Having racked up experience at affiliate management firm PartnerCentric, as well as serving as a contractor for Microsoft’s iSEM team, Heather also sits on the boards of the Affiliate Summit and Affiliate Classroom.

During our discussion, Heather talked about:

• Issues and considerations for merchants adding affiliate marketing as a new component to their marketing strategy
• Advantages and disadvantages of using an outsourced affiliate program agency compared to hiring an in-house affiliate manager
• How affiliate managers can enhance programs they manage with some best-of-breed industry practises
• Tips for better affiliate project management (from the affiliate and affiliate manager perspective)
• An insight into how super affiliates operate and key strategies and techniques they use
• How affiliates can get more out of working with their affiliate managers
• Resources for affiliate marketers and tips for growing and scaling your business

Check out the podcast below:

Links:

• Paulson Management Group
• Heather on Twitter

• How merchants can use affiliate marketing as a sales channel for their products and services
• How to conduct due diligence when deciding whether to set up and operate their affiliate program or list it on an affiliate network
• How merchants can enhance their “affiliate relationship management” skills
• ShareASale’s “best practises” initiatives (possibly for merchants and affiliates – something I’m looking forward to checking out).

Check out: ShareASale

Access the podcast below:

It’s always a pleasure talking to affiliate marketing veteran Rachel Honoway who’s one of the pioneers at affiliate marketing service agency Kowabunga (later acquired by Think Partnership), having started in 1997.

She’s not only friendly, but highly knowledgeable about prevailing issues in the affiliate marketplace.

If you haven’t yet, check out Partnercentric president Linda Woods’ interview with Rachel on a recent episode of Affiliate Marketing Insider.

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For this edition of the Friday Podcast, we discussed:

• Challenges for affiliate managers, especially in keeping up with your affiliates
• The chronic issues related to talented affiliate managers leaving for greener pastures and how networks can address this
• Highlights from the recent AC Certified workshop
• Why Syntryx might be the “killer app” for affiliate managers
• The rise of the Web 2.0 social/community-based affiliate
• Jim Kukral’s role in the affiliate universe (with a pointer to the Daily Flip)
• And lots of AC Certified goodness

Check out the Friday Podcast below:

To find out more, visit: AC Certified

I called the merchant and talk to them, and what they told me surprised me.

But first, a summary: With a gap in a web service merchant’s affiliate commission payouts on an affiliate network and their in-house program, I was keen to hear what veterans in the affiliate industry had to say. The commission payout through the affiliate network was about 50% higher, compared to the merchant’s in-house program.

Communicating with the merchant was certainly a key point in addressing this issue and some might say the information gap was being unfairly used in this instance:

“That’s retarded. Tell them to retroactively apply the network rate to your in-house sales from the date they started that network rate. If they won’t, dump them..” – Geordie Carswell, RevenueWire EVP.

“I attribute the fault in this to the affiliate manager/team handling your account. It is he or she’s job is to make sure affiliates (super or not) are taken care of. That person should have given you the choice as to which network you promote their program through, or at least told you about both offers. You are a well known affiliate and blogger and you should have been informed of both options. The affiliate marketing managers of Pepperjam are in constant contact with the affiliates who make a difference our programs. We build and form relationships to gain trust. The affiliate manager who was assigned to you did not do that.” – Robyn Martin, Pepperjam Affiliate Marketing Director.

“Before I began working for LinkConnector Affiliate Network, I was the affiliate manager for a few different companies. I considered it one of my responsibilities to keep our payouts consistent between the in-house program and the network programs. If anything, our in-house program sometimes had a higher payout because no additional fees were involved. I would never have considered that disparity between commissions – that’s just shooting yourself in the foot.” – Jeannine Crooks, LinkConnector.com Affiliate Sales Manager.

“I personally feel strongly that bigger and pro-actively managed programs SHOULD offer 2 versions.
In-house and a good network. TYPICALLY, but not in this case the in-house commissions would be a little higher, possibly longer cookies, etc. to make the in-house option more attractive and offset network costs…a possible scenario hit me that COULD make sense of this situation. Not saying this scenario would make the situation any easier for you to take but…
If the merchant, like many are was clueless and the affiliate program was not being tended to properly and they hired an OPM.” – Linda Buquet, 5Star Affiliate Programs Founder.[See the 5Star discussion thread]

Which is in-line with what I would expect. An in-house program would have lower operating costs and could give out higher payouts, but the opposite scenario is at work here.

And Chickenfeed AKA Millnic Media‘s Jason Bailey chimed in with:

“you got hosed and it is your own fault. This IS the standard practice and fully within the marketers code of ethics. (I can see the shit flying at me already…)…In House programs are notoriously low payers. They are also usually the most poorly managed of the places you can pull a particular offer from. CPA networks have schwacks of experience with a wide variety of offers, merchants and publishers. In house affiliate managers are often the webmaster as well, and quite possibly the night doorman to boot (not always — **dodges shit** –)…

You got hosed. If you were doing well at $60, think how much better you’ll at $90. Hell if the CPA network is offering at $90 on the street and you can push some volume, I’ll bet the can get $95 no sweat. Suck it up. Don’t make that mistake again. Lot at the bright side – You just got a $30 pay bump!..Join all the big networks and shop around. Get them fighting each other for your traffic. You have to be the squeaky wheel to get the big payouts. Logging into CJ to see what is new doesn’t cut it.

