# Affiliate Marketing — Program Strategy

> Affiliate marketing is a performance-based channel where external partners (affiliates) promote your product in exchange for commissions on qualified actions. When structured well, it delivers predictable, profitable customer acquisition.

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## Program Setup Guide

### Platform Selection

Choose between building in-house or using an affiliate network/platform.

| Approach | Pros | Cons | Best For |
|---|---|---|---|
| **In-house (custom build)** | Full control, no platform fees, custom attribution | Engineering investment, slower to launch, limited affiliate discovery | Companies with dev resources and existing partner relationships |
| **Affiliate SaaS platform** | Fast launch, built-in tracking, affiliate management tools | Monthly fees, some customization limits | Most companies launching their first program |
| **Affiliate network** | Access to large affiliate pool, built-in compliance, payment handling | Higher fees (network override), less control, commoditized | Companies wanting rapid scale through established affiliates |
| **Hybrid** | Combine in-house tracking with network distribution | Complexity of managing multiple systems | Mature programs optimizing for both control and reach |

### Program Setup Checklist

- [ ] Define program goals (revenue target, number of active affiliates, target CAC)
- [ ] Set commission structure and terms (see Commission Optimization section)
- [ ] Select tracking platform or network
- [ ] Implement conversion tracking (pixel, postback, API integration)
- [ ] Create affiliate landing page explaining the program, benefits, and application process
- [ ] Write program terms and conditions (legal review required)
- [ ] Build creative asset library (banners, text links, email templates, product images)
- [ ] Set up affiliate dashboard (reporting, link generation, payout tracking)
- [ ] Configure fraud detection rules and monitoring
- [ ] Design affiliate onboarding sequence (welcome email, getting started guide, first commission tips)
- [ ] Establish payment terms and method (PayPal, wire, check; net-30 or net-60)
- [ ] Create internal processes for affiliate approval, support, and escalation

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## Network Comparison

| Feature | ShareASale | Impact | CJ Affiliate | Awin | PartnerStack |
|---|---|---|---|---|---|
| **Best for** | SMB, e-commerce | Enterprise, SaaS | Large brands, retail | Global programs | B2B SaaS |
| **Setup cost** | $625 one-time + $35/mo | Custom pricing | Custom pricing | $5,000+ setup | Custom pricing |
| **Network fee** | 20% of commissions | Negotiable | Negotiable | Negotiable | Negotiable |
| **Affiliate pool size** | 270,000+ | 100,000+ | 170,000+ | 240,000+ | 65,000+ |
| **Tracking quality** | Good | Excellent | Good | Good | Excellent |
| **SaaS features** | Basic | Advanced (partnerships) | Moderate | Moderate | Advanced (PRM) |
| **Reporting** | Standard | Advanced | Standard | Standard | Advanced |
| **Global support** | US-focused | Global | Global | Global (EU strong) | Global |
| **Payment handling** | Included | Included | Included | Included | Included |
| **Cookie duration** | Configurable | Configurable | Configurable | Configurable | Configurable |
| **Integration ease** | Easy (Shopify, WP) | Moderate | Moderate | Moderate | Easy (SaaS stack) |

### Selection Criteria

| Your Situation | Recommended Platform |
|---|---|
| E-commerce, Shopify store, budget-conscious | ShareASale |
| Enterprise SaaS, complex partnership models | Impact |
| Large brand, want established affiliate relationships | CJ Affiliate |
| European or global audience | Awin |
| B2B SaaS, want partner relationship management | PartnerStack |
| Need full control and have engineering resources | In-house + Rewardful, FirstPromoter, or Tapfiliate |

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## Commission Optimization

### Commission Models

| Model | How It Works | Typical Rate | Best For |
|---|---|---|---|
| **CPA (Cost Per Acquisition)** | Flat fee per converted customer | $20-$200+ depending on ACV | SaaS with predictable LTV, defined conversion event |
| **Revenue share (recurring)** | Percentage of customer revenue, ongoing | 15-30% recurring | SaaS with monthly subscriptions, long LTV |
| **Revenue share (one-time)** | Percentage of first purchase only | 20-50% of first payment | E-commerce, one-time purchases |
| **Tiered commission** | Rate increases with volume | Base rate + escalators at thresholds | Motivating top affiliates to increase volume |
| **Hybrid (CPA + RevShare)** | Flat fee upfront + smaller ongoing percentage | $50 CPA + 10% recurring | Balancing affiliate motivation with program economics |
| **Performance bonuses** | Additional payouts for hitting milestones | Varies | Driving behavior during specific campaigns or periods |

