If you are new to affiliate marketing and digital marketing in general, you may be confused about all the jargon that you come across. Which is why we have made the following brief break-down the various commission models that can be applied and which may suit your campaign the best.
In the field of affiliate marketing, there are different types of commission structures, that as advertisers you can choose from to reward your publishers for getting their visitors to complete a specific task. Depending on your offering (products or services), business objectives, budget etc. a commission model will suit your company better than others.
The commission is also one of the determining factors for a publisher deciding whether or not they will want to promote a particular campaign, so it is important for advertisers to choose wisely. Publishers are looking for campaigns that fit their media, but also that they think will generate revenue for them. Having the appropriate commission structure will allow the campaign to be more attractive and help recruit more publishers that fit your campaign.
Performance marketing, is a marketing model in which advertisers pay their partners only when a particular action takes place or goal is reached. CPA (Cost per action), is a general term which encompasses all of the commission models detailed below.
If you have any doubts and would like to discuss which model would best suit your campaign, please do not hesitate to reach out to one of our account managers.
How to determine the amount of your publisher commission?
Once you have made a choice about which commission model you will be applying to your campaign you must then determine how much you will spend on your publishers. As mentioned above, the commission is a key aspect of making your campaign attractive and will therefore determine its performance. To set the amount of your commission the following factors are some key considerations:
- Competitors: Look into your competitors, whether they have affiliate programmes, or industry averages to determine what will be suitable for you. Feel free to discuss this with your account manager as well, they would be happy to advise you.
- Costs & margins: It is important to understand where your costs are and what your budget is before setting your commission. Look at your margins and ask yourself what is the most you can afford to pay out to your publishers without reducing your profits too much or adjusting your price.
- Average shopping cart & targets: If you do not have specific targets set, think about what you hope to achieve through your campaign during a specified time period – think numbers – but try to be realistic and conservative in your estimates. Once your targets are set they will allow you to calculate how many customers you will need to reach them, and help determine how your publishers can help you reach these targets.
How to get affiliates to be more active
Once you have determined the commission structure for your campaign and the amount that you would like to reward your publishers with, there are a few other methods you can employ to attempt to boost the performance of your campaign. Keep in mind that these may not be necessary and can be implemented at a later date once your campaign is live. If your campaign is already live, feel free to discuss these with your channel manager, simply fill out a ticket in Daisycon’s platform.
- CPA boost/increase If you would like your publishers to push your campaign to their audience, there is the possibility to provide them with a higher commission during a temporary period. This is called a CPA boost or a CPA increase, it will incentivize publishers to be more proactive with your campaign. If you have interesting sales on certain of your products during a certain period this is something that you could consider implementing.
- Tiered commission A tiered commission structure is a way of rewarding publishers that are performing well on your campaign. It works by allowing you to provide higher commissions to groups of publishers that generate the most sales, leads etc. For example, you can decide to set-up a tier 1 with a commission of 12% for publishers that drive more than 50 sales per month as opposed to 10% for those lower.