The most powerful, effective, efficient and economical way to market your Canadian products or services online is through an affiliate program (also known as Associate Programs or Partner Programs). Affiliate programs are based on performance, allowing you to advertise on countless websites around the world, yet only pay for it when a sale is made. You can quickly build an online sales force that is virtually guaranteed to boost your bottom line through an unbeatable Return on Investment (ROI). Most leading American retailers have affiliate programs in their customer acquisition toolbox, but Canadian retailers have been slower to adopt the strategy. We’d like to help change that with this comprehensive guide.
I have been on both sides of affiliate marketing in 20+ years of working online. As an affiliate marketer and a remote affiliate program manager based in British Columbia, I have a unique perspective and insights that I am happy to share with Canadian and international businesses who want to sell to Canadians.
Banner advertising is the first thing most Canadian entrepreneurs think of when they consider working with an affiliate marketer (also known as an associate, partner or publisher). However, an affiliate program offers many opportunities to promote your business in a variety of ways on a vast number of websites.
You could find your products or services being promoted on:
- Comparison shopping websites
- Content websites and blogs
- eBooks and other information products
- Coupon, deals and freebies websites
- Incentive websites, such as rebates or cash-back models (like eBates Canada)
- Newsletters and other eMail marketing
- Social Media
- Search engines (you can have keyword bidding policies in your affiliate agreement)
- Some marketers even promote offline!
When you consider the ROI of having an affiliate program for your business, be sure to consider the big picture. An important point to remember is the traffic your affiliates bring in can become repeat customers. Website visitors may also follow you on social media or sign up for your newsletter while they’re on your website, making future sales possible even if they buy nothing on the first visit. You could also see an uptick in offline foot traffic in your store as more people find you online and want to check out your products in person. The benefits of any type of marketing aren’t always tangible with a measurable ROI or trackable analytics, but that doesn’t mean they aren’t a critical part of your bottom line.
Above all, remember that affiliate programs don’t cost you money, they make you money.
“We found that overall, when a shopper interacts with the affiliate channel, they are more likely to purchase, spend more with each purchase, and make more subsequent purchases,”CJ found in their study of 21 million retail consumers and 5.5 million transactions.
How Affiliate Programs Work
Compensation online (usually referred to as commissions) is the same concept as earning a commission offline. There are several standard commission structures, collectively referred to as “Cost per Action”.
Cost per Action (CPA) commission structures may include one of the following, or a combination thereof:
Cost per Sale (Pay per Sale)
Cost per Click (Pay per Click)
Cost per Lead (Pay per Lead)
Cost per Call (Pay per Call)
I don’t recommend the “Cost per Click” commission structure due to potential abuse/fraud. You may decide to add the option once you have some experience, but most don’t.
You may also opt for a multi-tier commission structure. That can mean commission percentages increase as the sales go higher. It can also mean you offer your affiliates an opportunity to promote your affiliate program to other affiliate marketers, which builds your online sales force that much quicker. In this scenario, the affiliate who signs up another affiliate is paid a small percentage of their “sub-affiliate’s” commissions. Not all affiliate networks facilitate 2-tier programs, but if you go with Share-a-Sale or your own program this tactic will be available.
The biggest mistake I see in Canada is the low affiliate commissions offered. You’re not going to lure affiliates, let alone “super affiliates”, with insulting commission rates under 10%. Even if they sign up, you won’t be a priority for them. Do you want to have premium placement, content promotion, mailing list mentions, social media promotion, and anything else that takes effort from your affiliates? Then value them enough to give them a reasonable cut. Big-ticket items can be lower, but as a general rule you should offer an absolute minimum of 10-15% of sales. Alternately or additionally, you can pay for each lead sent your way.
Cookies determine how long the affiliate will receive commissions from customers who return to your website after the initial visit. The “cookie life” is at your discretion, but again, to get on the bigger sites and “super affiliates” you’re going to have to be fair. The absolute minimum cookie length should be 30-90 days.
There are two ways you can start an affiliate program for your Canadian business:
1. Affiliate Network
Affiliate networks offer significant benefits, starting with free training on several of them. They have an established group of thousands of affiliate marketers who are members of their network. Having a third party involved elevates the trust level considerably for affiliates, plus they can meet payment thresholds much faster.
The affiliate network takes care of tracking, reporting and paying your associates. They’ll walk you through your program description, banner uploads, your affiliate agreement, automated correspondence (such as notifying an affiliate they’ve been accepted), commission rates and tracking details. You’ll usually have access to all of your affiliates, allowing you to send newsletters, etc. through the network.
