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Why Every Affiliate Marketing Business Can Benefit From PPC Advertising

Affiliate marketers tend to have strong opinions about PPC. They may have put it in the too hard basket with or without trying it, they might have spent lots for little result or they may have even been banned and are still scratching their heads on exactly where it all went wrong. When we talk about PPC for the most part we are talking about Adwords. Sure there are other choices out there, the most prominent of which is Microsoft’s adCenter which allows you to advertise on Bing and Yahoo. The fact is though, even their combined volume is small compared to what you can get through Adwords, making Adwords the best bang for buck in terms of traffic your ad is exposed to.

Many affiliate marketers think that their business isn’t suited to PPC, their model not being built around direct calls to action that quickly send new visitors off to merchant’s sites. An example of this could be a travel search site that includes affiliate links for people to buy flights after they have picked routes and dates. Usually a site like this isn’t going to see a high conversion rate for each visitor. Many visitors will get confused with all the possible search options, others will just be using it as a guide to plan their trip or are just comparing prices. With travel you also get a lot of “window shoppers”, people that are looking at what is available without looking to make an immediate purchase.

As a rough guide to conversions I will put down some approximate numbers (feel free to disagree with these, they are somewhat based on experience and somewhat based on general feelings I have from affiliate marketing experience). For a single page with a direct call to action, such as links to a few targeted merchants in a niche, you might hope to get a conversion rate (a conversion here being a click through to a merchant) of 50-60%, but little reason for users to ever revisit your site. For a page with a bit more going on, still targeted, but including multiple merchants, multiple product choices, links to other pages and features on the site to visit, you might be looking at 30-40% conversion as being good (Of course this additional build out should benefit you by covering a wider collection of deals and giving you a far biggest list of relevant keywords. Also hopefully in making your site useful enough that people come back to in and not head straight to the merchant next time). This is still giving users a fairly direct path to merchants, just giving more options. Once you are providing users with a blank slate landing page with a large amount of possible search options and multiple levels of interface to get to a merchant you might be looking at 5% or less conversion rate. Of course with this type of model you are looking to acquire return customers that love the service enough to recommend it to friends.

It is pretty easy to run some numbers on a site not suited for PPC by virtue of conversion rate and determine it is a waste of time. Such numbers may be:
25 cents cost per click (relatively long tail term)
5% conversion
$5 cost per conversion
10 average conversions per sale (or any commissionable action)
$50 cost per commissionable action
$10 average commission

With those numbers you are $40 out of pocket on every time you earn commission,  the break even point a 25% conversion rate (assuming the other assumptions remain unchanged). You would also have to factor in how many of those paid visitors end up using your site again, telling friends, signing up to a mailing list or other services you offer. Even with all this though, advertising around general terms (which can cost a lot more than the CPC mentioned above) is probably not going to be a long term winner. Branding could come into play, using advertising as somewhat of a loss leader to get a critical mass of users. Although unless you have a lot of money in the bank your probably looking for direct quantifiable returns on your spend.

Another slightly different business model to consider is an informational site, to borrow from travel again you may have built up a site that has lots of quality articles on what to do when traveling to a certain place. Again your going to have affiliate links on things where available (and probably also running some ads) but users are primarily after your content rather than your offers. Many will come, read articles, then leave the site without clicking on any offers. This isn’t a bad thing, you may rank for a large number of terms and have repeat visitors, it will just mean individual PPC clicks will have a lot conversion and therefore a negative expected return.

So what can you do with PPC if you fit one of these lower conversion models?

More specific landing pages, use a different model for your PPC visitors.
From the simple math above, the low conversion rate isn’t going to make you a direct profit. What you can do though is pick out specific offers and either build a landing page around them or simply deep link people into existing functions of your website that would usually take user actions to get to. So instead of advertising on “travel search” or “travel search australia” you advertise on “melbourne to sydney”, “fly from melbourne to syndey” or  “cheap travel syndey to melbourne” etc. These ads can have destination urls that pre-populate your search engine for the specific Melbourne to Sydney route, you could also pre-pick a date range to give the user an instant idea of price. From this users will only require a small amount of actions to convert. Users searching for the specific route are also more likely to be looking to buy than those browsing around your site.

