In all honesty I shouldn’t have to say this but I am shocked and surprised by the amount of times affiliates talk to me about not getting paid from merchants in a timely fashion, its terrible! It’s not that much of a surprise to hear affiliates say they haven’t been paid by merchant X for 5 months, that August!

Paying your suppliers on time will ensure a longer more profitable working relationship, nowhere is this truer than the world of affiliate marketing where there is still a whole host of successful sole traders working from their spare room.

Let me give you a scenario. A search affiliate starts a campaign and spends a large amount of money driving clicks to a site they have built around your brand, the end of the month comes and Google charges this affiliate for those clicks. Meanwhile someone has validated a percentage of the sales generated via the network, the affiliate is happy as they have made a profit. Great. However the network will not release that commission to the affiliate until merchant x has paid them for those sales, fair enough I guess but if merchant x isn’t paying for those sales for 5 months, it means the affiliate doesn’t get paid. It really isn’t rocket science.

Now, although the affilliate is happy with their profit do you honestly think they are going to invest more money or time into you and your brand without being paid? Of course not, so the affiliate pauses their campaign or promotes someone else.

All businesses at one time or another go through cash flow problems, it’s understandable, your affiliates are your online sales force and in lean times are needed more than even, it might be a good idea not to upset them!

Gossip has been rife over recent weeks and chatting to a few industry contacts a whisper of a merger between two well know networks seemed to be the talk of the town.  Today’s news that Digital Window has acquired the Newcastle based Perfiliate Ltd, better know to us as Buy.At, ended that speculation. This acquisition signals the formation of the UK’s biggest performance based marketing group. AOL purchased Buy At in 2008 for a whopping $125 million CASH!

What does this mean for affiliates?

An official statment sent to all affiliates signed up to Affiliate Window reads:

As existing affiliates of AW, you will see no change to the day-to-day service we provide. It will be business as usual, with the same desire to provide industry-leading service and technology to all our affiliates. There will be no change to the frequency or structure of your payments.

This deal will allow us to leverage the rich expertise in both businesses to deliver exciting and ground-breaking solutions for the market at a much more rapid pace. Digital Window solutions such as ShopWindow, Darwin, AWin Analytics, Snoopy and Agent99 will, over time find space alongside trusted Buy.at solutions like Offer Central, EventEngine, ProfitPlus and FlexTrack.

Exciting times. Watch this space.

Most of you reading this will probably be thinking, so what, I wouldn’t touch IE with a barge pole, no big deal. Millions of people in Europe are not quite as internet savy and will use IE as standard. It will never have even crossed their minds that there is an alternative internet browser out there. This ruling has been on the card for a while now and is probably why we have seen Google Chrome adverts everywhere.

All questions I wish I had the answers to.

The focus of affiliate marketing is changing and as merchants become more switched on, questions about quality are being asked more and more. The last click wins model and multi channel attribution models are among the hot topics that will continue to be debated during 2010.

How does affiliate marketing solve the problem of quality traffic?

Well, what is quality traffic?

This is down to the merchant to decide what they deem as quality and how they want to measure this and reward accordingly. Some merchants simply look at the bottom line i.e. what do I spend and what do I make? If one number is higher than the other then its working.

Other normally larger merchants have new customer targets; they want to ensure that any advertising or promotion results in new customers and have strict CPA targets.

Some merchants analyse every single channel and touch point to determine its success and have the resource and knowledge in-house to manage this.

The first stage is surely to decide what you as a merchant determine what quality is to you. There is no point in a traditional network developing their tracking to reward affiliates for quality if it’s a one size fits all solutions. The network would have to determine the quality metrics and those metrics may not suite a large number of merchants.

Amazon’s affiliate programme has something called a session cookie which does exactly what is says on the tin, expires when you close your browser and end your current session. Arguably Amazon has done this from a quality point of view. If the affiliate has done a good job in the presale then as soon as someone lands on the Amazon site they should have their credit card in hand ready to buy. If not then that affiliate has not driven quality traffic and they are not rewarded.

EBay famously changed their commission model to reward affiliates for quality over quantity and no doubt many merchants would like to do the same. The eBay payment model is a CPC model that rewards affiliates more for higher quality traffic. The quality of the traffic is assessed by looking at both short term and long term value to eBay.

In a nutshell if someone lands on your affiliate site that promotes lawnmowers and then clicks through to eBay and purchases a bike, this is seen as less quality traffic than if someone had purchased a lawnmower.  There are a number of other factors involved in eBay decided what it deems quality and a great resource can be found here.

Ebay have determined there own quality metrics and this has been possible due to them moving away from a traditional network and developing their own in house network, the eBay Partner Network. Not a luxury all merchants can afford and it is why we, as industry must take measures to ensure quality can be measured.

Be a bit more open.

That’s it really, not a revolutionary concept by any means but something I feel affiliates need to understand and embrace. An agency or network is here to help grow their client’s affiliate programmes and for that we need affiliates. We are not here to make life difficult or hard for affiliates, the complete opposite, we are here to help and ensure you are getting everything you need. In order for an agency or network to do this properly we need to understand your business model and ascertain where your sales and traffic are coming from. We can then work with you to optimise your campaigns ensuring better results for everyone involved.

For this to happen successfully affiliates need to meet us, speak to us and general work closer and be open and honest with the agency or network involved. It’s not good enough for an affiliate to say they don’t know where their sales are coming from for a merchant. Regardless of whether or not you own 2 or 2000 sites merchants have a right to know where their brand is being represented online.

The affiliates who seem to receive all the exclusive deals, promotions and extra commissions are the affiliates that understand the importance of transparency. In any business being open and honest is the only way to ensure a log last business relationship for all parties.

Today is a good day to be working in online advertising, it was announced that online ad spend now accounts for 23.5% of advertising spend overtaking TV for the first time. While this is  great news for anyone working in online its not all good, it is also reported that total ad spend in the UK is down a massive 17%.

No doubt the last 12 months have been tough for us all (especially if you are in TV) but these figures are a positive indication that online is holding its own, and actually still growing.

Guy Phillipson, chief executive of the IAB, said: “Internet advertising has beaten all expectations to achieve growth in the most challenging market conditions.”

TV ad spend has fallen by 16.1%, according to the figures from the Advertising Association and WARC. Historically TV has been the ad man’s preferred method of advertising, as well as the largest,  but has now been overtaken but what six years ago was the smallest.

Why is this?

Well one of the main reasons must be down to measurability, something that you still cant be 100% sure of with TV and traditional press advertsing.  With search, display and affiliate marketing traditional marketers are waking up to the level of measurability that these forms of advertising allow them. Being able to analysing the return on investment, especially in these turbulent times, is one reason why online advertising will no doubt continue to grow.