What's Wrong With Affiliate Marketing

The Affiliate Program Tip Blog asked an interesting question (the title of this post), and has been posting a series with answers from different people. I submitted my answer (below) so now we'll see if I merit the free t-shirt.

What’s wrong with affiliate marketing:

1. Far too many affiliates don’t add any real value – they have ugly sites without significant content – and just exist to get their commission because they managed to jump in front of the transaction via SEO/SEM skill, luck, or some other niche targeting or marketing method. This obviously isn’t true of all affiliates, there are excellent affiliates who truly add-value and/or have a real existing client-base that they’re rightfully getting paid to introduce to the merchant. But the garish / no-value-add affiliates outnumber the other 10:1 or more, and they bring the image of the whole business down in the eyes of marketers and customers.
2. Most merchants don’t give affiliates enough tools and information to do a good job merchandising their products or adding value. They run programs assuming that all affiliates are just going to slap up the (often badly designed) banner ads – thereby encouraging the type of affiliates described above. Investing in richer content to share with affiliates, better creative, and advanced tools like web services needs to become the baseline, and more merchants (and affiliate networks who can afford to invest in these tools) need to go beyond the baseline.
3. Neither side really treats it like a sales channel. If merchants thought of their affiliates as part of their sales team the quantity and frequency of information flowing out of the company would increase by 3-5x. They would communicate positioning, competitive issues, and work to educate their sales team on both what they’re selling and how to sell it. If affiliates acted more like members of the sales team they’d work to fully communicate the positioning of the products they represent, hit their marks in terms of when promotions were supposed to stop and end, find a way to add value for their prospects and to gather feedback that the merchant could use to improve the products or the business. Elements of all these behaviors exist here and there in the affiliate world, but by-and-large the relationships feel a lot more like advertiser-publishers (you distribute that and if anyone clicks on it I’ll pay you.)

Despite all of the above, affiliate marketing works to the tune of hundreds of millions of dollars. This means it is a good business for just about everybody, and despite the comments above I believe anyone sending traffic is earning their commissions and providing great value to their merchants. But imagine how large the affiliate market would be, and how much respect it would have in the larger world of marketing, if most affiliates added real value to their customers (beyond pointing them to the merchants), if merchants enabled affiliates to really promote and fully merchandise their products, and if affiliates were treated like star salespeople, and acted like stakeholders in the businesses they represent. The affiliate market would quickly grow to many times its current size in terms of both dollars and respect.

Posted by Craig Danuloff at May 28, 2005 04:24 PM