For a site with many informational articles the strategy would be to pick specific offers and target the article around that. So instead of a topic  ”Where to go in New York”, you would target a single New York attraction on which you are able to earn a decent commission and make the whole page about that. One thing you must be careful of though is being considered a bridge page by Google. This means that they decide the only purpose of your page is to send people to another site. If you have a decent collection of unique content on your site though which internal links between it you should be fine.

Promote special offers.
Merchants are frequently trying to push special offers. While the normal affiliate offers you are using might not work for PPC, building something around a really good special or unique opportunity might. This can be a good opportunity to test PPC against a limited set of keywords/ landing pages without rolling it out to you whole site.

Get a feel for keywords, where further SEO efforts are best placed.
Baring some amazing extra source of traffic, not being a PPC affiliate basically means you are an SEO affiliate (or amazing at social networking). Optimizing for organic traffic can be a very effective strategy, large amounts of free new or returning visitors is always going to be desirable. What is hard though is starting, initially you don’t have a great big list of keywords that work well and you also don’t know which are going to be dead ends. It is really hard to know where to best spend your time producing content and link building. Bidding across some broad match terms can quickly give you an idea on the type of traffic you get, the keywords they use and whether they convert. A broad match is a keyword which will display for that particular search query, as well as an other closely related ones. That way from a few keywords many different, more specific search terms are found that can be targeted.

Test features/ concepts.
Following on from the last point, if you are considering branching out into different areas or even using different content around your current offers you really want to know quickly whether the new ideas will fly. Usually it takes time to build up search rankings for new terms in organic results, this could be wasted time when you find out that traffic from these searches isn’t converting well. Google’s keyword tools can give you a rough idea of expected search query volume but what visitors will do once they reach you site is a big unknown. The fastest way to test this is PPC.

Learn.
Even if right now your affiliate marketing business is unable to make PPC work at all, there is always the experience you will get by giving it a shot. Adwords is both a powerful and extremely complex tool, an important once in any marketers arsenal. AffClicks simplifies the experience, putting it in the reach of even the smallest part time affiliates but there is still a learning curve there that can only be overcome once you get stuck in and run some ad campaigns.

Once a campaign is running, the affiliate marketers next big question is how am I going to track the results? Without a specialized tool this is a difficult task, if you are a merchant doing direct sales you can put conversion code on your sales thank you page and have little problems tracking ROI. For affiliates though you don’t control the sales process so most of the time this isn’t an option. One of the core motivations for AffClicks is to get around this issue, although we have extended a lot further to build a comprehensive solution for PPC affiliates.

Currently this isn’t available as we still need out API implementation approved by Google but the commission aggregation component plus much more is, signup for beta on affclicks.com if you are interested.

I would love to hear others opinions on PPC and affiliate marketing, what have you found successful? What has just cost your money? And any problems you have had that more advanced tools could solve.

Social Extensions Introduced Into Adwords Ads

Earlier this year Google introduced the +1 Button for Google Plus and 3rd party website to implement. It is their answer to the controversial Facebook Like button which is now firmly entrenched across the net. It behaves in a similar way allowing users to indicate that they found something engaging or useful. Of interest to search marketers and SEO’s is that +1’s are shown in organic results and ads. A page with more +1’s can improve ranking and click throughs both algorithmically and because of Social Proof.

Back in March when +1’s were first introduced into organic search and ads they only applied to single page/ ads, meaning that it was unlikely those advertising across many niches/ product lines would be able to build up a significant number. Further hampering reach, they only appeared when a user had a connection to another user through Google Plus.

This week though they added Business Pages to Google Plus. These pages are very similar to Facebook Pages. They are another place for businesses to build up a social presence and connect with customers. The big difference though is that through social extensions you can connect all your ads to a single Google Plus business page and the +1’s gained through this page will be shown across all your ads. The other big change is the distinction between personal and basic annotations. Before only the personal annotations, where an ad would show +1’s if they were from a users connections applied. Now basic annotations will give a count of the total number of users that have +1’d your page.

Building a following on Google Plus is potentially far more rewarding if you primarily rely on search marketing for new customers rather than social presence/ community building and the curation that goes with it. This is especially true of smaller Affiliate Marketing operations who just don’t have the resources to make a big impact in social media.

