How do affiliate programmes work?

Before we dive into the how, let’s start with the what. What is an affiliate programme? 

An affiliate programme is where all of your affiliate activity is housed, everything from commission management and publisher recruitment to sharing assets & promotional material is done through a programme. Your programme essentially acts as the middleman between your brand and the publisher, facilitating the partnership through reliable tracking, reporting and providing a comprehensive user interface for you to build your relationships on. 

This programme is opened through a network, and there are many different networks to choose from, (such as AWIN, Rakuten, Impact, Webgains to name just a handful), depending on different factors such as the size of your brand, your budget and your general preferences. Each network has its own USPs across tracking, attribution models, dynamic commissioning, reporting capabilities etc, so it’s important to do your due diligence when selecting a network based on what is most important to your brand. 

So, we’ve established what an affiliate programme is, you’re now wondering, how does it actually work? This blog will unpack everything you need to know about how affiliate programmes operate and how they are used. 

Creating an affiliate programme

First things first, you need to create and launch your programme, once you have chosen the right network for you. Creating your affiliate programme includes the following; 

Implementing affiliate tracking

There are varying levels of tracking you can implement; the standard set up is needed for all brands, but additional, optional integrations include tracking at product level and customer type, as well as voucher code usage. Some networks make it really simplified for brands, making it an efficient integration. For example, AWIN’s Advertiser MasterTag enables brands to implement everything needed all at once, through a lightweight JavaScript tag that is placed on every page of the advertiser’s website. This tag enables cookieless tracking, as well as supports additional dynamic features such as voucher code attribution and product tracking.

It’s worth mentioning here, the buzzword that is attribution. Affiliate programmes are typically set up on a last-click attribution model, whereby the credit is given to the last interaction the customer had before making the purchase. Whilst last click is the most popular attribution model, some networks offer brands the flexibility of having a multi-touch attribution model, offering varying amounts of commission based on their influence in the sale or a first click attribution model, crediting the sale to the first referral (most commonly used with upper funnel partners such as influencers and bloggers). 

Setting commission rates

When deciding your commission rates, you should consider your brand’s budgets and product margins as well as review the competitor landscape to understand the rate/s that are going to work best for you. Often brands will offer a slightly lower default commission rate to allow room for increases with specific publishers when running exposure. Most networks have dynamic commissioning capabilities, allowing brands to set up varying rates based on customer type, product type, basket value etc. 

Outlining terms and conditions 

This is an important step in the programme launch process as you need to make sure your T&C’s are clearly stated, to avoid any publishers promoting your brand in a way that doesn’t align with your guidelines. These T&C’s need to cover everything from your branding, your PPC policy, your validation period, your stance on voucher code usage to your commission rates and your preferences on publisher type. 

Providing creatives (including banner images and product feeds) 

It is dependent on the publisher type, but the majority will require creative assets when onboarding your brand to their website and when running any additional exposure campaigns. It’s important to update these quarterly to keep them fresh, especially if your product focuses change seasonally. Networks encourage brands to upload a product feed to their programmes as some publishers such as CSS partners and shopping directories will need this to enable their activity. Feed management tools such as Shoptimised have product feed templates for various affiliate networks including AWIN and Webgains, making it really simple to create a compatible feed for your programme. 

Creating a welcome message & brand description to help your publishers get to know your brand better

Lastly, you want to make sure that your programme is welcoming to any new publishers wanting to join. Your welcome message should include an introduction to your brand and then go on to cover what you are able to offer publishers within your partnerships, such as commission levels and incentives, this is what they are most interested in as they need to evaluate if it’s going to be worth their time promoting your products / services. 

Publishers’ recruitment & publisher approvals 

Now your programme is live, you are ready to begin recruiting publishers to join your programme. This can be done through the publisher discovery tools on your network, whereby you can search publishers by name or promotional type and it will display their profile, detailing their websites, how they work with brands and sometimes a media pack, you then have the option to invite them to your programme. Once your programme is live, you will be findable on the network for publishers and so you will receive a lot of requests to join. It’s important to vet each publisher’s application to decide whether they are compatible with your programme’s goals and preferences, as well as having brand alignment. Publishers can then be approved or declined accordingly, based on your decision. Once approved, they are then joined to your programme and have access to your bank of creative and product feeds and will be able to contact you regarding optimisations. Most importantly, they will be able to create affiliate deeplinks with your programme ID in order to start promoting your brand.

New partnerships

Once you have opened up conversations with partners, discussed ideas and agreed commercials, the onboarding of your brand to their website/platform begins. This is where you share necessary creative material such as bespoke banners, brand copy and discount codes if needed (in some cases, these will be codes exclusive to the partner) and the partner then builds your merchant page on their end, then embeds the tracking links. When a publisher signs up and joins a network, they are given a unique ID. This ID is then embedded into the referral links that the publisher uses to promote the brand’s products/services. When someone clicks on this affiliate link they are taken to the brand’s website, and because the brand’s ID as well as the publisher’s ID is embedded into the affiliate link, it enables attribution to both parties, enabling accurate reporting and commission payouts. Once the partnership comes to life, through the use of these unique tracking links, you will be able to review performance on your programme, including every click and conversion. If dynamic tracking is set up for customer type, once a publisher drives a conversion, you will be able to see if this customer was brand new to your website, or returning, providing an additional layer to your reporting. 

Once new partnerships are in full swing, this is where you begin to optimise. Each partner has their own way of providing additional exposure for brands, this could be prominent placement on the homepage of their website, an email newsletter to their subscribers or a push notification to a targeted pool of users. These optimisations typically come at an additional cost to the standard commission model, depending on what the exposure is, this could be a fixed cost or an agreed CPC budget. 

Reporting

Once your publishers become traffic active and then revenue active, you can utilise your network’s reporting dashboards to review performance and measure success. Each network has different levels of reporting capabilities, for example Impact offers competitor and sector insights and AWIN has journey path and publisher incrementality reporting. The beauty of the affiliate channel is how measurable it is and so the key to a successful affiliate programme is utilising data as much as possible to inform strategic decisions. 

Commission payment and validation process

The last step in the process when a sale is tracked, is validating this accordingly, and then the commission payout. Through your tracking set up, the sale will automatically track at the commission rate that is set up in the network for that partner, you just need to validate this sale took place and then confirm if it is fulfilled or whether it has been cancelled/returned. This process is usually carried out around 30 days after the sale took place, sometimes longer if your brand’s returns window is longer. In the case of a cancelled or returned order, you can decline commission on that particular sale, in the case of a part return, you can amend sale values in the network to reflect the new order value, which will then update your owed commission accordingly. This process makes your affiliate programme operate at a cost friendly, low risk model. 

To conclude, now you know what an affiliate programme is and how it works, why not try it for yourself? Opening an affiliate programme is a great way of diversifying your digital marketing mix and increases your chances of acquiring new customers whilst nurturing and building loyalty amongst your existing customers.

If you’d like to hear more about affiliate marketing and how it could amplify your current marketing efforts, please get in touch. 

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