Working with many of our clients to establish affiliate marketing programs, Anova Group has observed a segment that simply drains your profit margins. These are affiliates offering marketing programs involving paid search. Many of these marketers are simply playing arbitrage with keywords that are easily managed internally. For example a client ‘Acme Electronics’ signs up with one of these affiliates and the affiliate starts campaigns on keywords such as ‘Acme Electronics’, ‘Acme Electronics Store’, etc..
The problems with this model are many. First your organic position on your company name will already be high so you can get these customers to your site for free. Secondly, because of high relevance, these keywords will cost you virtually nothing and certainly less than the 10%+ you will be paying the affiliate. Because the visitor is already searching specifically for you, these keywords tend to have high conversion rates that make them attractive to affiliate marketers looking to make a quick buck.
To avoid this pitfall, be sure you understand the business model of the affiliates you work with. Find affiliates that publish content relevant to your targeted customers or email marketers that have lists of customers in segments you are targeting. Finally, perform periodic searches on you domain/business names to ensure that no affiliate is unscrupulously bidding against you for traffic that you are already receiving.
Posted by Randy Higgins