Will this have a big impact on click through rates and get your ads standing out? I think that the social proof of knowing that others have visited a site/ business page and found it to be useful is a big deal. There are so many scammy or just low quality pages on the net that users are always going to be wary of new small operations and any promises that they make. Displaying trusted badges from popular shopping networks has been shown to dramatically increase conversions as the user trust the shopping network and by proxy trusts your site as part of that network. This should provide a similar effect when it comes to a user deciding what ad or organic result, if any, they wish to click on.

All this just provides the framework though, in order to leverage it your going to need to build up a decent number of +1′s, this involves ideally having a web site that people are happy enough with to want to recommend  to others, and once they do decide this, an easy way for them to do so. This is where a yet to be released badge from Google will come into play. I think from the choices of badge available the only badge will really be effective as is the which includes the +1 button (shown below). Asking your users to click through to Google Plus or add you to their circles is asking a lot and will lower the amount of +1 recommendations you can collect. Once this badge is available I would put it in prominent places and encouraging people to use it or add to their circles to say up to date on your latest offers. It also requires users to have a Google Plus account, numbers will vary depending on your nice but it is growing fast.

Google has also added segmentation for both personal and basic social annotations so you will easily be able to see the impact the extensions are having on your Adwords metrics.

Unfortunately currently not all users may be able to get the social extensions as it currently requires a verified page (“If you haven’t already verified with Google that your Page actually belongs to you, you’ll need to complete this step first. If you skip this step, you’ll be able to link a Page to your campaign, but your ads will not include this feature until this step is completed.” [http://adwords.google.com/support/aw/bin/answer.py?hl=en&answer=1645035]) and Google states “Since this is primarily a security mechanism, there’s no way to apply for a verification badge. If we think you or your page might benefit from a badge, we’ll reach out to manually verify you.” [http://www.google.com/support/plus/bin/answer.py?hl=en&p=plus_page_verification&answer=1620074] Hopefully this restrictive use won’t prevail for long and we can all start experimenting with incorporating social signal into search ads.

The Future of Affiliate Marketing – Part 1

This is part 1 of a 2 part series we are doing on the future of affiliate marketing to coincide with our panel at Affili@Syd on the same topic. Unfortunately now that we are unable to make the panel these posts can now be taken as a summarization of our views.  I (Rob) will be taking a look at the progression of the technical side of Affiliate Marketing while Murray will take a closer look at the business side of it.

The way the future will affect your affiliate business is probably strongly tied to the model you are using. I identify 2 main models: those in which your product is presenting affiliate products in a way which you consider to be more useful to the end user than them going directly to the merchant and those in which your main product is some other form of content or user interactions which you are using affiliate marketing as a way of monetizing a user base.

One of the key drivers of change in affiliate marketing is Google. Google makes up the vast majority of search traffic that most sites receive (dwarfing it’s nearest rivals Bing/Yahoo), it has the power to both build and break vast content networks as sites like Mahalo have found out. In the past, when Google was just beginning search advertising, the restrictions on what you could advertise were weak, placing down a single landing page with a few links could produce a large return for affiliate marketers. Of course in many cases this wasn’t overly useful to end users, as with most platforms (Facebook, Apple app store etc) there is a gold mine for early adopters before things settle down and quality rises to the top. A large portion of Google’s revenue, 96% in 2010 in fact, relies on users continuing to find Google ads to be useful enough to click on.

The result is new rules which effect the way affiliates advertise, a couple of instances which can results in bans are made for Adsense arbitrage and bridging pages. Made for ad sense pages are ones which have been created with the primary purpose of getting the user to click on the Adsense ads to drive profit to the publisher. The arbitrage component is when the publisher is bidding on Adwords with the intent of making more money per click through Adsense than it is costing them in Adwords. A bridge page is when Google considers that the primary purpose on the landing page you are advertising is to drive traffic to another page, in this case products on a merchant’s site. Bridging pages are a little harder to avoid, especially when your main product is presenting merchants products.   Google expects each site to value add around the products being presented. Stuff like comparisons to the same product at different merchants, user reviews and ratings, professional reviews and additional descriptions. This is driving a lot of change in affiliate websites as what was once thriving, profitable campaigns are now no longer being allowed onto Adwords, the time of a one page affiliate site is coming to a close.

