10 Tips For Turning Affiliate Programs Into Goal Mines

We’ve now looked at a number of popular affiliate programs for bloggers and today I’d like to finish off this series by giving a few tips that should help bloggers get the best results out of any affiliate program that they choose to run with.

1. Consider your Audience
It almost goes without saying - but it’s worth putting yourself in your readers shoes and consider what they might be looking for as they surf by your blog. Are they shopping for specific products? Might they be looking for related products or accessories? What would trigger them to purchase? Start with your reader in mind rather than the product. If you take this approach you could end up doing your reader a favor as well as making a few dollars on the side.

2. Genuine Recommendations and personal endorsements always work best
There are literally hundreds of thousands of products and services for you to choose from to recommend to your blog’s readers but making money from them is not as simple as randomly adding links to them from your blog. Your blog’s readers come back to your blog day after day because something about you resonates with them - they have at least some level of trust and respect for you and perhaps the quickest way to destroy this is to recommend that they buy something that you don’t fully believe will benefit them.
The best results I’ve had from affiliate programs are where I give an open and honest appraisal of the product - including both it’s strengths and weaknesses. The most successful affiliate program I’m involved with here at ProBlogger is Joel Comm’s e-book which I reviewed here. If you read the review you’ll see that I not only tell readers who I believe the book is for but I also mention those it is NOT for. In a sense I critique it. On a surface level one might think that this wasn’t a wise move and that I should have given a glowing review - however the sales that I’ve had through the program have proven otherwise. People want to know what they are buying first and even if they know a product has limitations they will buy it if it meets their particular need.

3. Link to Quality Products
We all like to make sure we’re buying the best products money can buy - your readers are no different to this and are more likely to make a purchase if you’ve found them the best product for them. Choose products and companies with good reputations and quality sales pages. There is nothing worse than giving a glowing review of a product only to send your reader to a page that looks cheap and nasty.

4. Contextual Deep Links work Best
When I started using the Amazon Associate Program I naively thought that all I had to do was put an Amazon banner ad (that linked to Amazon’s front page) at the top of my blog. I thought that my readers would see it and surf over to Amazon and buy up big - thereby making me a rich man. Nothing could have been further from reality - I was deluding myself.
I always says to bloggers that I’m consulting with that they should learn something from contextual advertising when it comes to affiliate programs. The secret of contextual ads like Adsense is that a reader is reading a post on a particular topic on your blog and when they see an advertisement for that same product they are more likely to click it than if they saw an ad for something else. The same is true for affiliate programs. A banner to a general page on every page on your site won’t be anywhere near as effective as multiple links throughout your blog that advertiser products that are relevant for readers reading particular parts of your blog.
So if you’re writing a blog about MP3 players and have a review for a particular product - the most effectively affiliate program that you could link to from within the content of that page would be one that links directly to a page selling that specific model of MP3 player. This is how I use the Amazon program today. It is more work than contextual advertising because you’re not just putting one piece of code into a template but rather need to place individual links on many pages - but I find that it’s been worth the effort.

5. Consider positioning of links
One of the things I go on and on about with Adsense optimization is the positioning of ads. I tell bloggers to position their ads in the hotspots on pages (like the top of a left hand side bar - or inside content - or at the end of posts above comments etc). The same principles are true for affiliate advertising.

6. Traffic levels are Important
While it’s not the only factor - traffic levels are obviously key when it comes to making money from almost any online activity. The more people that see your well placed, relevant and well designed affiliate links the more likely it is that one of them will make a purchase. So don’t just work on your links - work on building a readership. Not only this, consider how you might direct traffic on your blog toward pages where they are more likely to see your affiliate links.

7. Diversifywithout Clutter
Don’t put all your affiliate efforts into one basket. There are plenty of products out there to link to so there is no need to just work on one. At the same time you shouldn’t clutter your blog up with too many affiliate program links. If you do so you run the risk of diluting the effectiveness of your links and could disillusion your readership.