And as Share Results Network affiliate manager Julia Stead suggests:

“Doing the research is necessary to find the top payout. I often have affiliates negotiate/barter payout rates with me for certain offers that are available through other networks, however it’s helpful to keep in mind that payout isn’t the only factor when choosing which network/program to partner with. That being said, the huge payout discrepancy that you experienced seems unusually high. ”

As an affiliate marketer, having all the information at your fingers (joining both affiliate networks AND a merchant in-house program) are necessary if you want to succeed.

Remember, as an affiliate marketer, you’re more a traffic broker, so you need to join every relevant program relevant to your niche.

I heard some interesting alternatives to the situation too:

“Merchant should be required to disclose to affiliate what networks their offers are running on + in house offers and what the respective payout are. Affiliate have a right to know. This could be done through industry self-regulation.” – Amit Mehta, Super Affiliate, SuperAffiliateMindset.com.

“I’d attribute this to one of two things:
1) lack of communication between two people that are handing things at the company. I was on the short end of this at a previous job when I managed the affiliate program. There was somebody else in the company doing “media buys” for a higher caliber of publisher than i was getting. Turned out they were cannibalizing some of my biggest affiliates for 50% more than I was permitted to pay.

2) pure idiocy. Some companies really don’t think affiliates will connect the dots when they wildly vary payouts in different places.

Either way, tell them you expect $100 a lead now.” – Shawn Collins, Shawn Collins Consulting, AffiliateTip blog, Affiliate Summit.

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So what was the outcome?

I called the merchant during their stated hours of operation “8am to 6pm” for affiliate and business development matters. And was told the affiliate guy comes in at 10am. So much for posting that information on the website.

I never got to talk to the affiliate manager and instead spoke to a series of sales guys. All of whom told me the same thing “The affiliate network determines the payout.”

“But aren’t you paying the affiliate network? Don’t you plan to synchronise your payouts?”

“The affiliate network is a third party, we don’t control them. We aren’t concerned about the commission discrepancy. You can choose which program you want to promote.”

Perhaps they could pitch this development as a new reality TV series: “Affiliate Programs Gone Wild”.

So much for customer service. I’ll be promoting other merchants from now on.

A case in point, I’d be promoting web services for a merchant through their in-house affiliate program. It paid about $60 per customer who signed up for their services.

And I discovered a couple of days ago that they’re running the same offer on one of the biggest affiliate networks and paying out $90 a customer.

Boy, I was fuming.

I can understand a $5-10 gap differential when the same offer is listed across various affiliate networks (the networks might be willing to cut out a chunk of their profits to give more to affiliates).

But when there’s a near 50% commission payout gap I feel it unconscionable.

There is an unspoken affiliate marketers’ code of conduct, but there isn’t a formal regulatory body which presides over affiliate networks and merchants.

In other words, who watches the watchmen?

Some might say that in a capitalist society, you are welcome to vote with your feet.

I tend to view business as a series of long term business relationships with real people.

I can only guess that:

• The various marketing/ad departments within the merchant or the network aren’t talking to each other, such that you have a 50% gap in affiliate payouts.
• The service provider faced some stiff competition and upped their payouts in real-time to remain competitive. But wouldn’t you be talking to your in-house team too?
• Affiliates? Who cares.

For the purpose of this post, I prefer not to name the merchant, nor the network, nor the type of service and focus on the core issue instead: Trust.

So does that mean affiliates are going to have to set up a multitude of Google News Alerts to keep track of offers, in addition to promotions, competitive offers and depending on your traffic source – search rankings or PPC campaigns?

Having to look behind my back one less time will certain help me focus more fully on what I want to do: affiliate marketing.

Although I wasn’t bringing in a huge amount of volume to the merchant, I think my contribution was fairly decent.

And now I have to decide if I’m going to bite the bullet and switch to the higher paying program, or choose some alternatives.

I know a number of affiliate network people and affiliates visit this blog, so I’m curious to hear your feedback in the comments.

I’ve come to the conclusion that unless you are very strong in promoting your own product, you will need to rely on your affiliates. Which is commonsensical.

But though it seems like you are relying on your affiliate, you also play a big part in their success, and by extension your own success.

Affiliates provide the ultimate leverage for any product creator.

You have an army of motivated individuals to promote your product or service.

You only pay them upon a successful transaction.

They work for you round-the-clock (especially if they’re scattered around the United States, Europe and Asia).

If you have the system running well, you’ll have a couple of sales every couple of hours.

Sadly though, I’ve seen many products crash and burn too.

I guess the owners were too busy with other projects, and the product became an abandoned stepchild to their other newer, flashier projects.
On the other hand, I’ve seen some great campaigns too.

Here’s what I’ve observed.

Once the product is launched, product developers need to proactively give marketing tools to their affiliates.

Tools means more than a couple of banners and some suggested text links to your sales page.

If you want to be comprehensive, provide:

• Articles
• Reports
• Audio clips
• Video clips
• ‘Leaked chapters’ if they’re appropriate
• Rebrandable ebooks
• Innovative bonuses

You’re the chief cheerleader in the marketing campaign, motivated your affiliates to go for that sale.

If you’re so inclined, create a marketing plan for them, give them coaching, give them encouragement.

If you see your affiliates as your partners, you’d want to aid in their personal development too, wouldn’t you?

It doesn’t matter if they’re already promoting five other products and yours is just one of them?

Remember the goodwill bank? The vicious cycle of kindness?

What comes around will go around.

If you make the world a better place for your affiliates, they’ll help you make it an even better place.

This is the affiliate environment I’m striving to create for my affiliates, and I’m planning to launch a series of interesting products in the next couple of weeks.

Watch for it.