Affiliate Marketing - Part 1: It’s Quiet Up Here. Too Quiet.

By now I think it’s been drilled into our heads how far behind Canadian e-commerce is compared to our US counterparts. What I don’t think gets enough attention is how far behind Canadian retailers are when it comes to affiliate marketing. Best Buy, Sears, and Staples are just a few of the retailers with thriving affiliate programs down south but without any affiliate presence in Canada. Industry events like LinkShare Symposium and Affiliate Summit in Canada? You can forget it.

The affiliate marketing space is something I’m involved in everyday. As the founder of RedFlagDeals.com, Canada’s largest bargain shopping community, we’re constantly in contact with affiliate managers, reading affiliate newsletters, and educating ourselves about what drives conversion. Our goal is to connect Canadian consumers with Canadian businesses and hopefully in the process generate a few dollars for our hard work.

I’d be the first one to say that I’m biased towards the affiliate marketing industry. But I’ve also seen the numbers behind it as a publisher – millions in sales, and we’re just one publisher. If I was a retailer in this increasingly competitive landscape, I know I would offer an affiliate program. With the choice between promoting equal products or services between two retailers, the publisher is going to promote the retailer with an affiliate program. Multiply that by the thousands of webmasters out there that could join and promote your store and that’s going to eat directly into market share.

Don’t get me wrong, I don’t think affiliate marketing is right for everyone, but conceptually and in many cases, it does make sense. Retailers pay a commission on sales or a cost-per-acquisition (CPA) generated. No sales or acquisitions, no payments. Don’t like how they’re promoting your brand? Remove them from the program. Managed properly, it’s a very powerful way to drive traffic and sales.

And the sale is just the beginning. Once you’ve got them as a customer, it’s the retailers’ job to deliver on the transaction and keep the customer for life. Now that’s got to be worth something.

Stayed tuned for Part 2 - options for setting up your affiliate marketing program.

Comments

[Simon Rodrigue]

Derek,

You and I have talked about this a couple of times. The issue from a retailers perspective is that there are not many publishers that can drive business to the site so having resources behind the program makes it difficult. We setup our program and let it run pretty much in auto-pilot, but we have now committed someone to run with it over the next three months to see what we can make of it but in the end we (publishers and retailers) need to figure out how we can all generate a return on affiliate programs.

Cheers,

Simon

[Derek Szeto]

Agreed. It's definitely takes some resources to make the program work. Affiliates need communication like any other channel partner.

The whole eco-system for affiliate marketing isn't fully developed in Canada. Publishers need these programs to generate revenue so that they can exist. Retailers need publishers to make the ROI back out so that the programs can exist. We need more of both in my opinion.

[Natasha]

Quiet? Hmm, perhaps I have over-sensitize ears then as I find there are a lot of affiliate program opportunities for those who are looking.

From Canadian Tire to CP Hotels, there are many companies across the nation with affiliate programs.

Where they tend to fail, is in dedicated affiliate management and service.

Ironic, no? You want a sales channel but don't put the effort into nurturing it.

There is, however, a program that fits all the best practice criteria...if you're specialty is promoting software.

Based in Montreal and with a full-time affiliate manager, SiteSell.com has run its affiliate program since before the turn of the century.

So, like I said...it's not very quiet to me :-)

Natasha
P.S. Almost forgot to "shout out" Upurea.com, based in Toronto. Its new affiliate program is giving companies like Sephora a run for its money.

[John]

This sounded more like a sales pitch/brochure than an article.

I think affiliate marketing is ripe for some innovation...I believe Seth Godin suggested that his Squido website was working on something along these lines

[Mitch Solway]

I am just not sure that Canada is set up well for strong affiliate programs.

I am relatively new to affilate marketing having just launched my first program on Commission Junction in March for Single Parent Love Life.

And one of the suprising things for me is just how little support there is in Canada..seems that there are very few "horses" that can drive any meaningful traffic.

The physical number of affiliates in Canada is small...and so are the players themselves.

Now...if you are selling to the world then you don't really need Canadian affiliates selling your stuff..because you can ship your product everywhere.

But, being an online dating service, local content is obviously critical. A New York affiliate can't drive me content from Oakville!

We've had nearly 2000 affiliates sign up for our site...but only 1 from Canada. Despite the fact that our customer base is 98% Canadian and our conversion rate is extremely high for the category.

I wish that there were some stronger players in Canada.

The same is true when dealing with the other affiliate networks like Advaliant and Blue Lithium. They are all over us to drive traffic from the U.S....but balk at Canada.

Perhaps it is just the nature of Canada being so large geographically with our customers spread out too thinly? Not sure.

But it is clear that driving Canadian traffic through affiliates is not a game breaker - at least not in my experience.

The model works much better in the U.S. and on a National vs Regional basis.

Mitch