Why shouldn't you just look at the commission rate in affiliation?

It may seem tempting to promote advertisers who offer the best commission rate. Yet, this is not the only factor to consider when optimizing your earnings as an affiliate. Here are some explanations to have a complete view of the key elements and make the best choices.

Why the commission rate is not everything

When you first start out as an affiliate, you may want to create campaigns for advertisers with attractive commission rates. Although this is not necessarily a mistake, it is important to think twice before signing up. The commission rate should not be the only decision-making criterion. There are many reasons why an advertiser may offer high commissions, such as:

• The advertiser is a new player in its market and is trying to establish a presence.

• The advertiser does not speak English and wants to test the market before continuing its efforts.

• The advertiser has no marketing skills and expects the affiliate to take care of it.

• The affiliate program involves digital goods that allow for this level of compensation (no manufacturing, storage or shipping costs).

All these reasons may justify generous compensation for affiliates. However, in other cases, what is the catch? It is not so much a trap to avoid, but rather details to know, which are found in the terms and  conditions of each program.

Program membership conditions

It is important to take the time to read the conditions of each program carefully, taking into account the following points:

• Geographical area: if you are targeting, for instance, a French-speaking audience, make sure the advertiser operates well in this area and that its site is available in French.

• Keyword purchase policy: most programs prohibit keyword purchases to avoid driving up SEM (Search Engine Marketing) campaign costs. This lack of instruction means you will have to compete against agencies that are experienced in keyword purchases. Be vigilant.

• Cookie lifespan: even if the commission rate is high, it is useless if the cookie has a short lifespan. Prefer programs with long-lived cookies, unless the advertiser has a very high conversion rate.

• Non-commissioned products: some advertisers decide not to compensate for all their products, considering that their flagship products do not need additional advertising.

• New customer: some programs only compensate for new customers, so existing customers are not taken into account. In some sectors such as telecommunications, where attrition (loss of customers) is significant, this factor is crucial.

• Cannibal product: some products, particularly security software, remove tracking cookies that they consider surveillance. At the time of purchase, the product may have removed the tracking cookie from the affiliate platform, causing the affiliate to lose its commission.

In conclusion, it is important to take into account the conditions of each program and to read them carefully, beyond just looking at the commission rate.

Other Key Performance Indicators to Monitor

As an affiliate, it's important to spend time analyzing the performance of the programs you participate in. While the commission percentages offered by different programs may be high, it's essential to check key indicators to select the most profitable programs and maximize your earnings.

On platforms, the various KPIs (Key Performance Indicators) provided for each advertiser will allow you to prioritize those that work best. To do this, here are some acronyms to monitor:

• EPC (Earning Per Click): This is the average revenue per click. When you divide an advertiser's commissions by the number of clicks you send them, you get an EPC. It's also called E-CPC (cost per click) when it's a calculated CPC. This indicator helps you identify advertisers with a lower conversion rate than others.

• CTR (Click Through Rate): Closely related to EPC, CTR or conversion rate indicates in percentage the number of people who were converted, that is, who performed the action for which you are paid after being redirected to the advertiser's site. For example, out of 100 people sent, if 5 bought a product, you have a conversion rate of 5%. The higher this rate, the better.

• Cancellation rate: As its name suggests, this rate represents the number of sales that were canceled before you could receive your commission. It sometimes happens that customers retract and the commission is canceled. If a cancellation rate is too high (beyond 5%), do not hesitate to contact the advertiser to find out more.

It's important to note that these indicators do not only reflect the performance of merchants. The traffic you send may be of varying quality and will not react the same way on each site. You should therefore give advertisers a chance before choosing those for which your audience responds best.

It's also important to take into account the seasonality in affiliation and not judge your KPIs too quickly. Before taking optimization measures,it is recommended to base the decision on medium-term results.