### Commission Rate Calibration

| Factor | Lower Commission | Higher Commission |
|---|---|---|
| Customer LTV | Low LTV (<$500) | High LTV (>$2,000) |
| Conversion rate | High (affiliates convert easily) | Low (hard to convert, need incentive) |
| Competition for affiliates | Few competitors recruiting | Many programs competing for same affiliates |
| Product awareness | Well-known brand | Unknown brand needing introduction |
| Sales cycle length | Short (same-session purchase) | Long (multi-touch, weeks/months) |

### Tiered Commission Structure Example

| Tier | Monthly Conversions | Commission Rate | Bonus |
|---|---|---|---|
| Bronze | 1-10 | 20% | None |
| Silver | 11-25 | 25% | $100 monthly bonus |
| Gold | 26-50 | 30% | $300 monthly bonus + dedicated account manager |
| Platinum | 51+ | 35% | $500 monthly bonus + co-marketing budget + quarterly strategy call |

---

## Affiliate Recruitment Strategies

### Affiliate Segments

| Segment | Description | Volume | Quality | Recruitment Approach |
|---|---|---|---|---|
| Content creators / Bloggers | Write reviews, comparisons, tutorials | Medium | High | Outreach based on existing content in your niche |
| YouTube / Video creators | Product reviews, tutorials, unboxings | Medium | High | Identify creators reviewing competitors |
| Email list owners | Promote via newsletters | High | Medium | Look for niche newsletters with engaged audiences |
| Coupon / Deal sites | List offers and discount codes | Very High | Low | Selectively recruit top-tier sites only |
| Comparison / Review sites | Rank and compare products | Medium | Very High | Ensure accurate listing, offer exclusive data |
| Social media influencers | Promote on Instagram, TikTok, Twitter | High | Variable | See Affiliate vs Influencer section |
| Niche community leaders | Promote within forums, groups, communities | Low | Very High | Build relationship first, offer program second |
| Existing customers | Happy users who refer through affiliate links | Low | Highest | Invite top NPS respondents into affiliate program |
| Agencies / Consultants | Recommend to their clients | Low | Very High | Partner program with higher commissions |

### Recruitment Outreach Process

| Step | Action | Timeline |
|---|---|---|
| 1 | Identify target affiliates (search for niche content, competitor mentions) | Ongoing |
| 2 | Research each affiliate (audience size, content quality, engagement rate) | Before outreach |
| 3 | Personalize outreach (reference specific content, explain why your product fits) | Individual emails |
| 4 | Follow up if no response (2 follow-ups, 5-7 days apart) | +5 and +12 days |
| 5 | Onboard accepted affiliates (send welcome kit, schedule intro call for top-tier) | Within 48 hours |
| 6 | Provide first 30-day support (check in at Day 7 and Day 21, offer content ideas) | First month |
| 7 | Review performance and optimize (adjust commission, provide better assets) | Monthly |

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## Fraud Detection

### Common Affiliate Fraud Types

| Fraud Type | Description | Detection Method |
|---|---|---|
| Cookie stuffing | Affiliate drops cookies without user knowledge to claim attribution | Monitor conversion paths — flag conversions with no click event |
| Click fraud / Click spam | Generating fake clicks to inflate metrics or steal attribution | Abnormal click-to-conversion ratios, geographic anomalies |
| Trademark bidding | Affiliates bid on your brand terms in paid search | Regular SEM monitoring, brand + affiliate keyword alerts |
| Incentivized traffic | Offering users cash/points to sign up through affiliate link | Low retention rates from affiliate cohort, high refund rates |
| Self-referral | Affiliate signs up using their own link | Cross-reference affiliate and customer data |
| Fake leads / form fills | Submitting bogus information to trigger CPA payouts | Lead quality scoring, email verification, phone verification |
| Return abuse | Purchase through affiliate link, then return after commission paid | Extend commission hold period past return window |

### Fraud Prevention Checklist

- [ ] Set commission hold period to 30-60 days (beyond refund window)
- [ ] Monitor click-to-conversion ratios by affiliate (flag outliers)
- [ ] Block trademark bidding in program terms, monitor with SEMrush or SpyFu
- [ ] Require minimum customer retention period before commission is finalized
- [ ] Review new affiliate applications manually (check website, traffic sources)
- [ ] Implement IP analysis for click and conversion matching
- [ ] Set maximum conversion rate threshold (flag if >20% without explanation)
- [ ] Audit top 10 affiliates quarterly (traffic sources, content, compliance)
- [ ] Use fraud detection tools built into your network/platform
- [ ] Reserve contractual right to claw back commissions for fraudulent activity

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## Content Guidelines & Brand Protection