Those publishers using affiliate marketing to monetize their original content are also facing hard times and a changing landscape courtesy of Google. Recently Google introduced the Panda search update, aimed ranking content lower which was deemed to be from low quality content farms or taken from other online sources. This has had the unintended side   effect of making it harder for legitimate to rank above those either outright taking or rehashing their content. Google search results is mostly a winner take all game, with around 50% of searches resulting in the first result being clicked on. Having this converted first position for the keywords relevant to your business can easily be the difference between turning a decent profit and making a loss. You may ask, why isn’t site the that has invested the time in creating relevant and useful content being rewarded with the best results? This is mostly due to an arms race between Google those working on search engine optimization. Many of those creating spam sites using other content are also well honed at optimizing their websites to be exactly what the Google algorithms are looking for, leaving the smaller operators coming off second best despite investing in producing content.

 

Example Click Rankings : Taken From A Leak Of AOL Search Data in 2006, read more: http://www.agent-seo.com/seo/click-distribution-percentages-by-serp-rank/

 

Despite the hype around social networking being a saviour for those sick of having to deal with Google’s effective search monopoly I don’t think search marketing is going away any time soon. While social will work for certain affiliates, those that can cultivate an audience around their offering and engage them regularly (similar to those that have successfully ran discussion forums in the past), those looking to acquire users and push them quickly to convert won’t see a great deal of help from social ads of a basic social presence. The motivations behind the users that is seeing your ad on a social networking website are very different. With search they are actively seeking out the product that your keyword is matching for, on a social network they are generally conversing with friends and aren’t in a buying frame of mind. Ad’s that attract their interest and send them to a Facebook page based around it rather than trying to directly convert will see far better click through rates. It is possible social sites such as Facebook may eventually take hold with enhanced search engines drive be social recommendations rather than algorithms but this is still in the distant future. It is more likely we will see search engines like Google leverage social recommendations to aid algorithms rather than replace them as we are seeing emerge with the +1 button.

In addition to Google creating a need for more complex websites consumers are pushing in this direction to. Consumers have progressively grown more tech savvy and have placed more importance on the online medium as a primary method for both product research and purchase. While I don’t agree with needing a full blown system of product comparison, searching, sorting and user reviews around every affiliate site consumers are certainly demanding more of the sites which they visit. For those interested in attracting repeat customers much though must be put into creating unique value over the merchant sites you are linking to.

Unfortunately all signs are pointing towards the future becoming increasingly difficult for newcomers to affiliate marketing. Becoming established though is becoming ever more valuable as increasing amounts of consumer purchasing is done online. This is driving more merchants to consider opening up their businesses to affiliates as a new revenue stream. Merchant uptake of affiliate programs, especially in Australia has been fairly slow, many of the established retail brands like Harvey Norman, Kmart, Target and Myer are only now realizing that online is quickly becoming consumers preferred way to purchase.

As affiliate marketing grows the technology powering it becomes more important. Many affiliate networks currently have out of date software that make it hard for the affiliate marketer to get all the information they need to run their business. The more progressive networks though are moving towards things like cookie-less tracking to ensure affiliate based sales aren’t missed, comprehensive reporting, prompt payments and API’s which allow users to both retrieve performance data and access product feeds to automatically update their websites. On the Australian front I look forward to the launch of Commission Factory which appears to be a network that will embrace these technology changes needed to support the increased sophistication of affiliate marketing into the future.

Networks are also turning an eye towards mobile, the new boom area in computing. While mobile can be similar to traditional online experiences there are tighter restrictions because of screen size and the intermittent/ slower nature of connections. A very recent movement in mobile is known as responsive design, basically this means using media queries in CSS3 to apply different types depending on the screen dimensions of the viewing device. I think as there is support from more devices for this standard it will be used more and more to manage a single presence across the normal web and mobile without having to maintain individual projects.

Mobile also allows for location based services, which depending on your site/ app can be used to choose what to present to a user. An example of that is only showing content relevant to local merchants to a user when they view your page, this especially works well when it’s services that you are selling. Many are seeing the value, despite the extra effort required, in building native apps for platforms such as iOS and Android. Caution must be shown here though, as building native apps generally requires a separate technology stack for each platform, resulting in either a steep learning curve and maintenance for affiliates building these apps themselves or a hefty bill to outsource quality the building of quality apps which pass Apple’s and other review processes. I would recommend, if going down the app path as an addition to your current offering to build a html app first to test the waters before investing in platform specific apps.