8. Be Transparent
Don’t try to fool your readers into clicking links that could make you money. While it may not always feasible to label all affiliate links I think some attempt should be made to let people know what type of link they are clicking on. I also think consistency is important with this so readers of your blog know what to expect. For example here at ProBlogger usually put a note beside or under affiliate links to simply let readers know that that is what they are. On my Digital Camera Blog I don’t do this because of the large number of such links make it clear by the text around the link that clicking on it will take them to some sort of shop or information where a purchase is possible (ie a link my say ‘buy the XXX product’ or ‘get the latest product on XXX’.

9. Combine with other Revenue Streams
Affiliate programs and advertising programs are not mutually exclusive things. I’ve come across a few people recently who have said they don’t want to do affiliate linking because it will take the focus off their Adsense ads. While there is potential for one to take the focus off the other - there is also real potential for both to work hand in hand as different readers will respond to different approaches. You should consider the impact that your affiliate links have on other revenue streams - but don’t let one stop the other.

10. Track results
Most affiliate programs have at least some type of tracking or statistics package which will allow you to watch which links are effective. Some of these packages are better than others but most will at least allow you to see what is selling and what isn’t. Watching your results can help you plan future affiliate efforts. Keep track of what positions for links work well, which products sell, what wording around links works well etc and use the information that you collect as you work plan future affiliate strategies.

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The Basics of Affiliate Programs

Affiliate programs have truly grown over the last several years to become perhaps one of the Internet's premier business models. However, new to affiliate programs, aren't familiar with all of the concepts and terms involved. Naturally, this can make it difficult to properly evaluate the hundreds of programs out there and decide which are best for you.

I would like to cover some of the basics, and define some of the common terms that are used when discussing affiliate programs. For those of you new to affiliate programs this guide should help you quickly get up to speed on how affiliate programs can make an excellent, and profitable, addition to your web site. Here are some of the more common affiliate program terms you'll likely run into, and their basic definitions:

Affiliate: An independent party that promotes the products or services of a merchant in exchange for a commission. Also an associate, partner, reseller, or referral partner.

Merchant: A company that has set up an affiliate program and has agreed to share a commission with affiliates who promote their web site, products and/or services. Also termed an advertiser, vendor, or simply referred to as an "affiliate program."

Commission: The income you receive for generating a sale, lead or click-through to a merchant's web site. Sometimes called a referral fee, a finder's fee or a bounty.

Affiliate Program: Used in a broad sense, an affiliate program is any type of revenue sharing program where an affiliate web site receives a portion of income for delivering sales, leads, or traffic to a merchant web site. In a narrow sense, affiliate programs are commonly considered those programs that use a pay- per-sale model like our own. Also termed associate, partner, referral, reseller, or sponsor programs.

Pay-Per-Sale: A program where you receive a commission for each sale of a product or service that you refer to a merchant's web site. Pay-per-sale programs usually offer the highest commissions and the lowest conversion ratio. Also referred to as Cost-per- Action (CPA for short) and generically as an Affiliate Program.

Pay-Per-Lead: A program where you receive a commission for each sales lead that you generate for a merchant web site. Examples would include completed surveys, contest or sweepstakes entries, downloaded software demos, or free trials. Pay-per-lead generally offers midrange commissions and midrange to high conversion ratios (since visitor purchases are not required for you to be able to earn a commission). Like pay-per-sale, pay-per-lead is also referred to as a Cost-per-Action or CPA for short.

Pay-Per-Click: A program where you receive a commission for each click (visitor) you refer to a merchant's web site. Pay-per-click programs generally offer some of the lowest commissions (from $0.01 to $0.25 per click), and a very high conversion ratio since visitors need only click on a link to earn you a commission.

Pay-Per-Impression: A program where you receive a commission each time that a merchant's ad or link is displayed on your site. Pay- per-impression generally offers the lowest commissions, but a nearly 100% conversion ratio since a visitor merely has to view the ad to earn you a commission -- and this often results in the highest earnings potential. Pay-per-impression programs are generally measured in CPMs (see below) and form the standard of banner advertising for larger web sites.

