Live from Shop.org: Affiliating with Success

New York–On Jan. 13, the first day of the National Retail Federation-sponsored Shop.org conference here, three cataloger/retailers discussed the challenges of implementing successful affiliate marketing strategies.

The difference between now and several years ago in the history of affiliate marketing is a matter of respect gained, explained Prakash Bharwani, senior manager of interactive marketing at Westbury, NY-based floral and food gifts marketer 1-800-Flowers.com Bharwani said that back then, the task of supervising a company’s affiliate marketing plan wasn’t usually considered important enough to serve as a job in and of itself.

“It started off as an addition to normal responsibilities,” Bharwani said. “Now we have a team of people lined up to move the program in a strategic direction.”

David Rogers, affiliate marketing specialist for New York-based apparel cataloger/retailer Brooks Brothers, pointed out that this seemingly simple form of marketing is now in its third stage of evolution. During the first stage, i.merchants focused on establishing relationships with big-name partners such as Yahoo! or Excite. The goal was to make the expense of the affiliate partnerships pay for themselves, said Rogers.

Around three years ago, the focus shifted to choosing affiliates with a goal of driving as much traffic as possible to the site. In the stage we are currently in, Rogers said, affiliate partners are chosen even more selectively: “We don’t throw money at big names.”

The importance CEOs place on affiliate marketing is seen in the financial latitude it is usually given within companies. John Tighe, director of e-commerce support for Nashville, TN-based men’s footwear cataloger/retailer Johnston & Murphy, said it is a line item on the e-commerce budget but that senior management quickly excuses the department if its needs exceed the budget because that means sales are exceeding expectations.

“It’s now such a large percentage of online sales, that [top executives’] interest gets peaked,” Tighe said.

Rogers said there is a never-ending need to educate senior executives about affiliate marketing. “Education is important because programs are constantly changing. Some of the things we were doing last year, we are not doing now; some of the concerns we had last year, we don’t have now,” he explained. “The key to the future is flexibility and the ability to evolve.”

One of the areas of affiliate marketing that sometimes requires an open mind is the use of the company’s brand name by affiliates for the purpose of search engine optimization. On the one hand, a company wants to help the affiliate attract as many consumers as possible to its site, so that they will hopefully be induced to click on the affiliate manager’s featured link. On the other hand, there is a need not to confuse consumers or dilute the brand name.

Affiliates of Brooks Brothers are permitted to use the brand name for the purpose of driving traffic to their site as long as they obtain written permission from the company, Rogers said. But affiliates of 1-800-Flowers, said Bharwani, are not permitted to use the company’s trademarks or product-specific keywords, such as “flower cake,” to get visitors to their site.

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