Features of Affiliate Management Software
This article explains the kinds of functionality basic to all affiliate management software. The author considers new trends in features and assesses their actual importance to the typical merchant. Then he discusses in detail 13 different features, where they can make a difference, and what software vendors offer them. In particular he outlines the various types of commission structures possible and how they can be used to maximize appeal to super affiliates.
This article discusses the various features of affiliate management software. Some features are found in all software with minor variations. Some features are unique but not important. Others are unique but very important. I’ll try to help you sort through what to look for as you are shopping for affiliate management software.
Nearly all affiliate programs provide the following basic features.
- A customized webpage on which affiliates can sign up for the affiliate program.
- A customized password-protected section where affiliates can find the HTML codes for banner and text ads with hyperlinks containing their unique affiliate IDs.
- A password-protected section where the merchant can set up ads and links; approve, modify, and delete affiliates; send bulk e-mails to affiliates; set commission rates; set cookie expiration times; approve transactions for payment of commission; and list commissions due to be paid to affiliates. Merchants can choose to let the first affiliate link remain or displace a previous affiliate cookie if the shopper goes through another affiliate link after the first.
How these functions are accomplished varies some from one software program to another, but all have these features. They constitute the achievement of the first generation of affiliate programs.
Programs have changed substantially since I studied them in 2001. That year I counted 18 software programs; now the number is over 50. Many of today’s programs represent a maturing software — well tested and steadily improved. Now I am seeing improvements such as:
- Extreme flexibility in calculating commissions for impressions, clicks, sales, and leads, or a combination of commissions methods which can be applied at the same time.
- Commissions that can be set differently for different products, affiliates, and ads.
- Export of payment data to PayPal mass payment or popular accounting programs.
- Sophisticated e-mailing to groups of affiliates with both HTML and text.
- Sophisticated tracking of affiliate sales as well as sales from other types of ads.
I’ll discuss each of the features in turn and try to explain what to watch for. Often I’ll list examples of vendors that offer various features. My lists aren’t complete because vendors’ website descriptions aren’t complete and several hadn’t responded to my inquiries by press time. I’ve found that the biggest affiliate network vendors, while the have very capable and flexible products, provide less information on their sites and are less likely to respond to inquiries than the smaller ones; so if my lists seem slanted towards the smaller companies, that’s why.
Domain to which the Affiliate Link Points
In the last several years merchants have become savvy about search engine optimization (SEO). A site’s rank in the search engines — a small company site, at least — is significantly elevated by having more incoming links point to the website. An affiliate program is an excellent way to get incoming links to your site — but only if the affiliate links themselves actually point to your domain.
In 2001 you had a choice. Licensed software on your server or custom-programmed systems had affiliate URLs with the merchant’s main domain. Network and hosted ASP sites did not (with very few exceptions). These days the picture is dramatically different. Now, nearly all affiliate software provides a way for the affiliate links to point to merchant’s site — so long as the merchant insists.
- Licensed and custom software on your own server always points to your site.
- Hosted ASP software uses one of two approaches. Either of these is acceptable:
- A small script installed on the merchant’s site detects affiliate click-throughs to the domain name, then redirects those click-throughs to the hosted ASP server. Here the click-throughs are recorded according to their unique affiliate ID in a database on the hosted ASP server and finally redirected to a landing or product page on the merchant’s domain.
- A small script installed on the merchant’s site detects affiliate click-throughs and communicates the unique affiliate ID to the hosted ASP server where that information is recorded.
There isn’t clear agreement, however, that “clean” affiliate links (without question marks, without query strings, and without a cgi-bin in the path) are more search engine friendly than others. A couple of vendors brag on their clean links. But at some point clean links lose functionality. The link usually needs to communicate at least two elements besides the domain name — (1) the unique affiliate ID (usually but not always a number), (2) the target landing page on the merchant’s site (usually a number), and sometimes (3) the particular ad used.
