How Do Affiliate Leads Compare To Google AdWords?

A deep dive into the affiliate industry A deep dive into the affiliate industry

How Do Affiliate Leads Compare To Google AdWords?

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When it comes to online lead generation the spectrum of clients we speak to can range from the ‘just get me leads’ request to the ‘we want to build the brand’ approach.

Regardless of whether your preferred online marketing strategy is hard and fast or omnichannel nurturing, at some point each is judged by what it contributes to the bottom line. If you want to generate leads through tried and true online mechanisms then two channels stand out; Affiliate Marketing and Google AdWords leads.

As a digital marketing agency we’ll give you some perspective from our experience in the game. But there is a disclaimer to state these channels may not work for everyone because your offer and your preferred consumers are very individual. The two approaches we’ll discuss here relate more to business to consumer environments such as mortgages, insurance, services and fashion.

What is Affiliate Marketing?

Affiliate marketing or performance marketing as it’s more recently been called, is a lead generation channel where an individual or company, commonly referred to as a Publisher, own a large database of email addresses. These databases can number into the millions and may be travel, finance or fashion focused. The audience favours females and they may have been added to a publisher’s database through an opt-in offer through social channels and blogs.

You will invariably deal with an aggregator who has agreements with many publishers. Your offer is sent to their email databases by way of a mass distribution email and you, the client, pay for a completed contact form. This qualifies as a lead.

They set a cost per lead based on the amount the competition is already paying.

Unless you can access multiple databases affiliate marketing is best viewed as campaign based.

The benefits of Affiliate Marketing

This is a good channel if you want your sales team to have conversations and make sales. If the instigator or the decision maker of your product/service is female you’ll find it easier to create sales.

The cost of affiliate marketing leads will be less than if you used Google AdWords because you’re only paying for the result; you’re not paying for the clicks which didn’t turn into a lead.

Some of the better operators let you post pay the leads which will help with cash flow as well as negotiating with the publisher whether these were in fact leads.

The negatives of Affiliate Marketing

Unless you’re a national operator with an offer which serves 75% of the population don’t waste your time with this channel. Businesses to business offers don’t work nor do products/services with high price tags or long sales cycles.

Publishers are very protective of their databases and because you’ll be dealing with the aggregator there will be a frustrating lack of transparency. You won’t know how many people opened your email or why they didn’t like your offer so you’ll have no data to optimise the consumer experience in following months.

Because most people read their inbox at night, leads can be sporadic so your sales team will be busy in the morning and quiet throughout the rest of the day. So don’t rely solely on this digital strategy.

If you’re late to the party most of your competitors will have already tried and succeeded with affiliate marketing. If you’re not a household name you’ll need to work harder to win the consumer so you may need to consider prizes to get consumers over the line. Prizes work because people fear missing out and you can also lower the cost of a lead.

What types of affiliate leads are there?

There are two types of affiliate leads and each is identified by the consumer giving their contact details. Publishers won’t allow the consumer to phone you directly.

One type of affiliate lead happens when you create an email marketing and landing page campaign. The consumer sees your email in their inbox, they click on your offer to then be shown a landing page where they can leave their details, simple.

Co-registration is the other way to receive a lead, by comparison these leads are very inexpensive ($1 - $2). Here you piggy back off the success of another company’s email and landing page campaign. Before the consumer completes the contact form on their landing page a pop up asks if they would like your offer as well. Qualifying them as a lead is as simple as ticking a box.

I’ve done this myself as an exercise and didn’t even know I had registered for something. It seemed disingenuous to me and more to the benefit of the publisher than to the consumer or to the company making the offer.

I’ve been reassured by publishers this works in some situations (it’s in their best interest to say this though). It’s the same frustration I feel when I go to pay for petrol and the cashier spruiks a 2 for 1 chocolate bar offer as I’m paying. Consumers are there for a totally different reason and this doesn’t make for a good first impression for your company.

For a number of reasons it may be best to leave co-registration to your competitors.

Google AdWords in a nutshell

If Google AdWords is the shopping mall, your landing page is the retail store and your contact form/payment gateway is the cash register. With no parking restrictions and an always open policy consumers enter the shopping mall and reach out in their own time.

Because it’s a bidding war your store may or may not appear when consumers enter. Get it right and you can’t beat this online shopping channel for the consistency of conversions it delivers. It wins because of the psychology of why and how people access the platform.

The benefits of Google AdWords

Google Adwords is Pull Marketing at its best and the go to online environment for searches like, ‘What is…How does…When will…Where is’.

The need for instant gratification can’t be replicated in the other forms of lead generation and this is why Adwords beats other platforms hands down.

With the increased traffic, leads and conversions you will have through AdWords you’ll gather lot of data to understand your consumers and optimise for the future. But need to capitalise on this information with landing pages.

Google Adwords is a platform where you can compete against your biggest competitors and still win the consumer. While the industry incumbent have spent weeks educating and nurturing a consumer, in a single moment you can win the consumer simply because you were there in their time of need...high five.

The negatives of Google AdWords

It’s expensive. Make no doubt about it, it is a bidding war and there is no end in sight. Commodity and utility suppliers who were complaining about paying 50c per click are paying as much as $25 to $80 per click. Today the biggest spenders have multiple products/services to sell to their clients.

Because it’s expensive many companies come with restricted budgets. If you’re going to war you don’t leave your big guns at home, you meet the enemy face to face after burning the bridge. We see so many who come and go on AdWords, good companies with poor execution and strategy who have come, tried and failed.

What conversions are achievable with Google AdWords?

Conversions are the by-product of knowing your target audience and their preferences.

How you capitalise on this data largely depends on the vehicle you use. You could serve your website or a landing page. Think of a website as an educational telling platform and a landing page as a nimble selling machine.

You wouldn’t expect the family SUV to beat a purpose built sports car around a race track. Each has their purpose but where a landing page shines is in turning consumers into buyers today. It will bring home the trophy every day of the week.

With landing pages and enough data you can fine-tune your offer and the consumer’s user experience over time and turn a 5% converting campaign (a website average) into a 25% converting campaign or more. It means you’d move from 10 conversations in month 1 or 2 to having 50 conversations in month 5 or 6.

To put this into perspective most websites only convert at 3% - 5% on AdWords. So in month 5-6 you would have as many conversations in one month as your competitor would have had in 6 months. It’s a beautiful thing.

In conclusion

For pure lead generation don’t rely solely on affiliate leads. You’ll build sales volume but you’ll learn very little from the exercise.

Use Google AdWords as a training ground to get a greater understanding of your consumers’ likes and dislikes. Then create an affiliate campaign. Once your landing pages are converting at 15% - 25% you can then replicate this over on your website and start nurturing those people who need a little more time to make a decision.

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Posted: 16 Mar 17 By: Comments: Be the first to comment! Category: Marketing Strategy
Steve Palmer

Steve Palmer is the Joint Founder and CEO of Showtime Digital. Steve has been in B2B sales since 1997 but influencing people and behavioural science has been a long-term passion.

The magic he brings to his clients is in knowing how to engage their audience. His goal is to help businesses understand the deeper reasons of why consumers convert online with them.

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