Getting Ready for Affiliate Marketing
September 19, 2020
Here’s a glimpse of what you’ll learn:
- How Greg Hoffman helps brands understand and plan for affiliate marketing programs
- The types of brands that are ideal for affiliate marketing
- How changes in Amazon’s affiliate program have affected Greg’s business and his clients
- The process of rethinking and updating consumer-facing content to attract new audiences
- Greg talks about the two sides of the affiliate marketing industry and how they have evolved over the years
- The moment Greg realized he was good helping brands build their businesses
- Affiliate software that brands should pay attention to
In this episode…
When working with new brands looking to get into affiliate marketing, Greg Hoffman starts by talking to them about expectations. Based on what he has seen over the years, he wants brands to understand that affiliate marketing is not a silver bullet. While it does bring in new customers, it may take time to substantially increase sales.
Because of this, Greg has a few tried and true strategies to quickly and successfully get a brand’s affiliate marketing program off the ground. First, brands need to know who their target audience is and what products are ideal for them. They also need to get their overall website, sales, and conversion rates affiliate ready. So, are you prepared to launch a profitable affiliate marketing program?
Greg Hoffman, the Founder and CEO of Apogee Agency, joins James Thomson in this week’s episode of Buy Box Experts to talk about how he helps brands launch their affiliate marketing programs. Greg discusses the evolution of the affiliate marketing industry, the recent changes to Amazon’s affiliate program, and the types of brands that are best suited for affiliate marketing. Stay tuned.
Resources Mentioned in this episode
- Buy Box Experts
- Apogee Agency
- Greg Hoffman on LinkedIn
- Joe Hansen on LinkedIn
- The Amazon Associates Program
- Affiliate Summit
- Disruptive Media
Sponsor for this episode…
Buy Box Experts applies decades of e-commerce experience to successfully manage their clients’ marketplace accounts. The Buy Box account managers specialize in combining an understanding of their clients’ business fundamentals and their in-depth expertise in the Amazon Marketplace.
The team works with marketplace technicians using a system of processes, proprietary software, and extensive channel experience to ensure your Amazon presence captures the opportunity in the marketplace–not only producing greater revenue and profits but also reducing or eliminating your business’ workload.
Buy Box Experts prides itself on being one of the few agencies with an SMB (small to medium-sized business) division and an Enterprise division. Buy Box does not commingle clients among divisions as each has unique needs and requirements for proper account management.
Learn more about Buy Box Experts at BuyBoxExperts.com.
Welcome to the Buy Box Experts podcast we bring to light the unique opportunities brands face in today’s e commerce world.
James Thomson 0:18
I am James Thomson, one of the hosts of the Buy Box Experts podcast. I’m a partner with Buy Box Experts and the former business head of the selling on Amazon team at Amazon, as well as the first account manager for the Fulfillment by Amazon program. I’m also co-author of the Controlling Your Brand in the Age of Amazon book and co founder of Prosper Show, one of today’s largest continuing education conferences for Amazon sellers. Today’s episode is brought to you by Buy Box Experts. Buy Box Experts takes ambitious brands and makes them unbeatable. When you hire Buy Box Experts, you receive the strategy optimization and marketing performance to succeed on Amazon. Go to buyboxexperts.com to learn more.
Before I introduce our guest today, I’d like to call a big shout out to the firm at Disruptive Media for its work in Amazon advertising, focusing and driving traffic, converting traffic and enterprise analytics. Disruptive helps their clients increase their bottom line month after month. Go to disruptiveadvertising.com to learn more.
Today, we are joined by Greg Hoffman, CEO of Apogee Agency, an affiliate marketing agency. Previously, Greg served as leader of various agencies specializing in marketing and public relations. In 2014, the affiliate marketing industry awarded Greg’s Apogee agency with the agency of the Year Award, here to share his ideas on how brands can build broader audiences through affiliate marketing. We welcome Greg. Thanks for joining us today. Greg.
Greg Hoffman 1:53
Thank you very much.
So you don’t my business partner Joe Hanson. Tell me more how you both came to know each other.
Greg Hoffman 1:54
So Joe was my first good case study. In November 2009. He and his wife and some friends had started a company called Flirty Aprons. And they immediately launched an affiliate program and they needed some help. So he contacted me. And in the first conversation, he says, We, we’ve got these aprons, and it’s going to be a huge hit. And we need some help. And I said, You’re absolutely crazy. No one’s gonna buy aprons. It’s 1009. Yep. No one buys aprons. What’s Why? Why do you think this is going to work? And I was quickly quieted, because the bloggers that we brought into the program, loved the aprons, loved the styles, and we sold thousands of units just in the first couple months. So I managed that program for nine years, and Joe was the original owner and survived several different owners. But I know Joe doesn’t like the word aprons because he sold and lived with aprons for many years.
