What Is Affiliate Marketing & How Can It Help Your Business

Kiwi consumers have embraced online shopping; a recent Nielsen report estimated the value of online spending in New Zealand in 2014 at $4.15 billion. Retailers are now competing for a slice of a much larger pie and as such, a more sophisticated blend of online marketing channels is required. Affiliate marketing is one of those channels, in recent years it has grown from strength to strength and continues to evolve at a rapid pace. If it’s something that you’ve heard of but you’re not sure about, then here is a breakdown of what you really need to know.

Essentially affiliate marketing involves other people advertising and promoting your products online, driving customers to your website and you paying a commission for the sales that are generated. Like other online marketing channels it’s highly trackable so you can see exactly where your referrals and sales are coming from, but unlike SEO, social media marketing and display advertising it requires very little investment from you in terms of both time and money. In fact, you could start an affiliate marketing program without any investment at all – just sign up to an affiliate network and you only have to start paying commission when sales come through. It’s also flexible depending on your goals as you can also choose whether you pay per sale, per click or have another action in mind such as a newsletter signup.



So what are the benefits of using Affiliate Marketing?

Increasing your brand visibility

The type of promotion you will get from an affiliate program will vary from bloggers writing about relevant topics to reward programs and coupon websites all publicising your brand and products to their readers and members. Affiliates already have their own websites, their own audience and often a list of subscribers or followers. It’s a very low-risk way of creating brand awareness and gaining new customers. Many coupon code websites have white label deals with other big publishers which means that your promotions might show up on the homepage of a big online magazine and rather than paying for this space you’re only paying commission on actual sales.

Increasing targeted traffic

Due to the nature of publishing, the visitors who click on a link to your website are likely to be very targeted. If someone is reading a review of a new camera then chances are they are in the market to buy one. Affiliate links act as an incentive for review sites and bloggers to talk about your product. You can also utilise coupons to act as a ‘trigger to buy’ without devaluing your brand.

Helping boost your search rankings

With a lot of people writing about your product and linking back to your website, plus increased brand mentions/citations, search engines will see your site as more relevant which can help with SEO. Of course with bad links potentially hurting your SEO their is a slight risk of some harm but if you use a reputable affiliate marketing program this risk is diminished and manageable.

Glassons currently offer affiliates an 8% commission on all sales they generate.

Glassons currently offer affiliates an 8% commission on all sales they generate.

With high internet penetration and a reliable postal service, plus the growth in mobile technology being used for purchases, online shopping is only set to grow in New Zealand. Currently around 34% of what Kiwis spend online goes to overseas retailers, so there is clearly significant potential for local retailers to take some of this back. The growth in global shopping also presents a huge opportunity for New Zealand businesses to sell their products and services overseas.

So how can you make affiliate marketing work for you?

Start with some research

Contact publishers which you would like to work with and ask them about networks they use and how they think they could promote your brand. Decide what your main goals are and then speak to the networks to see if they can recommend the best way of achieving those goals. You can also join a network for free as an affiliate publisher to see what competition is already on there and how much commission they’re paying.

Use affiliates to reach your goals

For example, if your goal is to increase conversion rates, increase average order value or to reduce shopping cart abandonment then consider working with coupon code publishers to come up with a strategy. Research by Forrester found that that 60% of shoppers would reconsider an abandoned shopping cart if they had an online coupon for the store.

Use your affiliate program for testing

If you want to try out a new ad campaign then affiliate programs are a low risk way of doing it. For example rather than trying two types of display ads online where you have to pay for the space, add the banners to your affiliate program to see which gets most click-throughs and sales.

Invest time in building relationships

Whilst affiliate marketing doesn’t require much of your time you will get out what you put in. If you spend some time each month building relationships with your publishers you are more likely to get better quality leads, more exposure and feedback on what might work best to increase traffic and conversions.

Stay in control

Make sure to keep tabs on who is publishing your links/banners. Ask the network if you can approve each publisher you work with and provide them regularly with up-to-date information and lots of good quality banners so that you still retain control over your brand.

What is holding back affiliate marketing in New Zealand?

While affiliate marketing is certainly on the rise in NZ we haven’t seen the levels of uptake and growth that are apparent in more mature markets like the UK, USA, Australia and other countries. Why is debatable, there are obviously many factors. One reason could be that the affiliate networks are not yet focussed on New Zealand, many simply lump it in with Australia because it is the bigger neighbouring market. There are only a few of the big networks with any kind of focus on New Zealand, meaning that for publishers it is difficult to try and find Kiwi businesses which they can work with. Here are some of the most popular networks which work with New Zealand retailers:

You can also access a large list of retailers that offer their own affiliate programs direct on this website.

Even when you account for population, there are fewer bloggers in New Zealand than in countries with a more mature affiliate community. This could of course be explained by the lack of attention from the networks – if more networks wanted to push Kiwi retailers then there would be more scope for bloggers to make money and one assumes the numbers would increase. If we compare New Zealand to Singapore – another ‘small’ country (in terms of population) with similar levels of internet penetration – we see that Singapore has had more focus from affiliate networks and now has a blossoming community of bloggers and affiliates. In 2013 consultancy firm A.T. Kearney identified New Zealand, alongside Singapore, as one of ten ‘small gems’ globally – countries with a population under 10 million that are highly attractive to online retailers.

Another possible reason that affiliate marketing has been slightly held back in New Zealand could simply be that more traditional New Zealand retailers are apprehensive about teaming up with affiliates, either because they don’t know enough about it or because they’ve heard negative accounts of what it might involve. Affiliate marketing has been given a bad name in the past by spammy websites selling diet pills and get-rich-quick schemes. But the potential gains should make it worthwhile to any retailer wishing to grow their business online – why else would the world’s largest brands be spending so much money on it?

Whatever the reasons for where we are, I believe that many Kiwi retailers are now ready to move towards a more performance based marketing model and take affiliate marketing to the next level in 2015.

About The Author – Jochem Vroom

Jochem Vroom (@jochemvroom) is cofounder and managing director of Imbull. He has eight years’ experience within the affiliate sector as a manager, blogger, publisher and speaker. Jochem is currently working on the global couponing site Flipit.com.

Leave a Reply

Your email address will not be published. Required fields are marked *