Why don't you just look at the commission rate in affiliation?
July 13, 2023
The commission rate, in affiliation, is the percentage you receive on a sale generated from your site. The remuneration system is simple: when a sale is validated (or an action such as registration, download, etc.), a script checks whether it should remunerate a potential business contributor.
It may seem tempting to promote advertisers offering the best commission rates. However, that's not the only factor you need to take into account to optimize your income as an affiliate. To get an overview of the key elements and make the best choices, here are a few explanations.
Why commission rates aren't everything
When you're first starting out as an affiliate, you may be tempted to create campaigns for advertisers with attractive commission rates. While this isn't necessarily a mistake, it's important to think twice before committing yourself.
The commission rate should not be the only criterion for decision-making. There are many reasons why an advertiser may offer high commissions, such as :
The advertiser is a newcomer to its market and is seeking to establish itself.
The advertiser doesn't speak French and wants to test the market before pursuing its efforts.
The advertiser has no marketing skills and expects the affiliate to take care of it.
The affiliate program concerns dematerialized goods that allow this level of remuneration (no manufacturing, storage or shipping costs).
All these reasons may justify generous affiliate compensation. But in other cases, where's the catch? It's not so much a trap that needs to be avoided, but rather details that need to be known, and which can be found in the terms and conditions of each program.
Conditions for joining the program
It is important to take the time to read the terms and conditions of each program carefully, bearing in mind the following points:
Geographic zone: if you're targeting a French-speaking audience, make sure the advertiser works in this zone and that their site is available in French.
Keyword purchasing policy: most programs prohibit keyword purchasing to avoid raising the stakes on SEM (Search Engine Marketing) campaign budgets. The absence of such a policy means that you'll have to fight against agencies that are well versed in keyword purchasing. So be careful.
Cookie lifetime: even if the commission rate is high, it's no use if the cookie's lifetime is too short. Give preference to programs offering long-lasting cookies, unless the advertiser has a very high conversion rate.
Non-commissioned products: some advertisers decide not to pay for all their products, considering that their flagship products don't need additional advertising.
New customers: some programs only reward new customers, so existing customers are not taken into account. In certain sectors such as telecoms, where attrition (loss of customers) is high, this factor is crucial.
The cannibal product: some products, particularly security software, delete tracking cookies, which they consider to be surveillance. At the time of purchase, the product may have deleted the affiliate platform's tracking cookie, resulting in the deletion of the commission.
Other indicators to watch
As an affiliate, it's important to devote time to analyzing the performance of the programs in which you participate. While the commission percentages offered by different programs can be high, it's essential to check key indicators to select the most profitable programs and maximize your revenues.
On the platforms, the various KPIs (key performance indicators) provided for each advertiser will enable you to favor those that work best. Here are a few acronyms to keep an eye on:
EPC (Earning Per Click): this is the average revenue per click. When you divide an advertiser's commissions by the number of clicks you send them, you get an EPC. It's also called E-CPC (cost per click) when it's a calculated CPC. This indicator enables you to identify those advertisers who have a lower conversion rate than others.
CTR (Click Through Rate): closely linked to the EPC, the CTR or conversion rate indicates in percentage terms the number of people who have been converted, i.e. who have carried out the action for which you are being paid after being redirected to the advertiser's site. For example, if 5 out of every 100 people you send buy a product, you have a conversion rate of 5%. The higher the rate, the better.
Cancellation rate: as the name suggests, this rate represents the number of sales that have been cancelled before you can collect your commission. This is because customers sometimes retract their sales and the commission is cancelled. If the cancellation rate is too high (over 5%), don't hesitate to contact the advertiser to find out more.
It's important to note that these indicators don't just reflect merchant performance. The traffic you send may be of variable quality and will not respond in the same way on every site. So give advertisers a chance before choosing the ones to which your audience responds best.
It's also important to take account of seasonality in affiliation, and not to be too quick to judge a drop in your KPIs. Before taking any optimization measures, it's advisable to look at medium-term results.
📌 Key points to remember
Commission rates aren't everything.
Read the program conditions.
Give the "Cookie Pool" (the set of cookies stored by an affiliate program) some time to form.
In affiliation, the prospect of making money can be a source of motivation, but don't let this objective blind you. Take the time to understand how the programs work and what their conditions are. This will help you avoid the disappointment of seeing your efforts fail to pay off for avoidable reasons. Nor should you forget to keep a close eye on the indicators that will enable you to adjust your partnerships to maximize your gains.
About the author
After successfully managing several companies in the tech world (Les Numériques, Doctissimo, Au Féminin...), Vincent Alzieu joined Affilizz as late co-founder in 2022 to bring his experience of media and affiliation.
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