11 min. reading

Affiliate Marketing for E-shops

The basis of affiliate marketing consists of two sides. The advertiser and the publisher. The advertiser is someone who offers their online services or sells products (most often it is an e-shop) and needs to make themselves visible and get customers. A publisher (or an affiliate partner) helps advertisers to do this by having an online space where they can showcase the advertiser's products and services.

Affiliate Marketing for E-shops
Source: Depositphotos

Publisher uses the technical solution of the advertiser’s affiliate programme. They receive a unique, tagged address to the advertiser’s website. This address is promoted in various ways, and when a paying customer clicks through to the advertiser’s website, the publisher is entitled to a reward – usually a commission on the sale they have facilitated through their promotion.

What types of publishers are there?

There are different types of publishers. We divide them according to the way they promote the advertiser. So in e-commerce affiliate marketing we have three groups of publishers. Each group is specific in some way and requires a different approach.

1. Cashback schemes – the best example is TopCashback, which you are probably familiar with. These are loyalty schemes that give you back part of the value of your order. Such schemes also exist for online shops. It works like this: in an affiliate campaign, you as the publisher get 20% commission, give 10% to the user and keep 10%. Your advantage is the mass base and the hundreds of thousands of users you can reach.

Source: Topcashback.co.uk

2. Coupon sites – sites that collect coupons for e-shops. Just click through to the e-shop and the discount is activated. People love coupons mainly on their favourite e-shops. A coupon site can show the user the options at the right moment and motivate them to buy more or direct them to a specific promotion. A shopping basket worth €60 can easily become €150.

 

Source: Depositphotos

3. Content publishers – publishers who produce content in order to gain visitors (mostly from organic search). These are magazines, blogs, influencers, social media group owners, or review sites. Content publishers are the most valuable group of publishers. They generate new traffic that the advertiser would not otherwise get. These publishers play a crucial role in disseminating information, entertainment, and educational content to audiences worldwide.

Source: Depositphotos

Benefits of affiliate marketing

Affiliate marketing has several benefits for both parties. The main advantage, of course, is that unlike traditional PPC campaigns, the advertiser only pays a commission on sales. They don’t have to worry about cost per click (which may not be profitable), impressions, purchase effectiveness and so on. They simply pay for the actual order that the publisher has generated for them. So the advertiser provides the campaign, whether on the network or separately, sets the rules and the publishers have to follow them.

If the publisher brings in traffic that converts to a customer, they get a commission from the advertisers – it’s really simple.

In addition to paying customers, affiliates have another advantage. It opens the door to new sources of traffic. E-shops mainly use PPC campaigns or social networks as a source of traffic, where they often quickly reach a ceiling of efficiency and need to look for alternative sources of traffic – affiliate marketing can become a full-fledged new source of traffic for them.

Publishers who use affiliate campaigns as a revenue stream often have hundreds of thousands of site visits. When an advertiser makes their affiliate programme available to them, they can get both new traffic to the site and new orders. This brings us back to the first benefit. The publisher sends traffic to the advertiser’s site, but each click may not convert into a paying customer. The advertiser gets more traffic, but only pays a commission on completed orders. Perfect, right?

What is the commission?

How is the commission calculated? What is the standard commission? This is a difficult question to answer. There is no standard amount of commission. At Dognet we have different campaigns. Some have a commission of 0.5% and some even 30%. The amount of the commission depends on the segment in which the advertiser operates. With electricity it is impossible to offer as much as with food supplements. However, the level of commission must be comparable to other channels – PPC, comparison sites, RTB or social media.

Affiliate marketing is based on human trust.

It is created by people, not machines that can be turned off and on at will. That’s why commissions need to be set right from the start. An affiliate manager or network can help advertisers with this. If an advertiser says let’s try 1% and see, even though you can give 5%, you’ll end up with disinterest from publishers and even if you increase the commissions, the campaign won’t take off. So if he can give 30%, we recommend he calmly gives 25% at the beginning. The campaign will be attractive to publishers and will take off properly.

What to consider when setting commissions?

  • If it is an e-shop where people come back and buy regularly, you can set different commissions for a new customer and for an existing customer.
  • You can increase the commission immediately, but if you decrease it, give the publishers at least 14 days to decide whether or not to continue promoting.
  • Content publishers should generally receive a higher commission than other types of publishers. They put in more effort.
  • There is an option to set a different percentage for discounted goods, to segment the commission amount by category or brand. Definitely take advantage of this.

Most importantly. Play fair when setting your commission. Publishers are generally very knowledgeable about the industry. They know what the margins are and therefore what to expect. There’s no need to overshoot or make publishers look like fools by setting the commission too low.

How does an advertiser set up their affiliate programme?

The advertiser must provide the publisher with a tool to track who they have brought to the e-shop and what they have bought. Otherwise they will not be able to reward the publisher with a commission. The affiliate programme needs its own technical solution, just like the e-shop itself.

