Affiliate management companies are very similar to SEO companies. Our channel is 100% out of our control, we can only do our best based on experience to drive results, and you need to be very cautious of who you choose to manage your program. When talking to potential clients, something that has been coming up a lot more than normal is “but XYZ company guaranteed XXX% growth or results” or “XYZ company said it will be XY% of our total sales”.
If someone said one of the above things to you, you’re probably talking to a scammer since nobody can guarantee results or predict performance with an affiliate program.
The short answer is that you do not own the affiliates’ websites, you do not own the search engines, you cannot control what social media channels share, etc… Because you cannot control any of the traffic sources, you cannot guarantee exposure, traffic or sales. Since since are 100% out of your control, no one can actually promise you will have sales or forecast the performance of an affiliate program, with one exception.
This post is meant to help you explain this to your boss, your clients and to future clients that hire our company. It will help to explain why any affiliate manager or management company that actually knows the channel will never make guarantees on an affiliate program’s performance and why you may want to look elsewhere for management if someone does.
With that said, there is one scenario where you CAN absolutely guarantee, forecast and predict results from an affiliate program. However, if this is happening with your program, you may want to consider buying a proper attribution system and learning about what adds value and what doesn’t. I listed the exception first so that if you don’t want to read the rest of the post, you can at least gain something from it.
Why Affiliate Managers Cannot Guarantee Results
To help keep this post user friendly, here are the main topics you’ll find. Each addresses the claim about a specific type of partner or promise and an explanation of why you cannot guarantee results or forecast affiliate program revenue with each.
- The One Time You CAN Guarantee Results
- You Don’t Own Your Affiliates’ Websites
- When Google/Bing/Yahoo Update
- PPC Partners
- It’s Up To The Users to Convert
- Partners Quitting Affiliate Marketing
The One Time You CAN Guarantee Results
The one time and only time you can guarantee results within an affiliate program is if you allow theft and poaching. If anyone has another example of when you can, please share it below and if it is real, I will happily approve the comment.
Why does poaching and theft allow you to predict performance? Simple, your partners are taking from your other channels so as they grow and shrink, the partners’ sales will as well. If you have a huge sale you’re promoting heavily, your low value to no value partners will scale along with it. Here are some examples.
Low value to no value coupon sites: (Please read this post about value adding coupon sites)
If you have XYZ amount of sales, a coupon code box and active affiliates ranking for your url + coupons, anyone who leaves your site to find a deal and clicks on those affiliate’s links will now generate a sale within your program (assuming you use cookie based tracking and they don’t wipe their cookies). Whatever the percentage of YOUR customers that leave for coupons is, this is what your manager can guarantee your program will generate.
(Side note: if you have this happening, please talk to your SEO to rank your own web properties for these terms. You’ll be able to save a lot of money in the long run if this is happening to you and it’s fairly easy to replace them.)
The reason you can predict and forecast an affiliate program’s performance is that these sites are poaching your cart and your own traffic (not bringing in new customers and probably not adding value). As long as you allow it, they will continue to grow and shrink as your site does since they are poaching other channels like email, PPC, SEO, etc… Above there is an example of when you have a big sale and your numbers increase, they will too. At the same time, if you lose a large keyword in the search engines that drove a lot of sales, you’ll see low value to no value partners shrink as well since they were poaching this traffic. The same goes for trademark bidders, toolbars/adware and other little to no value adding partners.
(Side note: there are some small exceptions to partners matching your non seasonal traffic patterns. If your site is not mobile friendly and your visitors are now coming through with mobile devices, this can cause a large drop that would match your natural patterns, but does not mean your partners are poaching your traffic.)
Another example is adware in the form of some affiliate toolbars, reminderware, couponware, loyaltyware, shopping helpers, etc…
The more the adware can intercept and set a cookie on your customers browsers while they are coming to or interacting with your site, the more sales they can drive. If your site has less traffic and the adware or trademark bidders are intercepting it, their numbers will shrink. If you do a huge boost in PR, search, etc… or have a sale, they may increase as well since the adware can intercept more of them.
The main point is that if you allow theft/customer poaching, the more your brand grows and shrinks, the more your low value to no value partners will grow and shrink. There are some exceptions like the one I mentioned so do not jump to conclusions and boot everyone out. Hire someone to do an affiliate program audit instead and I’m always happy to jump on a skype call and see if you have an issue with your program if you want.
You Don’t Own Your Affiliates’ Websites
As I said above, nothing in an affiliate program is within your control which is why nobody can guarantee or predict results from an affiliate program. You can’t even accurately forecast the next year unless you are allowing yourself to be stolen from. The prime example is that you do not own your affiliates’ websites.
I have a lot of niche blogs that I monetize with affiliate links. I control the websites, I own the content and I decide who to promote on them. This is why only I can guarantee you’ll get the exposure on them, but even that cannot guarantee results.
If your affiliates that add value stop making money with your program, they can pull your links off and replace them with your competitors. Some may use ad networks like Google AdSense or Facebook’s new platform instead. If your competitors decide to buy them out for a flat fee because they see a solid customer acquisition channel, they can add a section into their contract or media buy that they are not allowed to work with you. Because you do not own their websites, you cannot guarantee inclusion and that also means you cannot guarantee they will work with you or send you traffic or sales.
Unless you buy every website and all of the copy that your affiliates create, you cannot guarantee they will continue to work with you or give you the same amount of traffic or exposure. This is why it’s important to have a good relationship with them and do your best to make them happy. Happy partners have a better chance at wanting to work with you. Because you do not own their websites, you cannot guarantee that they will promote you and also that you will get traffic or sales.