Joe, can handle it, he can handle the use of the word apron. That’s great. Well, I’m really glad that you’re with us here today. I want to start by asking a fairly broad question about brands. When we think about brands, that’s the client base we work with, it’s the client base that you work with. brands don’t always understand what audiences might be interested in their products and their messages. When you’re talking to brand prospects. How do you help them think about the need for affiliate marketing and where to begin the journey of identifying customer niches and websites that might be interested in affiliate marketing their products, a couple different thoughts there.
So first of all, I’m always talking about expectations. I want to make sure that the brands understand my history and affiliate marketing and what we’ve seen with all of our different launches And takeovers, and in the way I see it is, if we’re going to launch a new program in 2020, then at the six month mark, sales are only going to be in the five to 15% of your overall online sales. So affiliate marketing isn’t a silver bullet. It is a channel that definitely brings you new customers. But a launch is definitely going to take time. It takes six to 18 months to get an affiliate program up and running. But a good mature program that’s two or three years old, could be adding 25 to 30% of your business overall. So you’re a new brand, you’re getting launched, you don’t really understand who’s ultimately going to end up buying your products. How do you start the process with brands to think about, okay, there’s a world of websites out there, there’s a world of influencers, there’s a world of organizations and channels that we can be going To tell our story, how do you help figure out where to start? And how to build from that so that you have a comprehensive affiliate marketing program? Well, I tell them to wait, first of all, I want to make sure that all the other channels are working first. So if they’re going to be on marketplaces, they have to have proven conversion. Okay, they have to know that paid ads work, paid social works, their email works, they’re building a community. And that, you know, they have to get to a certain level of overall online sales to make sure that affiliates are going to be interested in joining the program. Because right now affiliates are busy promoting companies that have been around for five to 10 years. And they’re, we as an affiliate Management Agency, we have to interrupt their day, and tell affiliates about this brand new company, and we have to prove to them that they’re going to make money. And that doesn’t always work because these affiliates are busy. They’re all Doing something else. So a new brand is a little bit hard to launch. Do you like to see brands established online and offline? Or do you work with brands that might be just digitally native brands? How do different influencers think about the breadth of coverage that brands might have? Well, the probably the best example is going to be an online retailer that only sells on their website, that is going to be the absolute best outcome. They’re not on marketplaces, they’re not on retail shelves. The only place they can buy their specific product is online. And there’s got to be huge demand and a huge audience. That’s when affiliate marketing is magical for the brand.
James Thomson 6:54
So what makes it magical when you only have an online presence? I think of brands that are available in broad, broadly based retail settings, where there might be a lot more consumer awareness that that’s very different than the situation like you’re describing where the brand only exists online. How does that make your job easier when it’s only an online brand?
It’s about conversion on the online experience. So I can go to a box store down the street and buy a product. If it’s going to be more convenient to buy online, if I can only buy it online, then the conversion is going to be higher, and affiliates, okay. affiliates only care. In my instance. They only care about conversion. The Commission is a good part of it. But it’s at that intersection of conversion and commission, how much are they going to actually make? And then what is the potential long term so conversion matters over everything else?
So let’s talk about conversion. I don’t want to bring Amazon into the discussion. Amazon last year, or I’m sorry, earlier this year turned down the affiliate commissions that they were paying themselves and I’m assuming that that’s changed the way you think about the overall affiliate marketing program. At the same time, Amazon has also worked on finding ways to get very much more into the retargeting business which may serve as a substitute in some ways to certain types of affiliate marketing spend. How do you look at where Amazon is today and how that impacts you positively and negatively?
Well, Amazon does have the biggest affiliate program in the world. And they’ve taught lots of bloggers how to earn their first checks. Yes. And so it’s good affiliate marketing one on one, but then the smart affiliates are going to look at, you know, it can if I work with this brand directly, I’m going to make it More, the conversion might be a little bit higher on Amazon. But Amazon’s only paying 3%. Now. So as for us, specifically, over the last few months, we’ve inherited lots of refugees from Amazon, hundreds of them, and some of them were coming to us saying, I’m sending Amazon 2000 clicks a day, and I was making X amount of money. Yes. How can you help me? And I would, and then that’s when my team comes in and says, well, you don’t have to make 3% anymore, we’re going to start paying you 15%. But the conversion is going to be just a little bit less, because Amazon always converted. Well, just what you didn’t always understand what the average order was going to be. But with us, I’ll tell you what my average order is for this particular brand. And I’m going to tell you what I’m going to pay you.