However, there’s another side of this issue. I spoke with Steve Messer, CEO and founder of LinkShare. He contends, “Many merchants are under a mistaken belief that this is a feature that will improve their link popularity in search engines.” LinkShare has done tests, he says, that show little positive search engine ranking bump from affiliate links. I wonder, however, if this is true of all websites? Small online stores with little brand recognition may get a large relative rank increase from affiliate links, whereas a larger, well-branded store may not notice much rank increase at all, since they already have many links pointing to their website.
But Messer makes some good points about links pointing to the merchant’s domain that larger companies should take quite seriously. “Using a merchant’s domain name in the affiliate link,” he says, “completely exposes a merchant’s affiliates to its competitors. It’s too easy to look up a merchant’s domain in any search engine, find all affiliate sites linking to that merchant, and then perform a cross reference with a site like Alexa to identify all the high traffic driving affiliates.”
Additionally, spyware and adware applications are designed specifically to identify and hijack affiliate links, often using this structure to trigger their programs, that is, pop up an add on the infected computer showing an ad for a competitor.
“LinkShare links are designed to be encrypted,” says Messer, “in order to protect our clients from all of the above without negatively impacting popularity. LinkShare will soon enhance this feature by upgrading to a new encryption scheme that will be more effective in our continued battle against spyware/adware.”
Messer concludes, “Using affiliate links with the merchant’s domain may achieve some minimal gain today, but LinkShare believes that this short term benefit weighed against the risk of exposing the network to competitors and spyware is not a good trade-off for any merchant or affiliate.”
The concerns Messer raises are real concerns, especially for companies flying above the radar. Larger companies should probably move toward encrypted links. On the other hand, smaller merchants may want to continue with links to the merchant’s own domain for the link popularity it gives.
Categorizing Affiliates into Various Groups
A more recent feature in many of the better programs is the ability to assign an affiliate to a particular group. If you’ve done much affiliate marketing as a merchant you quickly observe (unless you are quite selective) that only 1% or 2% of your affiliates bring you many sales. The other 98% are pretty much worthless. To be more effective in developing the potential of your super affiliates, it is useful to be able to place them in groups for several purposes:
- Assigning commission levels
- Many merchants now offer a higher commission rate to their best affiliates to encourage even better placement of ads and participation in promoting the merchant’s products.
- Displaying available ads. If you are a pet store, you don’t want to show cat affiliates the ads for reptiles. If you can categorize affiliates, you can display to them only the ads appropriate to their category.
- Sending e-mails.If you have 10,000 or 20,000 merchants and only 2% really are interested in receiving and acting upon your e-mails, don’t send the non-performers e-mail that may label you as a spammer. When you group affiliates, you can e-mail to selective targets — those interested in particular products, high performers, new affiliates you are trying to train and develop, those in different industries, those with different kinds of websites. It allows you to target the e-mails you send to be appropriate for the recipients and the ads you show to be appropriate to different target audiences.
Affiliate program vendors that offer segmenting of affiliates include: Affiliate Wiz, AffiliateClicks, AffTrack, AssocTRAC, DirectTrack, FloppyBank, Interneka, iSalesForce, MyAP, PartnersManager, PostAffiliate Pro, Sharasale, TradeDoubler, Ultimate Affiliate, and Your Own Affiliate Program. Leadhound can filter its affiliate network geographically.
I encourage you to look for affiliate management software that allows at least some grouping of affiliates.
Ad Tracking Capabilities
Some of the better affiliate management software is designed to do sophisticated ad tracking — not just affiliate banners and text links, but PPC search engine keyword ads and ads displayed on ad networks. Yes, good ad tracking software is available, but why not use one tool to track advertising channels, rather than two or three tools?
I don’t see this as a “deal breaker,” but if you can find affiliate software that offers easy-to-use ad tracking, consider it a big plus. Few merchants can afford the luxury of focusing on just one advertising channel. We must get the best out of several channels. Let’s insist on tracking it with one comprehensive piece of software rather than several.
