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Affiliate Tracking Software, Explained | Publisher's Guide

Zach Levine, co-founder of Organic, has two plus decades of web engineering experience in media and publishing. He holds unique expertise in affiliate, having coded successful solutions across Bob Vila, Howchoo, Branded Holdings, SMG Worldwide, and more.

Affiliate Tracking Software explained, strategically and tactically, in less than 9 minutes

Background

Zach Levine started learning how to code as a teenager. Since, he has gone on to found multiple companies and possesses rare, extensive experience working in media as a coder slash engineer. In this video interview, he explains to anybody what it takes to succeed in affiliate as a publisher, the technical demands that get in the way, and ultimately a path forward to earning more money, more authentically, and with less reliance on remedial tasks or outdated affiliate tracking software. 

Zach, please give us an overview of affiliate marketing and affiliate tracking software.

"Affiliate marketing is a retailer or merchant paying a commission to someone who helps perform some action for them, whether it's helping you to sell something, or helping to get your app downloaded more.

It's very similar if you think about it to advertising, except it's, I'd say, a lot more targeted and hands-on."

How are media companies capitalizing on this trend? 

"Right now, the current global market is about $17 billion for affiliate in media, and that's up from $13 billion in 2016.

And this is because of increased competition in media, and decreasing ad rates, right? You have to diversify — it used to be weird to see CNN posting a mechanical keyboard guide. Now you wouldn't think anything about that, right?"

Please explain the terminology used in affiliate. 

—> begins at the 01:00 time marker 

"So you have a merchant — also known as a retailer — technically they're different things in commerce, but they're synonymous in affiliate. So that's the party that's paying someone to help accomplish a goal. 

The affiliate is the person who's actually being paid. So Bob Vila dot com is an affiliate, in this case, a publisher, but it could also be a content creator. It could be an influencer, it could be just some guy who mails out postcards, right?

And then there's the affiliate program, which is the actual contractual setup that says here's how you make money from me; how you're allowed to actually send traffic using these different methods like email. 

Then there's the affiliate network — the company that helps administer the affiliate program including approvals, payouts, and reporting. It's actually a really large tech stack that does all that stuff."

Please explain how affiliate marketing and affiliate tracking software work:

—> begins at ~ 01:50 time marker 

"So how an affiliate program works from the ground up is the publisher, or an 'affiliate,' signs up and gets approved — which is not as easy as you might think.

Somebody like Bob Vila, everybody knows them, they can go and get approved for any affiliate program and they get special terms and they can renegotiate those terms. So, smaller publishers will lose out a lot of the time until you/they hit a certain size.

So after you get approved for the affiliate program, you send links to the merchants to their website / products through an affiliate network, right?

Think of it this way: affiliate is when you click a link to a product on a publisher site and your ad blocker pops up, alerting you about a domain such as CJ or impact dot com. That's because the ad blockers are detecting tracking URLs S that affiliate networks use and route through.

And then the customer takes an action like buying something, the customer gets the product, both the product and product referrer get paid.

So Amazon, one of the reasons it's so powerful is you get a percentage of anything they buy within 24 hours — that's called the cookie window or cooking period. And though it varies, you can actually in some cases negotiate for a longer cookie window.

So a user could click on a link right now and then tomorrow buy a pair of shoes, the publisher still gets a percentage of that as long as their link was the last one clicked. Remember, if a user clicks on some other affiliate link right before purchasing, all the credit goes to that last affiliate link.

And it's actually kind of surprising, Amazon doesn't require you to maintain some ratio of actually referring stuff — that would really help but whatever, it's probably hard. 

Anyway, the affiliate network pays either a fixed amount or a percentage and it varies by category in most cases. With Amazon, this changes constantly and I'm using Amazon as an example, but this is how it works for all of them.

They might say that you make 0% in this category, and for some purchases, you make 1%, with more specialization, for example, automotive and electronics, you could make 2% — and these are both low-profit margin items. In the high-profit margin categories, like health and beauty, you can earn 3% or 4%." 

Please explain the various ways that publishers make money in affiliate.

—> begins at ~03:30 time marker

"So the most common one is, is pay per sale and I put cost per sale or C-P-S because if you're looking at it from the merchant perspective, that's what you would call it.

There's also pay per action, which could be just for an action like, 'I want newsletter sign-ups,' or 'I think you're gonna send me quality leads; I'm gonna pay you a dollar for every newsletter sign-up you send to my, my newsletter — and then obviously if you send me a bunch of spammy stuff, I'll, I'll terminate  involvement.' So there are different rules I would come up with.