So what have you had to retrain these bloggers and then these affiliates, what have you had to retrain them on as you’ve taken them from the expectations of getting our being in business with Amazon And now having to deal with organizations they might not otherwise have dealt with in the past.
There is a learning curve to learning a different platform. You know, they’re coming to us , they’re starting to share and sell more, they’re starting to impact more cJ pepperjam. They’re learning. Maybe they dabbled with the networks on the tracking platforms before but they were used to just creating an Amazon link and putting it on their site. Now they’ve got to learn how to promote specific brands, specific products, and they’ve got to work with multiple managers as opposed to just one interface. So it’s a little bit of a learning curve for them to understand all the nuances of these networks. And now they’ve got to work with 19 different companies, individually as opposed to one right all right. So as we think of what an or what a brand needs to do, to be ready to start in Entering into the affiliate marketing space. Part of the mechanics of making this work is that brands have to have their keywords properly optimized, they have to have a message that’s going to resonate.
When we think about keyword optimization on Amazon, there are several steps and there’s a recipe that brands need to take. Help me understand these affiliates that are now starting to work with you. They’re traditionally working through Amazon, how do they need to rethink the content that they’re actually preparing to be putting on other people’s websites?
Greg Hoffman 11:33
Good question. So we do want them to do as much research as possible on the exact products and the keywords and they’ve got to test they’ve got to figure out what categories are going to work best for them. And sometimes a brand isn’t going to convert for them. Every single website is going to convert differently because everybody’s got different landing pages and different funnels. So they could send us traffic and it’s not going to convert. Well, they could go to our competitor that has a different funnel or a different style. And it’s going to work better for them. So we’re just trying to teach them as much as we can about our style of affiliate marketing, how to use the platform. And we’re there to be resources for activation and education. Most of the affiliates that are coming from Amazon are smart affiliates. They’ve been around for a long time. So they don’t need lots of hand holding. So it’s just a little bit more of the reactive education as opposed to proactive education. Okay. So the process of actually making your products relevant for consumers and for the different audiences you’re going after requires you to understand who your audiences are and what resonates with them for Brian ads that are getting into the affiliate marketing space? How do you help them define different pockets of audience and different types of messages for those different pockets? I’m curious if I knew anything about affiliate marketing, and I wanted to get into the space? Am I looking through large directories of different websites and saying, Oh, I think my audience would resonate with that group and that group? How does that work? How mechanical is it? How manual is it? How automated is it? How can you refine and become better at matching what you think your brand will offer in terms of features and benefits with the potential audiences that these different landing sites might have? Well, we build very balanced programs. So I look at there there’s all these different models of affiliates, so I’m always looking at, we do work with some coupon affiliates. We do work with some loyalty and cashback we have a paid search affiliate, we like we have a shopping cart abandonment affiliate we like but then we also go out And we find those niche affiliates that either have comparison websites or their regular websites, they’re talking about parenting, or cooking. So there’s all these different models. And we tackle all of them at the same time we bring in the corporate type of affiliates. And then each month we look at a different keyword set of a different niche of type of affiliates. We’re going to go after, okay. And we have our own machines, basically for recruitment. And so we look, we send out hundreds of invitations, and we hope that we get some of them to come back and join the program.
Talk to me a little bit about the process of updating content on Amazon for brands that are now for the first time selling directly to consumers, they’ll go through this process of building a listing, getting the digital assets to get that listing fully optimized. They may hire an agency like ours to actually run through the mechanics. But this process of building consumer facing content for a lot of brands is still fairly new. If historically, all they’ve ever done is do b2b wholesaling. How do you help brands to staff appropriately and develop the mindset that not only they build content, but they’re gonna have to continue to refresh it, continue to look at new ways of saying potentially the same thing, but ways that will attract new groups of customers over time.
Greg Hoffman 15:31
Let’s go back to our old friend Joe. Please. We can talk about flirty aprons. So back in 2009 2010, he had one style he had, I think, five different types of aprons. And we sold them and then by summertime, the sales had slowed down. And so Joe and I started thinking, well, we need more styles. So they came up with more styles, okay, and each season, we were starting to think about the new products and the new content that we could put out because the bloggers were definitely getting tired of the same type of sales. So I learned a lot with Joe on flirty aprons, just by understanding the seasonality to the products and the type of contents and you’ve always got to evolve. You can’t just sell the same type of products, you’ve got to, you’ve got to constantly engage the affiliates, you’ve got to engage the customers to expect something new. And, you know, sometimes it’s going to work sometimes it’s not going to work, but you’ve got to try something different, especially when it comes to seasonality. Because you’re now focusing on this intermediate affiliate marketing audience, for brands that are used to putting their products out there and the seasonality will dictate for them whether they sell a little or a lot at a given time. All of a sudden there’s accountability. To this audience that in Joe’s situation, pushed him to have to expand his product selection, to start to dress seasonality issues that may not have been something that he was prepared to deal with initially.