At present this feature is offered by only a few vendors. These include: Ad Server Solutions, Aff_Manager, Affiliate Wiz, AffiliateShop, AssocTRAC, DirectTrack, iDevAffiliate, LinkShare Search Advantage, KowaBunga’s MyAP and AffiliateClicks, TradeDoubler, and a few others. Among shopping carts with integrated affiliate program, 1ShoppingCart has offered ad tracking for years.
Check Writing and Mass Payment
A check writing service has long been offered by network vendors. Now several vendors offer this service, sometimes an option. These vendors include: Affiliate Tracking Network, Affiliate Window, ClickBank, Commission Junction, FloppyBank, FusionQuest, Leadhound, LinkShare, MyAP, Sharasale, TradeDoubler, and DGM Australia.
How important is check writing? For large companies that are paying thousands of affiliates a month, it is quite important. However, since only 2% of affiliates really produce, the number of checks smaller businesses must write each month isn’t excessive.
A new trend is to require affiliates to give a valid PayPal e-mail address, export the payment file which contains this information, and import it into PayPal Mass Payment (https://www.paypal.com/cgi-bin/webscr?cmd=p/gen/batch-outside). However, PayPal only allows members from about 35 countries. A small number of countries can withdraw money to a bank account in their country. If you’re developing an international network of affiliates, requiring payment by PayPal could be a detriment. Mass Payment costs the merchant 2% of each payment, capped at a maximum of $1 per payment. Some international vendors also offer payment through MoneyBookers.com.
Most vendors offer export of payment information, but look very closely at this. Sometimes the format of these exports needs to be set up carefully each time and cannot be preset. Let’s say you want to export to QuickBooks. Does the program give you this file in native IFF format so the transfer is seamless? If not, you’ll waste a lot of time exporting and importing.
Links to Multiple Product and Landing Pages
Some of the earliest out-of-the-box affiliate programs linked to the merchant’s home page or perhaps a few products. Some vendors succeeded in allowing merchants link to any page on the site, but the resulting URL was ugly and much too long.
The current generation of affiliate management software vendors typically allows links to any webpage on (or off) the merchant’s site. The most popular programming technique is for the merchant to enter all the product and landing page URLs. These are listed in the database with each page assigned a number or short name. The resulting URL can be kept reasonably short.
In the example above, AID identifies the unique Affiliate ID and PAGE identifying the particular webpage the shopper should be redirected to.
Data Feeds to Affiliate Sites
Some vendors now provide data feeds from the merchant that allow affiliates to populate an entire store with hundreds or thousands of product names, descriptions, image locations, SKUs, affiliate URLs, etc. If you are a merchant that offers online sales of just a few products, you don’t need this feature. But if you serve affiliates with hundreds or thousands of products, then look for the ability to supply XML data feeds to at least some of your affiliate sites. Most of the large network type affiliate software vendors offer this feature and a few of the ASP hosted vendors. These include Commission Junction, LinkShare, TradeDoubler, MyAP, clixGalore, DirectTrack, and Interneka.
My advice: Don’t purchase affiliate management software that doesn’t allow you to link to unlimited products since your range of products may well grow. If you have hundreds and thousands of products, look for a vendor that offers a data feed to your affiliates.
Tiers of Affiliates
Regular affiliates don’t really care, but super affiliates with lots of traffic like to promote affiliate programs that offer at least two tiers. Here’s why.
Merchants can offer a basic commission to affiliates — say 20% for a downloadable product. But if any additional affiliates sign up for the merchant’s program after coming to the site through an affiliate link, they sign up under the first affiliate. When a sale takes place, the affiliate whose link sends the customer gets a 20% commission, while the first affiliate gets an additional 5% for no additional work or traffic. This encourages super affiliates to promote a merchant’s affiliate program for him.
