Affiliate marketing is meant with performance-based marketing channel. The direct selling cost comes into existence only when a lead, transaction, or other pre-defined activity takes place. This is the reason affiliate marketing has lowest cost-per-transaction ratios when compared to all other digital channels.
This low cost perhaps is a reason that retailers are not able to manage their affiliate ad spend properly. This usually happens because of some misconceptions online store owners have in their mind about the affiliate marketing. And these misconceptions are as follows:
Misconception Number 1:
More Affiliates Means More Money:
Online retailers believe on the number of affiliates. But in real they must have to focus on the affiliates how are capable of actively driving the traffic rather focusing on the number of affiliates.
Misconception Number 2:
Multiple Affiliate Networks Means More Money
The majority of retailers believe that by using additional affiliate networks, they would be able to generate more revenue. But in real, there is no shortcut to growing an affiliate marketing channel. Rather, using multiple networks, is more complex to manage.
Although using multiple networks have certain advantages like different networks have different tools. But this does not mean that more affiliates bring immediate growth in revenue.
Misconception Number 3:
Launch An Affiliate Program And Sales Will Roll On
Launching an affiliate program is not that easy. It requires a lot of efforts. A retailer has to integrate and need to test tracking technology on his website. He is required to set structure of commission, the process of payout and development of creatives etc. Setting up entire process needs time and efforts both. Here, the majority of retailers got surprised when after one month of getting through the entire setup process, no revenue got generated.
Retailers do not understand the difference between the affiliate marketing and other online marketing channels. Other online marketing channels follow the aforementioned setup steps. Whereas in affiliate marketing you need to work with actual partners whose needs may be diverse or constant in nature like bloggers who need information to write a post, deal sites that need up-to-date promotion data and collateral, updated list of bestselling products and brands etc.
In other words, you need to maintain regular communication with your affiliates and they act as a part of your sales team. So, affiliate program needs your ongoing efforts and these efforts will define your success rate.
Misconception Number 4:
Coupon Sites Adds No Value
Some retailers believe that coupon sites do not add value to existing site traffic, while some believe that coupon sites help with conversion. In real, the value of coupon-site traffic varies from retailer to retailer. For some retailers, coupon sites bring very few new customers while this is vice versa in another case.
So, the best way is to examine own data on various metrics. With the help of these metrics decide the value of coupon sites to the affiliate program.