Take me through other situations where you’ve worked with brands that are so historically b2b, that now as they move into a b2c space, and dealing with affiliate marketing, that they’re having to really rethink the whole process of what it means to communicate directly with consumers.
Well, I think one of them I met a client three years ago at your show, serenity health and home decor has an affiliate program that I met them at your show, I found out that they had a program on shareasale. And I don’t think any of us were prepared for everyone to be home for the last three months. Yes, and start focusing on sprucing up their backyard. So that was a quiet little program. For the last few years, and they’re they, they’re b2b, but they’re they have a retail site. And so it was a quiet little affiliate program until all of a sudden, everybody wants to start buying outdoor furniture and outdoor gardening equipment. And so that program has increased tenfold over the last few months. So I think they’re now scrambling a little bit trying to figure out, wow, everyone just, we had everything in place. We’ve got a retail store, we’ve got Amazon products, and we had an affiliate program. And now there’s this crush of people because we had everything out there at the right place at the right time. Yes. And now we’ve got a service. So I know that they’re definitely trying to keep up with, you know, the customer service and shipping and sending everything out. You know, it worked, but they’re there right now. No, we’re all scratching our heads like we were not expecting this, we did not see that, you know, sales were going to increase by 10. By 678 hundred percent yes over a two month period.
Take me through. I mean, you’ve been in affiliate marketing for a long time. Once upon a time, affiliate marketing was the industry. There were a lot of bad players who made a bad name for the whole industry. data has tightened up, policing has tightened up. And so companies are more comfortable using affiliate marketing, to take me through where things are today. And for brands that have not historically used affiliate marketing to help to address some of that historical nonsense that, unfortunately, has hurt certain people’s perceptions. Where is the industry at this point?
Greg Hoffman 19:53
There’s two sides to the industry. There’s the cost per sale, which is my side. I work with brands, traditional online brands that sell physical products, and then there’s the cost per action side, where those are the people that are spending money to make money. And they’re buying leads, they’re selling leads, they’re buying mortgage leads. Insurance leads, they’re, you know, they’re when you go to an Affiliate Summit now 95% of the people are either vendors or they’re there because they’re hustlers. And they’re, they’re there to try to make that quick buck. But then there’s that old school group that I kind of got into about 1015 years ago that, you know, we’re we’re we’re a smaller, older group that really wants to focus on the quality and we’re we’re trying to advocate for the industry. We’re not just trying to make money to buy a Ferrari Tomorrow, right? We are trying to help brands and we’re trying to help them grow and in helping everybody understand the expectations and realistic growth. So there’s two sides of the industry. If you’ve been to an Affiliate Summit, you’ve been through the meat market, you’ve been through the exhibitor halls. And that’s that’s not necessarily the affiliate marketing that I represent. Yes, no, you know, there there there is that historical those those type of affiliate marketers that had lots of fraud, because they’re in there just to make a quick buck, but right now there are there are so many big corporate affiliates, and there are so many bloggers that are trying to supplement their income and understand affiliate marketing. You know, that’s the side that I represent. And in my programs, we don’t see a lot of fraud. I haven’t seen fraud In our programs more than once or twice over the last 10 years, but it does exist out there and it exists on the side where you’re buying leads and, and you’ve, you’ve got lots of lots of money and you want to grow immediately. Yes, you’re going to start working with people that like to take shortcuts. Yep, yep.
Yeah, we know, you know that we have the same problem in the Amazon space with people taking shortcuts and inevitably leads to bad bad situations for everybody. So I’m glad we’re having a conversation with you, Greg, and not one of these hustlers. So I want to change gears here a little bit and you’ve been in the business of helping brands for a long time. Take me through a turning point for you professionally, where you realize that you were good working with brands, you were good at helping them understand where there was an opportunity to help them build their businesses. What points in your career did you say? Yep, I think this is definitely what I want to do when I grow up.
