Affiliate payment structures or compensation models

There are many affiliate payment structures with multiple abbreviations for each;

Revenue Sharing; this is the most common payment structure in the affiliate market. Most New Zealand affiliate programs also use this structure. Here the affiliate receives a percentage of the revenue which is generated from traffic they have sent to the website. The levels can range anywhere from a few percent up to 50 percent depending on the online industry the affiliate is working, how much traffic they can send through and how good their negotiating skills are.

PPC; Pay-per-click is the method of choice for programs such as Google Adsense and most other search generated programs.

CPA / CPL; Cost-per-acquisition / Cost-per-lead are more common for high level affiliates who have been working with an affiliate program for some time and have shown the value of their traffic. If an affiliate program is offering CPA / CPL as an initial payment structure it will usually mean the level is reasonably low and would only be raised with proven traffic.

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Finding the right creative

An affiliate program is only as good as the creative offered to promote it. By the term creative we are referring to the tools used to promote the products which can be banners, text, emails or any other form of advertising you may find on the internet. A majority of programs still have a preference towards graphical banners (e.g. 468×60’s) as the core means to promote their products. The main exception of course is Google Adsense and the other PPC programs (e.g. Yahoo! Search Marketing or the new Microsoft Adcentre) who are mostly based on textual creative. Google is coming out with more interactive advertising every month however it is our belief this will, in the sort-term at least, continue to be anciliary to the main textual advertisements.

Many programs will have directly in their terms and conditions that you can only use their own adverts to promote their products however this is usually a rule that is broken regularly. A program is not about to turn away revenue from an affiliate if they have spent time creating their own adverts (text or banners) for the product. The only times a program is most likely to use this section of their agreement is if the affiliate is using objectional (or sometimes badly designed) creative.

If the product you’re looking to promote does not have the advertisements you need then the first option would be to develop them yourself. If you would like to stick directly to the terms and conditions (or at least would like to show yourself as a good affiliate) it is a good idea to send the creative to the manager of the affiliate progam for authorisation to use in promoting their product. The secondary option is to request specific styles of creative which suit your promotions from the program itself. This has varying success depending on how much revenue you generate for the program already, who is looking after the program and how much time is dedicated to specific creative.

Overall the key is to use creative that suits your site, not just creative that the affiliate program believes is the best for their product.

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Affiliate Contracts

The most important thing in agreeing to any contract, whether it is an affiliate contract or any other one is to read and understand what you are agreeing to. Affiliate contracts are no different to this standard rule even if it is not usually something which you can negotiate.

Affiliate contracts are inevitably stongly weighted against the affiliate as it is the programs themselves who write the contract. The normal course is to either agree with the contract or not promote the program. I have not yet come across a program which has agreed to adjusting its standard terms and conditions unless the affiliate concerned is a super affiliate who is effectively opening a white-label of their site.

That said your main decision is to not promote the program and with the myriad of different affiliate sites which you can promote (admittedly this is less in the New Zealand affiliate market) you should still be ready to read the conditions and understand that you do not want to agree to them nor promote that site.

Over the course of the next few months I will endeavour to list the main stumbling blocks which affiliates find in their contracts, usually when everything goes wrong and they were not aware of their lack of rights.

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Working with Affiliate Managers

One of the major theme’s you will find in the work ethic of successful affiliate managers is the ability for them to work one-on-one with a wide variety of people and personalities. Affiliate management, like most management, is less about finding the perfect people and more about connecting with people, building a relationship and finding common ground which will ride through difficult issues. Affiliates can be from any walk of life as many affiliates have started out on the internet building sites outside of their standard working lives and then progressed onto becoming full-time affiliates due to their successes.

Affiliate managers cannot always affect the surrounding business (e.g. customer support) but they will usually have a direct line of feedback to their fellow managers regarding what the market (you the affiliate) is telling them about their product or system. Feedback should always be taken as constructive criticism. If it is not you should question the affiliate program and manager you are working with and how they will treat you if further problems should arise.

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Super Affiliates

Affiliate programs are often broken into “super affiliates” and “affiliates”. The term super affiliate is meant to denote an affiliate who has significantly larger traffic than most other affiliates. Affiliate marketing traffic is similar to many industries with the age old 80/20 rule where 20 percent of the people bring 80 percent of revenue. The key here is to make sure the affiliate mangement team work with both super affiliates and affiliate in a positive way. Usually there are separate deals for super affiliates, often in a tiered structure, where the super affiliate who can bring in more revenue will also receive a higher percentage of that revenue. As long as the levels are not too wieghted towards the larger affiliates this can be a fair system for all involved and allows for a progression as sites grow. An affiliate program should still respect all levels of affiliates as it is through these initial relationships that smaller affiliates can be helped to grow.

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New Zealand vs Australia

A common theme among affiliate information and programs currently available is the joining of any New Zealand affiliate programs or information with Australian programs. This leads in many cases to the New Zealand programs staying in the background or generally applying all of the ideas behind the needs for Australian programs as completely applicable in New Zealand.

While New Zealand is understandably a small affiliate market on the global scale, with the large percentage of the population currently online it can be hoped that in time more programs will split their New Zealand information separately. This can only lead to a better facilitated New Zealand affiliate market.

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Affiliate forums

An excellent start when looking for affiliate programs to promote on your site is to join an affiliate forum. The forums will allow you the chance to both read what experience others have had with the programs they have promoted as well as the chance to ask questions about particular programs you are interested in.

There are many forums based for the US and UK affiliate markets but I have only found one affiliate forum for the New Zealand affiliate market which you can find here.

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Affiliate Program - Google Adsense, New Zealand

Most affiliates will already be aware of Google Adsense where a webmaster can setup advertising of keywords selected and bid for by advertisers attached to that network. In New Zealand this is probably one of the best forms of advertising available for your site as you can target the adverts directly to New Zealand based PC’s only. Even the currency for the payment can be made in New Zealand Dollars.

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A Few Good Options

There are more affiliate programs in New Zealand than I actually realised. CD’s, Books and DVD’s appear to be the option of choice for most of the people who are looking at making a bit of extra cash on the web however there are many SME’s out there that have found affiliate programs can help to build their business as well. It’ll be interesting to see how many sites I can actually find.

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Affiliate Marketing

Affiliate marketing will be a core topic we will be covering on this site as it grows in content over time. There are two directions to affiliate marketing, the marketing to affiliates who are part of your affiliate database or the marketing completed by affiliates who are promoting products. As the content for this site grows you will see articles based from both sides of the coin.

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