Marketing Tactics That Could Cost Nothing (But Still Need Effort and Knowledge)

I caught this article a couple days ago in Forbes mentioning affiliate marketing and also Pinterest (I just wrote about regarding affiliate tactics for Pinterest). The article touches on affiliate marketing as a marketing tactic that costs almost nothing to pursue:

With affiliate programs you upload banner ads or product feeds that bloggers and other sites can use to promote your brand

The author stresses that set-up fees for Shareasale in particular are very low (and they are), and that merchants only have to pay for results/sales (which is true). However, I want to comment on the idea that starting and managing a successful affiliate program is neither both easy (for the unexperienced) nor “free”.

There are basically two ways you can kick-off and grow a successful affiliate program. I stress the word successful, because so often I see a merchant jump into affiliate marketing thinking that a program can run on “auto-pilot”, and that it doesn’t need a serious time and effort investment. Their program typically lingers with a few affiliates generating sales here and there and at some point becomes a prime target for attack by trademark hunting parasites. I digress, so let me get back to the two ways to kick-off a successful affiliate program:

1. A merchant can take the time and put forth the effort to learn the affiliate business; find and recruit good affiliates; encourage and motivate those affiliates to put effort into promotions; and police the program for harmful, non-value adding affiliates. They can do this themselves, and take time and attention away from their core businesses, or they can take on the extra overhead and cost of hiring a person in-house to run the program. More often than not, if they do hire in-house, that person is given more general marketing responsibilities in addition to managing the affiliate program. This takes us back to the key point about time/effort being taken away either from the affiliate program, or from other key marketing responsibilities.
   
   
2. A merchant can hire an outsourced affiliate program manager, someone who is completely focused on the task of growing an affiliate program, has a great deal of experience in the industry and has built up the knowledge and industry contacts to better lubricate the whole process of growing an affiliate program.

I’m sure after reading the above, you can see which method I would encourage!

In addition to the time and effort investment (although not capital, but definitely not free) in an successful affiliate program, there are also a few capital costs to be aware of. Some examples:

1. Tools and banners must be created for the affiliate to use to promote your program (graphic design, programming, content writing).
2. Very often in the high selling season, larger affiliates will require up-front “placement” costs in addition to the commission on a sale.
3. Bonuses, contests and affiliate promotions should be funded to help better motivate affiliates and bring your program up to the top of their priority lists.
4. If you choose not to work with an OPM, there are other tools such as recruitment tools and/or compliance monitoring tools that might have to be purchased to make sure your program keeps a healthy flow of value-added new affiliates.
5. Sometimes it might be necessary to pay advertising costs to actually advertise the affiliate program itself.

These are just a few costs to give you an idea. However, all that being said the costs are measurable, and it’s easy to measure exactly how much you’re putting into the program and exactly how much value you’re receiving from the program. It’s quite a bit easier to measure this precisely as opposed to running radio ads, or ads in a newspaper or magazine.

Affiliate marketing can be a great value add for your business. That’s why almost every major and even mid-major only retailer runs and promotes an affiliate program. However, don’t jump in blind with the idea that it won’t take an investment in time, effort and capital. Just like any new business venture, minimal input will equate to minimal results.