Most vendors offer up to two tiers or levels and stop with that. But considering the possibilities, Multi Level Marketer (MLM) eyes light up with dreams of building huge downlines, 5 or 6 or
a dozen levels deep, earning money on each sale in their downline. A few vendors offer many tiers, including: Ad Server Solutions (unlimited tiers), Aff_Manager (10 tiers), AffiliateGuerrilla (5 tiers), Affiliate Wiz (5 tiers), AllAffiliatePro (up to 12 tiers), ClickAffiliate PRO (up to 5 tiers), DH-MLM (9 tiers), Friendly Affiliate (N-levels), iSalesForce (10 tiers), Managed Affiliate (5 tiers), Post Affiliate Pro (10 tiers), TradeDoubler (multiple tiers), and Ultimate Affiliate (12 tiers).
Except for MLM types of promotions, nearly all mainstream merchants consider one or at the most two tiers quite adequate for their needs. More is not better.
One of the most important features of an affiliate program is the merchant’s ability to reward affiliates appropriately to fit a variety circumstances and strategies. I’ve had an affiliate program for the last six years. I began with selling subscriptions to a single product, Web Marketing Today Premium newsletter. Then I added books, both e-books and print-on-demand books. Then I looked for a way to provide a different commission structure entirely for selling seats to one-day seminars — and was blocked by software inflexibility until very recently. Flexibility in the commission structure is vital. Fortunately, in the last several years an increasing number of software vendors have expanded their products to offer many options.
Set Minimum Commission Payments
All vendors allow the merchant to set a minimum amount of commission to be paid. You don’t want to be cutting checks for $5. Most of these minimums are at $20 to $50. Such minimums don’t affect your best affiliates, but keep the low performing affiliates from consuming valuable time.
Pay per Sale or Lead, Fixed Rate or Percentage
Nearly all software vendors offer the basic commission structure of pay per sale, either a fixed rate or a percentage of the sales price. With a $25 sale you can choose to pay a 20% commission or a $5 flat amount per sale. When a lead or a newsletter subscription is generated, of course, the payment would be a flat rate, not a commission, since no sale has been made. If this is what you need, any vendor will do — unless your needs change in the future.
Pay per Click
A number of vendors offer a way to compensate affiliates for the number of click-throughs. All vendors track click-throughs, since that is the point at which the affiliate cookie is set. All vendors display click-throughs in statistical reports for both the merchant and for each affiliate. But not all offer the ability to track click-throughs as a way of compensating affiliates. There are reasons for this: (1) Click fraud is a problem with the large search PPC companies such as Google and Overture that have the means and dedicated staff to watch for and stop fraudulent clicks. It is very difficult for affiliate vendors, much less merchants, to detect and stop all types of PPC fraud. (2) Most merchants prefer, when they have a choice, to pay only when a sale is made. (3) The original affiliate model was per sale or lead, and some vendors haven’t expanded beyond this model.
However, some merchants need pay per click advertising programs because of their attractiveness in recruiting affiliates. A PPC feature is available with a number of vendors, including: Aff_Manager, Affiliate Wiz, AffiliateClicks, AffiliateShop, AffTrack, Click Affiliate PRO, clickXchange, clixGalore, Commission Junction, DirectTrack, iDevAffiliate, Interneka, Leadhound, Lead to Sale Tracker, LinkShare, MyAP, MyReferer, Partners Manager, Post Affiliate Pro, Referral Software, Sharasale, and TradeDoubler.
Mixing Commission Types on the Same Sale
An important goal for merchants is to make their affiliate programs so attractive that they’re hard to pass up. Thus some vendors now offer the ability to mix and match compensation methods, such as mixing a percentage commission with a flat amount per sale.
For example, you could offer $5 per sale plus 3% of the sales price. This allows a merchant to limit costs per sale, but also offer some reward for volume. Or you could offer 5 per click plus 10% of any resulting sales.
I’m not suggesting these particular ways of rewarding affiliates. But in the increasing competition for top performing affiliates you need the flexibility to offer an attractive compensation package.
Not all vendors provide the same degree of flexibility, but vendors that allow you to mix compensation types include: Aff_Manager, Affiliate Wiz, AffiliateShop, AllAffiliatePro, Commission Junction, Leadhound, MyAP, Sharasale, TradeDoubler, Ultimate Affiliate, and Your Own Affiliate Program. A few other vendors may offer this, but may not have made it clear on their sites.