Conversion Ratio: The ratio of visitors from your site that are "converted" into a sale, lead or click, and go on to earn the you a commission. A conversion ratio of 5% would mean that for every 100 visitors to your site, 5 would click-through, complete an action and earn you a commission. Many factors will influence the conversion ratio, including how targeted the affiliate program's products are to your visitor's interests, the price and value of the products being promoted, the merchant's ability to track all sales, and the overall effectiveness of the merchant's web site.

Click-Through Ratio: The percentage of visitors who click-through on a link to visit the merchant's web site. Higher click-throughs are preferable although not always a great measure of success. Pay-per-click earnings are highly dependent on the click-through ratios. Click-through ratios can often be improved through a variety of means: by making links more visible to visitors, adding personal comments or testimonials about the product, or even reducing the number of links a visitor can follow.

CPM: The practice of calculating a cost per 1000 ad displays. It is used by programs that pay on an impression basis -- with the CPM rate being the amount you earn for every 1000 times an advertisement is displayed. For example, a $5 CPM means you earn $5 every time 1000 ads are displayed on your site. CPM can also be calculated for pay-per-sale, pay-per-lead and pay-per-click programs by using this formula:
Amount earned / (number of impressions/1000)
Calculating the CPM of affiliate programs can be an effective means of comparing the results over time from various programs -- allowing you to put more emphasis on the strong programs, and dropping the poorly performing programs.

Two-tier Commission: Two-tier, or multi-tier, refers to the practice of a merchant paying commissions to both the affiliate that referred a sale, lead or click, and the affiliate that referred that affiliate to the program. A descendent of network marketing, two-tier programs are generally quite legitimate and offer the merchant an effective means to promote their affiliate program quickly. However, be wary of any programs that try to charge startup or membership fees to join. These programs should be avoided, as there are hundreds of others that do not charge to become an affiliate. Some are simply pyramid schemes in disguise.

Residual Commission: Residual commissions refer to programs that provide affiliates the ability to earn an income, month after month, for referring a sale to a merchant. They are usually those that offer some type of service for which the customer is charged an ongoing subscription fee. Examples include web hosting, tele- communications, and ecommerce solutions. They offer an effective benefit to affiliates since the affiliate can earn income for an extended period, perhaps even years, from a single sale.

Tracking Method: Tracking refers to the way that a program tracks referred sales, leads or clicks. The most common are by using a unique web address (URL) for each affiliate, or by embedding an affiliate ID number into the link that is processed by the merchant's software. Some programs also use cookies for tracking.

Cookies: Cookies are small files stored on the visitor's computer which record information that is of interest to the merchant site. Despite concerns that some people have, cookies are in no way dangerous -- and can not be used to steal names, email addresses, phone or credit card numbers. With affiliate programs, cookies have two primary functions: to keep track of what a customer purchases, and to track which affiliate was responsible for generating the sale (and is due a commission).
Be especially wary of programs that only use cookies since they have many inherent limitations: the user can turn them off, they expire after a certain date or time, and they can be deleted off the visitor's computer. Most programs use either unique URLs or affiliate ID numbers in conjunction with cookies to track properly. Cookies can then be used to give the affiliate credit at a later time of purchase, even if the visitor returns to the merchant's site as opposed to the affiliate's unique URL.

Banner Networks: A whole bunch of networks have popped up to better facilitate the pay-per-click concept. Most pay-per-click programs are part of a network where the network acts as middle- man between the actual advertisers and the affiliates which run the ads. And for this service, the network takes a percentage of the overall revenues.

Third-party Administrators: The best way to get starting in Affiliate Marketing is to sign-up with one or more of the different Affiliate Networks. Similar to banner networks, an increasing number of companies have sprouted up to help merchants facilitate their affiliate programs. Most act as consultants and software providers to merchants, and thus allow them to cost-effectively outsource their affiliate program operations. For affiliates, the networks often offer simplified registration, standardized commission tracking and reporting, and even consolidated commission payments.

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