Then you have to pay per install, this is why your favorite youtube channel keeps talking about Clash of Clans and Age of Empire or I'm sorry, I'm really bad. I feel very old saying those wrong but they're getting paid for every single install. They refer to install, and much of the time these kind of get mixed in with the pay per sales. For example, Capital One will pay Nerdwallet hundreds of dollars for every new credit card activation. 

And then there's pay-per-click; this is rare. And this is usually only if your brand has a lot of weight where you can negotiate something like this or where the person that you're sending is the destination is very optimized. In other words, if, if they have such a great landing page that you could send traffic there and it's going to convert and make money, they'll pay you just for the traffic."

What are the challenges that publishers face when trying to earn more revenue via affiliate and affiliate tracking software? 

—> begins at ~04:45 time marker

"There are a few challenges of running and scaling an affiliate program or affiliate tracking software that most publishers face: 

#1: Disparate or non-existent reporting – how do I know what articles are making me money? Even now to this day, if you belong to the Amazon affiliate program, they [Amazon] make it very difficult to track where your conversions are happening. They require you to create a tracking ID beforehand that you then add to a link and you send along with the user. So you have to create one for every single article on your site and then you have to make sure it's consistently used...

And so you need to automate that, so you need engineering, and so on.

#2: Link and offer maintenance are very difficult.

For example, products go out of stock, they stop being carried, or these affiliate network links — as you can imagine are insanely long. They're huge and they're weird redirect URLs, and if you chop one character off in a lot of cases they break. You're of course also expecting authors to go in and take this huge URL that an editor sent them in Slack and it's just...it's a nightmare. 

#3: Revenue diversification is huge. For example, Amazon slashed their rates during the pandemic. There was a huge uproar because things were falling apart, and Amazon saw everyone shopping from home more, and they slashed their rates in some cases in half, and a lot more people got laid off. People in the media are afraid of that.

Think about if you're sending all your traffic to Amazon, if you have an article about the, for example, best mechanical keyboards — you just link to Amazon. And then it goes out of stock, and/or you're now more reliant on Amazon. 

But listen, they also sell it at Walmart, they also sell it at Target. However, in order to link to all those different destinations, what do you need? Well, you need a product card, you need multiple places that the person can click, and now you need a way of managing that. So — it's a huge problem with publishers.

Plus, most editors if they're gonna write a best skis article, they have the five skis in mind, they're gonna go in and they want to like make sure the title and the name of the article is right. It has to match sentence case vs. title case the publisher uses, and you have to adhere by publishing guidelines and make sure there's a quality image."

How you would solve the challenges publishers face when trying to sustainably earn revenue using affiliate marketing and affiliate tracking software? 

—> begins at ~06:45 time marker

"So we created a couple of novel things surrounding that — one is called a magic link, which is a single link that you link to the product — imagine linking to the mechanical keyboard, instead of linking to a page on Amazon.

Thus, a publisher can just go and if they're using WordPress, they install our plug-in, they search for a product, they can insert it as a product card, they can edit all the information in one place. For example, fixing the typo in the product name, or embedding the product onto their site. 

Plus, if it has multiple offers belonging to it, which I'll show you here in a second —>

OK, [screen sharing] this is the affiliate dashboard:

  • So you can search for a product in here. By default, it only searches your own products, but you can also search this entire product database, right? So an editor can go in and just click, 'copy' right here, and then they can paste this magic link.
  • I can click on it and this is the product information page. So the user can go in and change the title here. And if they're using a product card with this in it through the word press plug-in, it'll update there too. They can add all other kinds of stuff.
  • So, there's a lot that happens under the hood here. You can add additional offers like, for example, this is also sold at Walmart. So I'm gonna find it at Walmart.
  • Then you have the actual analytics component. Inside this dashboard, you can see these are all of the products in the last — I don't know, do a custom date range — and this is exactly how you actually manage all these things.
  • Keep in mind, this is a demo site, so there's all kinds of weirdness in here. But, you know, you can go in and you can change your default tracking ID, which is the affiliate — the thing that you're used to get paid.
  • Ok and let's say you have a bunch of Target links already and you don't have this product yet — this is what's called your API key.  Publishers can go in and I can add Target and it'll update all the links on my site to be monetized suddenly, which is actually pretty enticing.
  • Or here, apply for Walmart, get approved, add it, and then boom with zero other effort — a publisher instantly can start making more money.
Lastly, you got the page performance. This is obviously a demo URL but this shows you which pages are making you the most money. This is the total revenue that I've made;  these are the products that I sold; this is the revenue per click, which is an important metric.


Now, this is something that is like actually very hard to do without having a huge engineering team building, well, building exactly what my team and I already built."

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