Typically, there’s a setup fee and then a percentage is paid per sale or per commission to the network. Depending on the network structure, you may also have to make a deposit of funds for future affiliate payments. Some networks also have a minimum sales policy that charges a fee if you don’t meet it, but it’s usually so low you can easily surpass it. Many businesses find a network is far less expensive than hiring an affiliate manager and taking care of the accounting in-house.
When selecting a network through which to run your affiliate program, there are some considerations that are specifically Canadian. If your target market is in Canada, you’ll want a network that attracts Canadian affiliate marketers. The most popular affiliate network for Canadian businesses and affiliate marketers/publishers is Share-a-Sale. Share-A-Sale focuses on small-medium businesses, which is reflected in their low minimums, set-up and other fees. If you’re promoting information products, such as software downloads, courses or eBooks, you may find that ClickBank works best for you.
2. In-House Affiliate Program
You can use affiliate program management software to enlist publishers who want to promote your products. A popular tool for both Canadian and American businesses who want to set up their own in-house affiliate program is Post Affiliate Pro.
You will also find some eCommerce platform software and shopping carts have built-in affiliate program options, including top picks like Shopify Canada. If you’re promoting information products, such as software downloads, courses or eBooks, you may find that E-Junkie works best for you.
Your payment process must be fully automated. Once the commissions reach the minimum payout, the payment process should be automatically initiated. Most private programs pay affiliates via PayPal these days. If you prefer a cheque, that still works as well. You can also look into direct deposit payments. Don’t even think about charging affiliates a fee to receive payments – your payment processing expenses are not their responsibility.
Higher commissions and a lower payment threshold will be a big draw for in-house affiliate programs. In a network, affiliate marketers earn commissions from all of the programs they join, which allows them to hit the payment threshold faster. When they only have you to promote, a high payment threshold can take a long time to reach (if they ever do). It may look like a great incentive or an opportunity to keep commissions if the associate never reaches the threshold, but what it looks like to the affiliate is “too risky to bother with”. The majority of affiliates prefer a payment threshold of $0-$25, with $50 being the absolute maximum.
When it comes to payment frequency, affiliates prefer weekly payments but monthly is more common. The payment currency can be either Canadian dollars or USD.
Never be tempted to not pay your affiliates, be it for a transaction or a monthly payout. They can find out quite easily and when they do, your dishonesty will spread like wildfire. Your reputation can make or break you online with both your customers and your sales force.
One of the best ways to learn and compete is to do some investigating. You can join a network like Share-A-Sale and check out what your competitors are doing. You’ll be able to access all kinds of data, from commission rates to Earnings per Click (EPC) for a certain time period. If you want Canadian marketers to choose your program over a competitor’s, you can offer a higher commission rate. If they have a product feed, you can set up one too. You can even see which advertising creatives are performing best and apply that knowledge to your own creatives.
As a program manager, I do this research on a regular basis and find it invaluable as a starting point for testing. As an affiliate, it helps me decide which programs are worth extra effort and which creatives I should use to increase conversions.
There are some expenses that you’ll want to budget for when planning your affiliate program, although you won’t necessarily need everything right away.
- Network set-up/access fees or the cost of affiliate program management software
- Designer for banners (preferred standard banner sizes include 300×250, 468×60, 125×125, 120×240, 120×90, 120×60, and 88×31)
- Programmer for product feeds, dynamic widgets, search boxes, etc.
- Video producer if you intend to have videos available to affiliates
- Copywriter and content writer
- Affiliate program manager – Hiring an Affiliate Program Manager can ensure the success of your program. She will do much more than approve/reject applicants, update advertising creatives and product feeds, and provide general support. A good Affiliate Program Manager will also build relationships, coach, motivate, share new campaigns, manage affiliate contests, enforce guidelines, and engage top performers. There are also companies that offer affiliate management services.
You can save a considerable amount of money by employing a remote workforce or contracting people for the above tasks. You may be lucky enough to find that rare person who can do, and maintain, most of it for you. If your store is on one of the popular retail sites like Shopify Canada, you will be able to find scripts that are already written for compatible data feeds.
Be Careful Out There
There are shady affiliates online and you should be aware of what to watch for. Generally speaking, you should be on the lookout for affiliates who steal content, violate your copyright, undermine your paid search efforts with trademark violations, use toolbars or adware downloads, use any kind of shady click tactics, spamming, fake cookies, and theft of coupon codes or other exclusive deals from other affiliate marketers. Cover these concerns in your affiliate agreement, monitor, and enforce.
