At iSUBSCRiBE we spend a lot of money on PPC advertising. Over the years, as publishers have got more adept at using this source themselves, the keywords that we can bid on have been reduced.
Some publishers don’t let us bid on their brand terms at all. The smarter marketers allow us to bid, but set a maximum cpc. This means that they stay number one in the rankings and that their costs are not affected, but they benefit from the extra work and resource we put in. This means that the overall number of subscriptions they generate goes up.
But in over five years, no publisher has ever asked about our affiliate policy. Given that all the big publishers have their own affiliate activity, this is a huge, and potentially hugely costly, omission.
Are we, and other third party sites, driving up the amounts you are paying to affiliates? Are you losing orders that could be coming direct to you?
We’re actually very transparent about our affiliate terms. Generally we give 10% of the order value. This is lower than any other third party site and lower than nearly all publishers.
What we’ve avoided doing is giving better and better terms to grab market share. We know that with close on 3,000 magazine subscriptions we have a unique proposition for affiliates and don’t need to enter a bidding war.
Our 10% rate even applies to “3 for £1” style offers, so the affiliate gets just 10p for these sales, meaning we don’t get many trial orders from this source. Other sites pay a flat rate – £5, £6 or more is not uncommon – so the affiliate can make healthy sums by directing lots of traffic to these offers. As you can imagine, these orders aren’t necessarily of the highest quality.
More significantly, if other sites are paying more than the publisher, then the bigger affiliates are going to point traffic in the direction of those third parties. The publisher loses a direct sale and ends up paying the third party site for that order.
It also means certain bigger affiliates can, essentially, conduct an auction to drive up the cost of orders without doing any more work. They simply let it be known that they get better terms elsewhere.
Publishers should be asking more questions of their subscription agents and making sure that those agents are not giving significantly more generous affiliate commissions.
Basically, if your affiliate rates are better than those of your third party agents, you’re going to get an increase in your sales because the affiliate is going to push your direct links first.
Then you’ll be in the same position as those smart PPC marketers that I was talking about earlier. You’ll get more orders overall, but without your costs increasing.
So why aren’t you doing that?
As ever, if you want more information on this, just give me a call or drop me an email.