This is the second half of a two-part guest post from Geno Prussakov, founder of AM Navigator agency and Affiliate Management Days conference. Check out the first half here, where Geno introduces his first 10 considerations for publishers looking to join an affiliate program. We wrapped up the first half of this list by underscoring the importance of analyzing these criteria holistically, as it is never about any one of these factors but always about whole “bouquet.” The criteria are always interrelated and interdependent. Today we’ll start where we left off, with criteria #11.
11. Average Order Value (AOV)
This metric is a sum of all affiliate-generated orders referred over a given period of time, divided by the number of orders. The AOV goes into your “how much will I earn” formula/calculation, and it is always important to obtain this piece of data when you compare one advertiser’s affiliate program to another.
12. Conversion Rate
This is one of the most important metrics to factor into earnings potential. For example, let’s take a small advertiser that pays a 15% commission on all sales, versus the more recognizable NFL Store, which pays 6% commission. If we assume a 2% conversion rate (CR) for the smaller merchant, and take into account that the NFL Store’s conversion rate currently exceeds 9%, we will see the following happen on 1,000 referrals (assuming an equal average order value of $50):
1,000 visitors * 2% CR = 20 sales
20 * ($50 AOV * 15%) = $150.00 commission
1,000 visitors * 9% CR = 90 sales
90 * ($50 AOV * 6%) = $270.00 commission
Conversion plays an extremely important role in the formation of your ROI. Additionally, the AOVs are generally higher with merchants who convert this beautifully.
13. Reversal Rate
Ask advertisers about this one, clarifying that you need this data to evaluate the viability of a prospective partnership. This metric tells you the average rate at which affiliate transactions (and consequently commissions) are reversed. Whenever an advertiser is open to disclose this information upfront, you’re off to a better start.
14. Earnings Per Click
Many affiliate platforms disclose this metric before you join. Keep in mind that in many cases, the EPC figure you see is tied to 100 clicks sent from an average affiliate. So if you see an EPC of $27.49, know that this is the average amount affiliates earn on every 100 clicks referred.
15. Terms of Service
I polled affiliates to see if they actually read program agreements prior to applying. The largest group (38%) said “rarely,” 14% replied “sometimes,” 19% “often,” and only 29% replied “always.” Sobering statistics! Yet elements like commission recurrence and promotion restrictions can be found right in the merchant’s TOS, and shouldn’t come as a surprise when they cancel a commission due to “invalid” or ”unqualified” sales/leads.
16. Cookie Life
Also known as a “referral period,” this is the window of time within which the advertiser compensates affiliates for the referred customer. If it is set at 24 hours and a visitor you refer purchases 25 hours past the initial referral, you don’t get commission on that sale.
17. Tracking/Reporting Platform
Ensure that you’re comfortable with the merchant’s tracking and reporting platform. Understand that not all platforms offer the same levels of customization and deep dives into tracking and reporting.
18. Management & Approachability
Contact the merchant and see how quickly they get back with you, and how satisfied you are with their response. You want to partner with someone who cares about your partnership, and you may see that some merchants don’t appear to do so.
Whether you rely heavily on banners, deep-linked text links, advanced creatives or product feeds, check whether the merchant provides adequate support here.
Some merchants offer a good set of basic links and banners, while others offer just a homepage link and a couple of banners. Some offer both some basic links and a way for you to create your own as widgets, video, form-based creative, easy product feed imports, APIs and much more.
The above-listed criteria should help your thorough analysis of any advertiser’s affiliate program. Remember that the time you spend on preliminary due diligence will pay off in the long term, safeguarding you from wasted time, money and stress.
Geno Prussakov is a well-known affiliate marketing expert, best-selling author of four books, popular speaker, Founder and Chair of Affiliate Management Days conference, CEO and Founder of AM Navigator – an award-winning affiliate marketing management agency. You may follow him Twitter at @ePrussakov.