### Affiliate Content Policy

| Allowed | Restricted | Prohibited |
|---|---|---|
| Honest product reviews | Income claims without disclosure | False or misleading claims |
| Feature comparisons | Direct competitor disparagement | Trademark misuse in domain names |
| Tutorial and how-to content | Pricing guarantees (price may change) | Spam (unsolicited email, comment spam) |
| Use of approved brand assets | Modified logos or brand imagery | Coupon codes not officially issued |
| FTC-compliant disclosure | Hidden affiliate relationships | Cookie stuffing or click fraud |
| Social media promotion | Implied endorsement by company | Trademark PPC bidding (if restricted) |

### Brand Protection Checklist

- [ ] Publish clear brand guidelines document for affiliates
- [ ] Provide approved creative assets (logos, banners, product images)
- [ ] Require FTC disclosure on all affiliate content ("This post contains affiliate links")
- [ ] Monitor affiliate content quarterly for compliance
- [ ] Set up Google Alerts for brand + affiliate-related queries
- [ ] Include content compliance requirements in program T&Cs
- [ ] Establish a violation escalation process (warning → commission hold → termination)
- [ ] Maintain a list of approved and prohibited promotional methods

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## Program Management

### Monthly Management Tasks

| Task | Frequency | Time Investment |
|---|---|---|
| Review affiliate applications | Weekly | 1-2 hours |
| Monitor top affiliate performance | Weekly | 1 hour |
| Process commission payouts | Monthly (net-30) | 1-2 hours |
| Audit for fraud and compliance | Monthly | 2-3 hours |
| Refresh creative assets and offers | Monthly | 2-4 hours |
| Affiliate newsletter / communication | Bi-weekly or monthly | 1-2 hours |
| Recruit new affiliates | Ongoing | 3-5 hours/week |
| Optimize commission structure | Quarterly | 2-3 hours |
| Performance review and reporting | Monthly | 2-3 hours |

### Key Program Metrics

| Metric | Formula | Good | Great |
|---|---|---|---|
| Active affiliate rate | Affiliates with 1+ conversion / Total affiliates | 10-20% | 20%+ |
| Revenue per affiliate | Total affiliate revenue / Active affiliates | Varies | Top 20% drive 80% of revenue |
| Affiliate CAC | Total affiliate costs / Affiliate-driven customers | <50% of paid CAC | <30% of paid CAC |
| Affiliate contribution | Affiliate revenue / Total revenue | 10-15% | 15-25% |
| Average commission rate | Total commissions / Total affiliate revenue | 15-25% | Optimized per tier |
| Time to first conversion | Median days from affiliate activation to first sale | <30 days | <14 days |
| Affiliate retention rate | Affiliates active this quarter / Active last quarter | 50-60% | 70%+ |

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## Affiliate vs Influencer Distinction

| Dimension | Affiliate | Influencer |
|---|---|---|
| **Compensation** | Performance-based (commission on sales/leads) | Flat fee, product gifting, or hybrid (fee + commission) |
| **Content style** | Review, comparison, tutorial, deal-focused | Lifestyle, narrative, brand integration |
| **Measurement** | Tracked conversions, revenue, ROI | Impressions, engagement, brand lift, tracked conversions |
| **Relationship** | Transactional, scalable, many affiliates | Relational, curated, fewer partnerships |
| **Control over content** | Low — affiliate creates independently | Moderate — briefs and approval process |
| **Timeline** | Ongoing, evergreen | Campaign-based, time-bound |
| **Discovery** | Affiliate networks, competitor analysis | Social platforms, influencer databases |
| **Best for** | Driving measurable conversions at scale | Building brand awareness and trust with specific audiences |
| **Risk** | Brand compliance, fraud | Off-brand content, audience mismatch |

### When to Use Each

| Scenario | Use Affiliate | Use Influencer | Use Both |
|---|---|---|---|
| Driving direct sales, clear ROI needed | Yes | | |
| Building brand awareness in new market | | Yes | |
| Product launch with sustained promotion | | | Yes |
| Scaling a proven acquisition channel | Yes | | |
| Reaching a specific niche audience | | Yes | |
| Long-term evergreen content strategy | Yes | | |
| Seasonal campaign with urgency | | Yes | |
| Mature program optimizing all channels | | | Yes |

### Hybrid Model

Many programs blend affiliate and influencer approaches:

```
Influencer receives: Flat content creation fee ($500-$5,000) + affiliate commission (15-25%)
Brand receives: High-quality branded content + trackable, ongoing revenue from that content
Result: Influencer is motivated to create AND promote; brand gets awareness AND conversions
```

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*A well-run affiliate program is a portfolio of performance partnerships. Recruit deliberately, compensate fairly, monitor consistently, and treat your best affiliates like the revenue-generating partners they are.*