The advertiser can program their own system or buy a packaged solution such as Post Affiliate PRO or Affilbox. The last option is to join an affiliate network. Each solution has its advantages and disadvantages.

What do I have to take care of with an affiliate programme?

  1. Helpdesk – answering publisher questions can be quite time consuming. It’s amazing what people can ask over and over again. Of course, they expect an immediate answer. The helpdesk will cover the network for you if you run your programme through them. If you run it independently, you need to be alert and always ready to answer.
  2. Affiliate payments – as soon as affiliates request payment, it needs to be processed, verified and paid. And account for it. The network settles hundreds of invoices a month for the advertiser.
  3. Publisher – there are thousands of affiliates in the network. In a standalone programme (or box solution) there are none to begin with. You have to find, contact and acquire them all. It’s not impossible, but it is very, very time consuming.
  4. Publisher quality – If an advertiser doesn’t know how to assess the quality and relevance of a publisher’s contribution, they can get burned and have a very bad impression of the affiliate. The network overwhelmingly filters out any hint of problems.

Choose a separate affiliate programme if:

  1. You have a large e-shop such as Amazon. Large e-shops have room in their budget to create their own affiliate system and enough staff to manage it independently.
  2. You have a small and start-up e-shop. At Dognet we work with a revenue share model, so we only get a commission on sales. However, this wouldn’t work for us with small e-shops. For beginners, we always recommend our own separate programme.
  3. They have enough time and inclination to deal with the whole thing. If an advertiser explicitly wants their own affiliate and the other technical solutions don’t suit them, we recommend a custom system. However, the advertiser must be fully aware of the difficulty of campaign management.
  4. In fact, anyone who is aware of the time and knowledge required to run an affiliate programme. Finding an affiliate manager is not like finding a PPC or social media manager.

When deciding between your own programme and a network, the most important thing to remember is that when you work with an affiliate network, the network does most of the work for you. This saves the advertiser dozens of hours a month (and a lot of nerves).

Sellers of ready-made affiliate programme solutions are right when they say that the operation is “not that complicated”. It’s true that once the programme is set up, it can work. But does it really work? That depends on the advertiser and the time they are willing to invest in the system.

What are the benefits of having your own affiliate solution?

  1. You get 100% freedom – each network has its own boundaries within which advertisers and publishers operate. If you have your own programme, you can do whatever you want.
  2. You get 100% control – each network has its own way of working. With a standalone programme, you can set it up however you want. However, this can also mean that you get the terms wrong.
  3. You will save in the future – it is quite possible that you will save commissions paid to the network in the future. Warning. It is only worthwhile for very large e-shops that can afford to have their own affiliate manager.
  4. You can have an affiliate programme even if the network doesn’t want you – it may be that no network wants you for moral, procedural or other reasons. In that case, an in-house affiliate programme solution is the only way to go.

Affiliate Network

If an advertiser has decided to join an affiliate network, we believe they have made the best possible decision. By joining the network, the advertiser will gain many benefits and save a lot of time (and nerves). The affiliate network will do most of the work for the advertiser and that is of course its main advantage.

What are the other benefits of an affiliate network?

  1. Publishers already enjoy it – there are thousands of publishers on the network. When a new campaign is launched, they all get the information and it also hits them on social media. For new campaigns, we also used to do a separate publisher acquisition in Dognet. That way, the advertiser doesn’t have to find someone on their own.
  2. Technical solution – the advertiser in the network has nothing to worry about. Everything related to the technical side of the affiliate programme is taken care of.
  3. Publisher control – the network is partly responsible for what happens in it. At Dognet, we check publishers when they sign up and then check them when they participate in the campaign itself.
  4. The network also handles the payment of publishers – publishers are paid by the network and the advertiser receives one invoice per month for the entire service, rather than hundreds of invoices for each conversion. You can imagine how much time this saves.

What is the advertiser’s role?

The advertiser has only one role in the network: to evaluate the conversions.

Everything else is taken care of by the network itself. Communication and willingness on the part of the advertiser are important for a successful and long-lasting campaign. The network has many ideas and suggestions on how to improve and develop the campaign, but it needs agreement and mutual cooperation to implement them.

How to choose an affiliate network?

There are several affiliate networks operating in Europe – Trade Tracker, CJ affiliate, Rakuten Advertising, Webgains, Trade Doubler, Awin, Admitad etc. The choice of affiliate network is ultimately up to the advertiser. Each network has its own boundaries, requirements and fees, and it is up to the advertiser to decide what best suits their vision. At Dognet we believe in a win-win system and the advertiser only pays the network a commission on the conversion.

If there’s one thing to look out for when choosing a network, it’s unexpected fees.

Don’t be afraid to harness the power of affiliate marketing. A properly set up affiliate campaign can open the door to new traffic and often increase your sales by up to 25%. It’s up to you whether you want to try it or not.

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