Set Different Commissions for Each Product
One of the newer ways of setting commissions is on a per product basis. Cost per product allows merchants to reflect different compensations for different products or classes of products. Since this requires a product database within the affiliate program, this form of compensation isn’t as common. It is included in: Ad Server Solutions, AffiliateGuerrilla, AffiliateShop, AssocTRAC, Commission Junction, DirectTrack, MyAP, MyReferer, PartnersManager, ProTrack Pro, and Ultimate Affiliate.
Recurring or Lifetime Commissions
For memberships and subscriptions where a customer will pay every month or renew annually, some merchants offer recurring commissions. Some vendors offer a simple recurring commission each month. AllAffiliatePro allows different amounts, such as 40% of the sign-up fee, 20% of the first rebill, and 10% thereafter. MyAP provides a way to handle additional sales to the same customer without relying on cookies. Vendors offering recurring commissions include: Aff_Manager, Affiliate Tracking Network, Affiliate Wiz, AffiliateShop, AllAffiliatePro, DH-MLM, DirectTrack, Interneka, iSalesForce, MyAP, MyReferer, PartnersManager, Post Affiliate Pro, and Ultimate Affiliate.
Set Different Commissions for Each Affiliate
Most, but not all, vendors also allow you to override your normal commission structure to pay your better producing affiliates at a higher rate. This may allow your program to be more attractive to super affiliates that bring the bulk of your sales. Competition for these super affiliates can be fierce in certain industries so the ability to match the competition’s offer when doing personal recruiting may be important.
Software vendors typically do this in two ways: (1) Offer a way to change the commission structure on each affiliate’s record, or (2) categorize affiliates into different groups, each of which has a different commission structure. I don’t see a particular advantage of one approach over another.
Special Incentive Commission Structures
Some of the more sophisticated vendors offer various types of inducements to affiliates. For example, Ultimate Affiliate allows merchants to offer a “fast start” bonus that gives new affiliates a higher commission level for the first month or so after they sign up. This is designed to give the affiliate an incentive to set up the ads and links immediately. Ultimate Affiliate also gives merchants the ability to offer an immediate sign-up bonus whenever an new affiliate signs up in an older affiliate’s downline. This is of particular interest to MLM operations.
AffiliateShop offers a stepped commission model based on the number of sales. iDevAffiliate offers integrated performance rewards that automatically increases payout levels based on the number of sales or the amount of sales.
Most of the largest network vendors, such as Commission Junction, will offer their merchants some kind of incentive structure. Other vendors include: Aff_Manager, PartnersManager, and Your Own Affiliate Program.
Manual Entry of Commissions
If you have several sales channels, such as online orders and phone orders, your affiliate program should indicate which affiliate was responsible for the order and allow for manual entry of commissions.
Some merchants are tempted not to pay commissions on orders that are consummated by phone. After all, the affiliate won’t know. That is a serious mistake. Building a team of high performing affiliates is based on a combination of trust and regular, attractive compensation. If serious affiliates don’t believe they are being compensated adequately by one company, they’ll find another to promote. I stopped promoting a high quality e-mail service company because I knew I wasn’t getting credit for lots of orders made by phone.
MyAP provides a script that reads an affiliate cookie on the “Contact Us” page and display the unique affiliate ID as an “Extension” or “Department” or “Discount Code” next to the phone number. Telephone order takers can be trained to ask callers for this code (if it exists) and credit orders appropriately. Similar systems are available through an increasing number of vendors, such as: AffiliateClicks, AllAffiliatePro, and Ultimate Affiliate.
Multiple Sites from Same Software
If you have several sites, it can be handy to use a single software program to manage affiliates for all the sites. Some vendors specifically advertise this capability, but many may offer it, perhaps for a higher price. You’ll need to ask. To make this work, the software would ideally:
- Redirect affiliate click-throughs to different domains.
- Group affiliates by which site they signed up under.