As affiliate marketing gets more complex it is important to track as much data as possible, even if the data may not be able to be used now. An example with Affclicks is that I was recently thinking about tracking amount of sales that come x number of days after a click through to a merchant to determine things such as is a 10% commission with 60 day cookie deal better than a 12% commission with 45 days cookie deal. While that currently isn’t a feature, having the data there allows these future inferences to be made. Another few areas of tracking which may be on the rise is A/B testing, heat mapping mouse movement and also heat mapping eye tracking. A/B testing is when a the same page is displayed to users with different small variations in order to measure which variation has the most positive impact. In terms of affiliate marketing this may be measured on either click throughs to merchants or commissionable sales/lead from the merchant. Tracking mouse movement with a heat map can show what is grabbing users attention and what is confusing them, leading them to click away from your page rather than convert. Similarly eye tracking tests are easier than ever to conduct with companies such as GazeHawk using webcams to conduct them.

A example of what a mouse tracking heat map looks like, identifying where the most attention is given on the page. Source: clicktale.com

Affiliate networks exist to serve the interests of both the merchants and the publishers/marketers, Google serves their own interests and those of their end users both in advertising and organic search results. This means that they both aren’t always serving the affiliate marketers best interests. That’s where Affclicks comes into the equation, built from the ground up by affiliate marketers for affiliate marketers specific to their needs across both the search marketing side and the

Increasingly, having the best offering means joining programs across multiple affiliate networks, without good aggregation software though this has meant a large increase in the affiliates workload to monitor these efforts through different reporting interfaces. Also even with mastering these offerings reconciling commission with organic and paid search efforts has been a challenge. Going forward software like Affclicks a similar will be key to maintaining increasingly complex affiliate marketing efforts.

Affclicks makes it easy to manage the many networks a modern affiliate business may use.

Changes have and will continue to present challenges for affiliate marketers, the barrier to entry has increased in recent times and looks set to continue to do so. For affiliate marketers that can overcome this barrier though there is a wealth of new opportunities, both now and into the future. Having the right tools to navigate the affiliate landscape and ensure that your effort is being placed in the right areas has never been more important.

 

The Google +1 Button

Just this week Google has released the +1 button for embedding it websites. This button is similar to the social buttons we have seen from the likes of Facebook, Twitter and others. It has been available to be clicked on in the index for some time, although this breaks the normal flow of searching then viewing results pages, people don’t want to click on your site then go back to Google to +1 it.

Currently the motivations for users to click on this button aren’t as clearly defined as they are for other social buttons, with Facebook clicking the like button is a shortcut to sharing content you like with friends, with Twitter it is a shortcut to sending a Tweet with the same effect, sharing content. With the +1 button due to Google’s lack of a centralized social platform currently the main effect of a user hitting a +1 button is that their friends (if they are connected to them on Google through things like Gmail and Buzz) will see those sites +1ed highlighted in their search results. Given how diverse search results are and how friends aren’t necessarily going to like each other’s recommendations this button provides little utility to the end user currently. It seems more of a play by Google to build up a graph of recommendations as to not fall behind on all the data Facebook from the like button.

Having said this though, depending on your affiliate model this button could be the most important one you can have for users to click on. This button is also being included for paid ad results, while quality score won’t be affected by it currently the social proof of a site having quality content will lead to better click through rates than those that don’t. It is also being used as a factor for organic search ranking meaning that appeasing the Google algorithm isn’t the only concern to take into account now when working on an SEO strategy.

 

 

With all the social services currently competing to have their social add buttons across the web (a quick look at addthis.com shows over one hundred services with buttons to choose from) button fatigue becomes a real issue. Having too many buttons may just confuse users and have them not clicking on any of them. I would suggest not having more than 4 and removing ones fairly quickly that are showing little impact relative to others. The choice on the +1 button, as I said earlier, comes down to your model. If you are a straight through affiliate site, relying primarily on organic and paid traffic with little retention then the +1 button is your number one and may suffice being the only button. This is because most users will be more likely to share the sites your linking to rather than your own site, all you want is better organic rankings and better ads click through rates. If you are an affiliate that tries to retain a customer base through value add the choice becomes a bit harder as the Facebook like button is probably the number one thing you want.

As always making measurements on your choices and iterating depending on the numbers will lead to the best results.

Rob.

 

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