When Google/Bing/Yahoo Update
Even if you are being promoted on a ton of great blogs, directories or resource sites, if their main source of traffic is SEO and their site gets wiped; your traffic and sales do too. This happens a lot and can devastate a program. That’s why it’s always shocking when to hear merchants say that they don’t want new partners and are only keeping their top 20 or 50. (Those merchants are also usually the ones with the most theft and are managed by a network or scam agency so it really isn’t a big loss if you are an affiliate and you get rejected from them. You’re better off with other programs that have managers that understand the industry anyways.)
The big point here is that you do not own Google, Bing or Yahoo, so you cannot guarantee that your affiliates will always rank well in them. If you did control the search engines, you would probably show your own site first and then web properties you created to make your site look better. If you did this, you wouldn’t need the affiliates from this standpoint since you have already taken their traffic and can give it to yourself without paying commissions. Unfortunately you do not own the search engines so when they update and affiliate sites move up and down, so do your sales.
Because many affiliates rely on search engines for traffic, if their sites get wiped, your sales do to. This is another reason why nobody can guarantee results or revenue from an affiliate program.
Some will argue that PPC partners can guarantee your success. They buy traffic, control their budgets and can keep it coming to your regularly. This is a valid point, but there is one big part missing.
PPC partners control their ads and budgets and you do not. If they cloak links, use redirects or even landing pages in between the click to your site, you also do not know what terms they are bidding on (there are some tools to help find them) which also leaves you without a chance to replace them if they leave your program. But why would they leave your program if they’re profitable?
If your finance team or someone else in the company decides to change your site and monetize it with ads or leaks, you will quickly see value adding PPC partners pull since they are investing their own money and don’t want to lose it because you leak their traffic. As they pull their campaigns, you are left without any knowledge of their traffic, keywords, which engines drove what customers and now you will lose their sales. You have to hope your PPC team can figure out their strategy and implement it, but chances are that if they didn’t know it already, they probably won’t figure it out and your company loses.
Unless you pay for the PPC firm to share their campaigns and strategies, and you have the budget to spend on more PPC, then you cannot guarantee the continued success of the program. One of the biggest things I see is that sometimes they may have been bidding on the same keywords as you. If this was happening, depending on the engine, you now lose the traffic 100% since the engine may only allow one site per keyword. Depending on the keyword, the additional ad space in the engines could have been adding a lot of value and the loss can cause damage to your company. Since you do not own the affiliates, do not supply their budgets, etc… you cannot control if they will continue to work with you. Because of this, you cannot guarantee any results or predict the performance of PPC affiliates within an affiliate program.
It’s Up To The Users to Convert
The next big reason why there are no performance guarantees with affiliate programs and that you cannot forecast sales is that you do not control the end users or traffic on your site. Yes you can make changes to your site and increase conversion rates, but everyone’s traffic is different and will respond/react differently.
You may find an amazing website, but if their user base doesn’t like your sales funnel or design, you won’t get many or as many sales. If you change the design of your site and the sales funnel has a larger drop off from affiliate, but works better for other channels, even if your traffic increases, the total sales will be lower than the forecast since this channel doesn’t respond well. This could be common if you’re going through a re-branding process.
Another issue could be that your site not as user friendly or you’ve added too many upsells in the checkout process. If this turns off your end users, then no matter how much traffic your partners refer, you cannot control if the person will shop and therefore cannot guarantee the success of the traffic. If your affiliates’ traffic doesn’t convert into sales, your partners won’t make money. If they don’t make money, they’ll probably pull your links. If they pull your links then you have to win them back which is usually not very easy.
Unless you can ensure someone will shop, which nobody can unless it’s something required by law and you are the only provider, then there is no possibility to guarantee results from an affiliate program. You can however take past performance and predict based off of conversion rates by the type of site and affiliate, however these tend to be somewhat inaccurate. You also have to hope the partners can grow and scale their own sites if you’re predicting a larger increase.
Partners Quitting Affiliate Marketing
The most common thing that I come across in a lot of older programs when doing affiliate program audits are affiliates that quit affiliate marketing. The client wants to win them back but they either changed monetization strategies or they got rid of their sites. (I do have solutions for partners that quit the channel that we use with the programs we manage.) If you’re running into the second type where they got rid of their domain name and you could get them to sell it too you, you probably cannot recreate their content and probably not their following.
You can find the backlinks and use them for some SEO benefit, but the work will probably not be worth the benefit from an affiliate marketing standpoint.
You have to remember, the majority of affiliates are probably not living off of their affiliate income. They could be doing it part time, for fun or they had a blog and got tired of it so they got rid of it or are no longer updating it. When their interest in their site or the channel dies, so does their site. Even if they sent you thousands of sales, if they no longer care, had their site get wiped and don’t want to try to rebuild it, etc… there’s little to no chance that you can bring them back. It is possible, but the effort may not be worth it if you cannot recover the traffic and sales. This is where you need to have an SEO and analytics consultant come in and evaluate all of these partners. They can help determine the potential gains for your company based on what’s available and previous data.
You can try buying the old domains, but unless you can re-create their audience, get their rankings again and also get people to shop through the links, you cannot guarantee the same success from the old partner or URL. This also means that you cannot guarantee success, growth, reactivation or forecast the program to scale based on inactive or partners that pulled their affiliate links, got rid of their websites or decreased in volume.
There are plenty of other reasons why nobody can predict or promise results for an affiliate program. However the above should be enough. It is a channel where nothing is controlled by your company. You don’t own your affiliates’ websites, you cannot control where they rank in the search engines, if social media sites will continue to show them and you cannot control how their traffic will interact with your own website. Because of this, it is impossible to guarantee results from an affiliate program.