One of the first questions I hear from Canadian businesses when they start an affiliate program is “what type of advertising works best?”
The promotions that work for individual products and services can vary. Results also depend heavily on the website your ad is on and the person doing the promoting. Of course, conversions are almost entirely your own responsibility once the consumer lands on your website.
The many variables make testing imperative, but there are some consistent ‘rule of thumb’ facts that can guide you:
- Text links outperform all other types of advertising online. They have a high Click Through Rate (CTR) and usually a higher Conversion Rate (CR).
- Combine text links with deep linking and you’ll have the highest conversions possible. Deep linking (a direct link to an individual product) has proven repeatedly to result in the highest sales conversion rate. Providing links to every product yourself is overwhelming for both you and your affiliates, but there are tools that allow the affiliate to easily link to any page or product on your website. Our recommended affiliate network, Share-a-Sale, has user-friendly, deep linking tools available.
- Product images, on their own or in catalogues, often have the highest CTR, but they still don’t outperform text links for sales conversions.
- A big surprise for most businesses is that banners receive the least clicks and sales. People just don’t see them anymore and many use ad blockers. You’ll see a higher click through rate if the banner engages consumers on some level, such as a search box or poll. Either way, they won’t beat text.
- Pop-ups are blocked by most people and they annoy pretty much everyone else.
- Text links and talented content marketing are the most powerful combination.
Affiliate marketers should be aware of what works on their website, which makes it necessary to provide a variety of marketing creatives for them to choose from. Note that Adobe is in the process of scrapping Flash, so don’t bother with Flash banners.
Promoting your Affiliate Program
Even if you’re dealing with a network that has thousands of potential affiliates, you should promote the launch of your affiliate program. If you hire an affiliate manager she’ll have all of this down to a science, including lists of contacts and directories.
- Add an affiliate program information page to your website and include a link to it in your menu.
- Post about it in your blog (with SEO in mind) and on social media.
- Send out a press release.
- Submit to affiliate program directories, such as AffiliatePrograms.com and AssociatePrograms.com.
- Advertise on related websites and blogs and consider sponsored content (reviews and case studies are very effective).
- Advertise in related newsletters.
- Post in affiliate marketing forums.
- Search for and politely contact Canadian bloggers in your niche. Make sure you actually research their site and personalize the eMail. Our post “PA30+ Canadian-Owned Blogs for Blogger Outreach and Guest Posts” will get you started in this country.
- Connect with Canadian affiliate marketers on LinkedIn but don’t lead with a pitch. You can search LinkedIn for your niche keywords combined with “affiliate marketing”, “Canada” and so on. Connect with me.
- If a 2-tier affiliate program is feasible, many of the affiliate gurus will promote it to their networks. In a 2-tier scenario, an affiliate marketer signs up for your affiliate program and earns a percentage of each sale. If they promote the program to their network and another affiliate marketer signs up for your program using their link, they’ll also earn a percentage of those sales.
- Join an affiliate network. They already have a database of affiliate marketers ready to join your program. Plus, they’ll automate much of your program administration, such as tracking and payments.
- If you’re working within an affiliate network, make sure you’re included in any “new program” announcements. Also, ask about network newsletter announcements, holiday shopping guides, etc. Your success is their success!
- Most networks will also allow you to make recruitment offers to their members.
- If you like conventions, you can meet new affiliates by attending the same ones that interest them. Blogging conventions are very popular, for example, and many bloggers are looking for ways to monetize their blog.
- Focus on building relationships with potential affiliates, rather than just shoving your program under their nose.
22 Tips for Working with Canadian Affiliate Marketers
- Remember to place a link to your affiliate program details on your website. When marketers are looking for certain affiliates to promote, they usually search for their website first. It should lead to a page that tells affiliates all about your affiliate program, including how much you’re offering them. You can have the form on that page or a link to the sign-up form on your network’s site.
- Approve applications in a timely manner, or use automatic approval. Otherwise, you may miss an opportunity to be promoted for a current project. For example, I often search for affiliates that are suitable for an article I’m writing. If it takes days to be approved for the program, chances are I won’t go back and add you unless you’re paying a very high commission.
- Make it easy to link to you. I’ve gone through dozens of pages of links without being able to find a single one to the homepage, for example. It’s important to use software or a network that facilitates “deep linking” so affiliates can create their own link to a specific page/product on your website.
