are never at risk of having an ad that doesn't generate any benefit to you.
The bottom line is this. It is hard to imagine any online advertiser who wouldn't be a good candidate for an affiliate program. It's just a more predictable, cost-effective method of promoting your site, your name and your products. Whether you decide to go it alone or use a third-party service, if you aren't looking carefully at the benefits of having your own affiliate program, you're probably making a big mistake.
As a regular speaker at Affiliate Force (the next event is in Los Angeles in July 2000. See my site for details), I am always amazed at the opportunities that people don't recognize when I talk to them about how they can use affiliate marketing in their business. You don't have to be selling books or CDs to use one successfully. Think creatively, or contact me. I'll be happy to help you through the process of looking at your options.
You can also find additional information on starting your own program at my site. For the go-it-alone types, you'll find several excellent options at www.AffiliateAdvisor.com/StartAP.htm [http://www.AffiliateAdvisor.com/StartAP.htm] and for those of you who prefer using a third-party provider (which I highly recommend for most of you), please take a look at [http://AffiliateAdvisor.cj.com]
Either way, email or call me so I can give you some valuable tips. That will jump start your program to greater success. I look forward to meeting and speaking with as many of you as possible. Good luck with your marketing efforts.
Glenn Sobel, J.D. is a consultant to merchants and affiliate program
providers. He speaks at conferences, publishes a widely-read news-
letter on affiliate marketing, which you can get free by sending a
blank email to DNAmailfirstname.lastname@example.org, and runs
AffiliateAdvisor.com, a Web site dedicated to education,
recommendations and resources for merchants and affiliates. He can
be reached at his office in Sherman Oaks, CA at (818) 995-6708 or
by email at Glenn@AffiliateAdvisor.com
Article Submitted On: June 23, 2000