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How Affiliate Marketing Is Hurting Your Bottom Line

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Affiliate marketing can be a great way to introduce your brand to a larger audience. When done properly, it can be a win-win situation for you and your affiliates. Effective affiliate marketing strategies can boost revenue by up to 30%. However, there are some ways affiliate marketing can hurt your bottom line.

If you end up associated with the wrong people, you could do more harm to your reputation than good. Robert Glazer, founder and Managing Director of Acceleration Partners and founder and Chairman of BrandCycle, notes that “The affiliate industry is nuanced. There are many players, layers, and moving parts. While some of these nuances are what make the affiliate model unique and valuable, such as connecting compensation to outcomes, there are others that are less desirable. What’s more is that, if a company is unaware of them, they risk damaging their brand.” Poachers could even cause you to lose ROI on your PPC ads. Here is some information to help you evaluate if affiliate marketing is worth it for your business.

 

It’s a Numbers Game

If you’re going to implement affiliate marketing, using an affiliate program management company may be the way to go for best results. Most companies don’t have time to recruit and manage affiliates on their own. While some affiliate management companies are better than others, an affiliate program is only as good as its marketers. When evaluating your network, look at both the size and the quality of the network of advertisers. Does the management company have a large network of quality advertisers, or is the network full of affiliates who aren’t very active? If it’s the latter, you’re never going to see any sales growth for your business.

Another unfortunate aspect of using affiliate marketers is you can’t manage their business practices. If an unscrupulous advertiser is promoting your products, it could ultimately damage your company’s reputation. The management companies and affiliates only make money if they sell products, thus it becomes quantity over quality of links many times. Instead of thoughtfully promoting your brand to the appropriate audience, someone could be bombarding their email list with irrelevant links every month just to see what sticks. They may also be promoting your competitor’s products alongside yours, which could be damaging.

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Their Mistakes Make You Look Bad

Anyone can sign up for an affiliate marketing program, whether they truly have any marketing skills or not. With all of the online ads about how lucrative it is, some people sign up because they think it’s easy money with little effort. They’re not approaching marketing your products or services as a way to help customers find what they need. They prioritize selling over service, and that makes you look bad. From misspelled words to making false claims, an affiliate doing anything to sell a little bit of everything is bad for your brand’s image.

 

Affiliate Theft Could Sabotage Your PPC Efforts

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A study conducted by the University of Baltimore and Cheq found that affiliate theft cost companies $1.4 billion in 2020. Many unethical coupon programs offer downloadable toolbars or browser attachments that deceive your program into believing a customer found your site through their affiliate link, even if they entered your site directly from your PPC ad on a search engine. Robert Glazier defines unethical affiliates as those who “purposefully engage in deceptive marketing activities to collect commissions.” A 2019 Affise study determined that fraudulent activity comprised 35.3% of all processed traffic in the first two quarters of 2019.

The offending programs make sure the customer is completely oblivious to what they’re doing on the back end. Not only is this a waste of your PPC budget, you’re also paying money to affiliates who didn’t earn it. If you don’t keep a close eye on things, your money could be going out the back door. One way to thwart affiliate theft is to disguise your affiliate links. You can shorten your links using a site that allows you to track them. That way you can monitor where your traffic is coming from more accurately. This can be especially tedious if you’re managing your own affiliate marketing program.

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Get Help Growing Your Business

Choosing the right strategy to grow your business can be challenging. You want to expand your reach while maintaining the integrity of your brand. Coalition Technologies is an industry leader in SEO and PPC strategies. Not only can we create digital marketing strategies for you, we can also assist with online reputation management.

We’d love to partner with you to help you take your business to the next level. For a free consultation contact Coalition Technologies today at (310) 907-7949 or email us at sales@coalitiontechnologies.com.

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