To follow is an excellent article from MarketingExperiments.com related to the PPC Affiliate. The article corroborates what I have been finding in my programs as well as the programs of other affiliate managers.
The ROI on PPC vs. Affiliate Marketing
Building and maintaining strong PPC campaigns is becoming increasingly difficult in what has become a very competitive marketplace.
At the same time, many companies report poor performance with their affiliate programs.
The question we asked ourselves is this:
If companies invest sufficient time and effort to develop strong affiliate programs, can affiliates deliver a better ROI than PPC advertising?
Working with two of our research partners we have identified some important trends, and have confirmed that a well-managed affiliate program can deliver significant revenues.
Please note that the purpose of this brief is not to encourage marketers to abandon their PPC advertising in favor of affiliate marketing.
Instead we are suggesting that a strong affiliate program can deliver additional revenues with a very favorable ROI. Also, with skilled affiliates working on your behalf, and with some of them using PPC advertising themselves, you can extend the reach of your total PPC exposure, and reduce your PPC costs.
That is to say, many affiliates will be running their own PPC campaigns to attract the same traffic you have been fighting for yourself. They will then refer the most qualified of those visitors to your site, in the hope of achieving a sale and earning a commission.
Which gives the best return on your investment - Pay per Click advertising, or building strong affiliate partnerships?
We recently released the audio recording of our clinic on this topic. You can listen to a recording of this clinic here:
The ROI on PPC vs. Affiliate MarketingTop Guidelines Provided in the Report
- When launching an affiliate program, give yourself a 12-month breakeven horizon. It takes time to build a reputation for having a good program, and to recruit good affiliates.
- Be generous with your commissions. Top affiliates make their living as affiliate marketers and invest their resources only in programs which offer generous terms and are well managed.
- Be prepared to increase commission rates for your top performing affiliates.
- While some companies forbid their affiliates to bid on the company’s “own” keywords, this practice is not recommended. eBay, Amazon and other major sites freely allow this practice, as they understand and have calculated that giving their affiliates free reign is to their advantage. A common exception is that most companies will not allow you to bid on their trademarked names and phrases.
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