- Show site ads and graphics by affiliate group, and restrict other groups of affiliates from seeing them.
Some vendors that offer this type of functionality include: Affiliate Tracking Network and Ultimate Affiliate.
Nearly all vendors provide a section of the website for affiliates to select text messages or graphic banners of various sizes to display on their sites. Then either the vendor or the merchant (in the case of licensed software installed on the merchant’s server) provides banner serving services to the affiliates. The HTML code supplied to the affiliates provides both the affiliate link as well as the URL to display (and often track) the banner on the affiliate’s webpage.
One feature available with a few vendors is to allow the merchant to rotate several different banners on his affiliates’ sites. This way the merchant can test to see which banners get the highest click-throughs and sales. Eventually, the only the highest performing banners are displayed on the affiliate sites. Vendors that offer this include: AffiliateClicks, MyAP, Affiliate Wiz, and Affiliate Network Pro.
Many vendors are able to track the number of banner impressions on affiliate sites by inserting an unique affiliate ID encoded in the URL for the banner image (sometimes called a “web bug”). This allows merchants to determine click-through rates for various affiliates and quickly spot affiliates to work with more closely to improve their performance.
Some vendors have the capability of spidering affiliate sites to see if banners or text links have been installed. If not, this can generate an e-mail encouraging the affiliate to set up the banners.
A few vendors act as both affiliate programs and ad networks. Publishers are encouraged to provide a generic spot where banners are displayed. The vendor or network then serves banners on a rotational basis into this spot, paying the affiliate on a per impression, per click, or per sale basis. The vendor tries to match the available advertisers with the pool of websites in the network. Sometimes the match is good; often it is very poor — and so are the results for the publisher.
Vendors offer varying types of reports. But these are difficult to assess without using each of the software packages in turn, so I haven’t described them here. All vendors offer at least the basic metrics. Network vendors probably have the widest variety of analyses available to their merchants.
Replicated Affiliate Pages
One aging approach to affiliate marketing provides each affiliate with his own webpage or mini-site — hosted on the merchant’s site. The idea is that an affiliate could promote the merchant even if he doesn’t yet have his own website. However, this is a flawed concept. Affiliates without a website are affiliates without any traffic to send to the merchant’s site.
ReferralSoftware.com claims that the self-replicating page feature “allows your affiliates to promote your web site URL directly. They will also dramatically increase your search engine placement by increasing your link popularity.” I doubt this. Most affiliate URLs these days point to the merchant’s site and increase link popularity without the need for self replicating pages.
If you begin to multiply your content in sites all over the web, search engines begin to smell spam. If your competitors report you, it could spell trouble. Also, the more replicated websites you produce for affiliates, the more competition you create for each of them. More websites doesn’t equal more traffic. Be very careful with replicated websites.
I don’t see a big value in the ability to produce replicated webpages or sites for affiliates. These mini-sites also can fill a lot of storage space on the merchant’s site. However, vendors that offer this feature include: Ad Server Solutions, AffiliateShop, AffiliateClicks, CyberTrakker, Friendly Affiliate, Interneka, MyAP, Referral Software, SalesDoubler, Ultimate Affiliate, and Your Own Affiliate Program.
Various fraud protections are available, though vendors sometimes don’t tell on their website all the protections they offer so as not to alert the fraudsters. Protection may vary from flagging or preventing duplicate subscriptions, to stopping duplicate orders from the same IP address, restricting the domain of URLs, cookie checking, URL origin tracking, etc. When you narrow down your software choices to a few, then ask each vendor what fraud protections are in place with its software.
International and Language Flexibility
Nearly all vendors allow the merchant to set the currency symbol to a $, ,, etc. But a few allow translation of the entire affiliate system using a single configuration page for that language. Some of these language-capable vendors are: Affiliate Network Pro, MyReferer, and Post Affiliate Pro. But if you need this feature, ask the vendor. It may be available but not publicized well on the websites.
Yes, vendors sometimes offer a confusing array of features. Hopefully, this explanation will help you understand which are important for your needs.