- Your advertising graphics should be high quality and have a clear call to action that’s easy to read. Your partners don’t want to mess up their site with low quality images, and it could be enough for them to decide against promoting you. Optimize banners to the lowest file size possible WITHOUT sacrificing quality.
- Do not include your website URL or phone number on banners intended for affiliates. Nobody wants to make it easy for visitors to bypass them and lose commissions.
- Extend special offers of a higher commission to some affiliates. A mistake often made with this strategic move is basing the decision on traffic alone. Your competition will be greater on the most popular websites anyway. Instead, select affiliates who are specifically targeting your ideal market, such as Canadian niche bloggers. Lure them into your program with higher commission rates, exclusive deals and coupons, samples, merchandise, company swag, performance bonuses, contests and free affiliate training.
- Arrange special promotions with individual affiliates, such as supplying products for blog contests or paying for a sponsored post. Don’t be afraid to work outside the standard program box and ask them about their PR options. For example, on several sites we have a “we use it” option, in which the advertiser supplies a high-end product like a laptop, and in return we promote it as our product of choice whenever the opportunity arises (supposing we do, in fact, like it).
- Offer products for reviews. It’s much easier to sell something you’ve used yourself. Don’t be stingy. For example, nobody is going to be excited by free access to a program for a couple of months, just give them a membership and let them promote it over and over again.
- Keep affiliates updated with eMails, but don’t go overboard. The most successful affiliate marketers are very busy and you don’t want to annoy them with repeated “how can I help you” eMails or the like. Instead, include a blurb in each of your update eMails, encouraging your affiliates to contact you if they need anything and mention what what you can offer them.
- Encourage affiliates to follow your company blog and make sure you keep it updated. If you have an in-house program, consider having a blog specifically for your affiliates.
- Provide content for websites and eMail newsletters. Good content should be useful to the reader, with the promotion being so subtle it almost looks like an accident. Encourage publishers to customize articles to avoid duplicate content penalties from search engines.
- Make it easy to promote your products by including the affiliate’s ID in the ad code when you send out newsletters. For example, if you’re promoting Boxing Day deals, include the personalized code for banners and text links so the affiliate can easily copy and paste. The easier it is to promote you, the more you’ll be promoted.
- Give your affiliates a heads-up on promotions. They should know about them as soon as you do. Sending “today only” deals isn’t practical for most affiliates. If you’re having a one-day sale, give them some notice so they can plan a promotion.
- Don’t hold affiliates responsible for “charge reversal” items unless it’s some kind of transaction fraud. The job of the marketer is to bring you the customers. They are not responsible for merchandise returns, etc.
- Consider holding contests or offer bonuses as an incentive to make a first sale, increase sales, or even placing a certain type of link (such as a banner on the home page or a text link in a product review). Popular rewards or prizes are cash, gift cards, and electronics like iPads. You can get creative with this. For example, you could have a bonus offer that allows the affiliate to earn a free product if they make 10 sales of that product. Incentives are a much more effective tactic to increase sales than threats of program removal.
- Avoid asking your partners to make changes in code. If you decide to stop carrying a product or switch networks, most affiliates will simply remove your links and not replace them with any of your links. They’re more likely to switch to a merchant who is more stable. If you must change banners frequently for legitimate reasons, such as holiday promotions, consider a dynamic solution that allows you to automatically update ad’s without bothering your affiliates. The same concerns apply to changing the page URL a product is on.
- Think very carefully before reducing commission rates. The majority of affiliates will drop you or at least promote you less.
- Don’t make ridiculous demands, like insisting your links be on the publisher’s homepage, preapproving all posts that mention you, or accusing people of copyright violation for common words (such as “Canadian”), or only allowing promotion of certain retail products.
- If you have an in-house program, place a log-in link on your website that’s easy for affiliates to find.
- Include the affiliate manager’s contact information on your affiliate page and in every eMail. Listen to suggestions and answer questions in a timely manner.
- Refrain from terminating (or threatening to terminate) affiliates that haven’t made sales. That same affiliate could be in your top 10 next year. Waiting to see if she will won’t cost you anything, but burning that bridge could very well cost you later. If you want to encourage them to start selling, make them a special offer for their first sale.
- Remember that most Canadian affiliate marketers are extremely busy working with many merchants. Do everything you can to make their lives easier and keep in mind that they’re doing you a favour, not the other way around. You’re competing with other merchants who are vying for ad space. If you don’t value your affiliates, your competitors will happily do so.
Have you considered an affiliate program or do you already have one? Please share your experience or questions in the comments below.
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