Man, I could have planted that question because I do have a perfect answer. Okay. Okay. So it was 2005 I was working for Thompson Cigar. I was the internet marketing manager, I had daily battles with the catalog side of the business because they didn’t understand this new internet side. And in one of the channels that I was given responsibility for was affiliate, I was also in charge of SEO and all of the advertising and paid ads and things like that. And, and that was hard. I was learning how to be an internet marketing manager. But then I looked at the affiliate channel, and I talked to an affiliate, I sent an email, and I scheduled a phone call. And I talked to this one affiliate, and I said, I’d really like you to get us to promote our brand on your website. And she said her name was Connie and she said, great, give me a coupon and I’ll do it and I gave her a coupon. And the next day she had sales. And I thought, Wait a minute, all I have to do is talk to someone. All I have to do is build a relationship. Yes. And I and I immediately said, I like affiliate marketing better than SEO. I like it better than paid ads, because I can talk to people. And, and that’s when it all started. That’s when I fell in love with affiliate marketing because I realized that I could, I could move the needle just by building relationships.
Have you had mentors along the way who have helped you to become more comfortable with that first call when you’re talking to a prospective partner, and being able to make the pitch but also sell who you are and what you represent?
Greg Hoffman 24:51
I have been getting into Affiliate Summit, my first Affiliate Summit was in around 2006 and it was in Orlando. And it was still a quiet little conference at that point. Meeting the owners Shawn Collins and Missy Ward probably started me in the right direction. I did as much research into the affiliate world as possible. I found affiliate forums. And there was a forum called the best web that doesn’t exist anymore. But I found a lot of mentors. I found an old school mentality of always fighting for the little guy. And, you know, I, it was the forum that taught me the advocacy that I have today. I’m still trying to get away from it a little bit because the old school mentality doesn’t help you grow your business that much. But there’s lots of mentors that came from the best web and one of them is one of our consultants. Her name is Carolyn Canet. So Carolyn is a legend in the industry. She’s won the legendary award at Affiliate Summit. And she is one of those people that taught me how to be an affiliate manager. But there’s, there’s a long list of others that are in the affiliate management space that I’ve been connected with. And we’ve been in mastermind groups together, and we’ve shared best practices. So it’s great to have your community of colleagues and peers, even if they’re direct competitors. Yes, I still look at them as mentors, and I still listen to them and ask them for advice all the time.
That’s great. Let me ask you this. In the industry you’re in are there software tools or there consultancies that you see today as up and coming that we should be paying more attention to?
There are, so one of them is, I’m going to say wrong. It’s called Affluent, affluent is, is basically a dashboard for either managers. Or affiliates, but for the affiliates out there they can, if they want to understand their analytics, and they want to look at all of their stats from different dashboards from different networks and different tracking platforms, affluent puts everything together in one dashboard for them. So I think that one thing that affiliates should be looking at is how to track your sales across all different programs on all these different networks and tracking platforms. Affluent has a dashboard for affiliates.
That’s very helpful. Thanks for sharing that with us. Greg. I want to wrap up our conversation today and ask you a very broad question. If we didn’t have affiliate marketing as an option for brands reaching out and finding ways to find new pockets of customers, what would what brands be doing instead? What are the meaningful alternatives to affiliate marketing that helped them to do some of the things The types of things that affiliate marketing today allow them to do.
I think there would be more emphasis on advertising on comparison websites.
James Thomson 28:10
Those still exist. I mean to comparison shopping,
Greg Hoffman 28:13
they do. And you know, even 15 years ago, there were those sites where you would just pay to have your data feed placed on their sites. And that was a big thing back then. But now it’s much more of an individual. They’re there. They’re owned by individuals, they’re not big corporations. So I think data feed management and data feed platforms would still be a big thing if affiliate marketing didn’t exist.
I think it’s exciting to be able to go and find small groups of highly relevant customers through the industry or in you know, certainly, Facebook marketing, created an awareness among brands that there was opportunity to do very Careful targeting. But affiliate marketing has been around for years and years. And you’ve been doing this and perfecting this for so long that it seems like a natural thing for any brand that’s wanting to reach out and talk to consumers and actually become more relevant in how they communicate the message. That all sounds very, very exciting. Greg, I want to thank you today for joining us. For those of you interested in learning more about Greg and Apogee Agency, please visit apogeeagency.com Thank you very much. Thanks for listening today. One final thought before we finish, I want to share with you thoughts on a company we work with closely called Kenshoo. For brands to be successful on Amazon one critical level will be launching and managing Amazon advertising campaigns. We at Buy Box Experts are really big fans of the team at Kenshoo. The sophisticated software helps brands to manage ad campaigns and gather data intelligence across Amazon, Google and Facebook platforms. To learn more, go to Kenshoo.com. Look forward to seeing you next time on the Buy Box Experts podcast. Thank you.
Thanks for listening to the Buy Box Experts podcast, be sure to click subscribe, check us out on the web and we’ll see you next time.