How does affiliate marketing work?
The merchant gives each affiliate a unique link so they can track who was responsible for a sale. The link will usually look something like this:
When someone clicks that link, a small file called a cookie gets stored on their device.
An affiliate cookie does two things:
Here’s an example of how this works.
Imagine that a reader visits your post about the best winter jackets. They click on one of your affiliate links, leading them to a product on Amazon.
But they realized they have to pick up their daughter from school. So they leave their house, pick up their daughter, have dinner, and then finally go back to Amazon where they find the product again.
Since they’re already shopping on Amazon, they decide to purchase some ski gear too.
Here’s the good news. Earlier, they clicked on your affiliate link and a cookie was stored on their device. Because Amazon has a 24-hour cookie duration, you get compensated for both the winter jacket and ski gear—even though you didn’t promote the latter.
How Can an Affiliate Marketing Agency Help My Business?
There are several ways.
Agencies use the connections they have in your industry to identify the best affiliates for your business.
They also work with numerous clients in different industries, so they offer a wealth of knowledge. They hold the keys to complicated topics like attribution, incrementality, and the value of individual publishers. In some cases, that might even include knowledge about some of your direct competitors.
Affiliate marketing agencies have access to social media influencers, content creators, and other unique and creative types of partnerships. This allows them to design clear and focused marketing solutions for your specific business and cater to your unique needs.
What to Look For When Choosing an Affiliate Marketing Agency
Your agency should work with clients in your industry and understand your key demographics and audience. Look at the clients they currently work with. Are they recognizable brands? Are they your direct competitors?
It’s vital that the agency has a track record with other brands and businesses whose focus aligns with your own.
Make sure both parties have the same goals in mind. Some agencies have a benchmark for success to deliver X% month over month growth. Others measure success by bringing in a specific dollar amount per month.
Decide how you want to measure your own growth and find an agency with the same ideals.
Last but not least, make sure they can provide your desired level of analytics and communication. Think about how much time they will be able to dedicate to your account.
Some affiliate marketing companies will devote one account manager to your company. Some may assign an entire team to your account alone. Others may only provide one or two account reps that handle dozens of accounts at the same time.
Before you decide who to hire, think about how much time and consideration your account will get.
What Questions Should I Ask Before Hiring an Affiliate Marketing Agency?
Before you hire an affiliate marketing agency for outsourced program management (OPM), consider these nine key questions to determine if they are the right partner for you.
You’ll need some level of personal attention, so make sure your account manager won’t be overwhelmed with too many other accounts. Remember that the agency is running a business too, and they are going to put their resources towards clients that make them money. If you’re paying a small monthly amount, you will get a small fraction of an individual account team’s attention.
It’s essential to know how hands-on or hands-off you’ll need to be. For instance, you may want an agency with formal processes in place, or you might prefer one that offers a bit more flexibility.
A successful affiliate marketing agency will provide you with a 90-day plan, clearly laying out a successful path for your program as you launch your engagement.
There are benefits and downsides to hiring an affiliate management agency that works with your competitors. Make sure you understand how they’ll approach this if the issue arises.
Some agencies may provide you with examples of marketing campaigns they’ve done with prior clients. Others may not.
To make sure you’re hiring the right agency, look for case studies or online reviews that speak to the quality of their work and expertise.
Always ask for references and the ability to speak to existing clients. Good agencies should be able to provide multiple options.
It’s always good to know if your account manager/account team will be working remotely or in house.
Streamline has found incredible success handling complex campaigns by staffing their account teams in-house in the same office.
With this question, you’ll get a better sense of who they are currently working for. In other words, do they have experience with large enterprise brands, small businesses, or high growth startups?
Make sure they are familiar with your current affiliate network(s). If they plan to launch your program on a new network, ask how familiar they are with that network.
Don’t allow yourself to be the guinea pig they use to test out a new network or technology.
You should be cautious when working with an agency that charges solely based on performance. Agencies who work entirely on performance are often misaligned and can lead to poor behavior by the affiliate managers.
Most agencies in our space work with a fixed retainer plus a performance on revenue so they are aligned in driving growth for their clients. At Streamline, we use the performance fees of our clients to contribute to a profit-sharing pool so your account team shares in the success of your campaign.
Choose an agency with integrity.
Before you hire an agency, ask what their policies are regarding working with affiliate software, trademark search monitoring, and coupon/voucher auditing. And make sure that they have a system in place to monitor anyone who violates the agreement.
Do I Need to Hire an Affiliate Marketing Agency?
The short answer is yes.
Their connections with various companies and different audiences and marketing channels can benefit you. You won’t need to build your own relationships from scratch.
However, you should avoid agencies that work strictly on a performance-based system. Disreputable affiliate agencies have, at times, been known to skew the metrics to make their performance seem better.
Reputable firms, like Streamline, structure things a little bit differently. Streamline has a base retainer fee and then adds performance incentives on top of that via a profit-sharing model.
This innovative approach makes the success of an affiliate program crucial to the bottom line of both the agency and the company they’re working for.
If you handle your affiliate marketing program on your own, you are starting from scratch with no historical data or insights into which partners perform well in your vertical.
You would also only have access to your own metrics. You would never have access to the data and insights of a well-established agency.