Despite being an exponentially growing business model that depicts a tremendous scope for future, affiliate marketing networks also face their own set of challenges. This fast-paced industry can be quite daunting and create mounting difficulties for new networks. Good news is that these can and should be handled if the network understands what these pitfalls are and work towards resolving them timely.
Here are a few challenges that most networks are facing today. If you want to build a robust Affiliate Network, it’s best to understand these.
The Technology tools that are complicated & expensive
One can’t run away from technology in any industry these days. As in any other industry, technology plays an important role in affiliate marketing business. It is important to invest in an effective tool to track and manage all your campaigns. It is practically impossible to build a big network without the help of a good affiliate marketing software. In fact, how many good affiliates choose to work with your network might depend on the tech tools you use. The tools will also be able to help you analyse and optimize your campaigns in real-time, resulting in improved revenue and bottom-line.
The Interactive Advertising Bureau (IAB) has estimated that the marketing industry in the US loses $8.2 billion a year to digital ad fraud. The Affiliate marketing industry hasn’t stayed untouched from such Ad frauds as well. Scammers apply various techniques that mislead Affiliate Networks into paying commissions for fraudulent conversions. These fraud tactics may range from repeated clicks on income-generating CPC links (cost-per-click) to using sophisticated software that simulate actual users. This can result in not only monetary loss for the network but may also ruin business relations with advertisers and other affiliates.
Low click-through rates
Click through rate, or CTR refers to the action when a visitor clicks on the advertising material and is transferred to merchant’s website. Click through rate is a metric, that helps with analyzing whether the campaign is effective and good. The average CTR rate is about 2.5% but the top 25% are converting at about 5.3% or higher and there are many who complain that their CTR is 1% or lesser. Ideally, you would want a high CTR but it is not very easy to achieve the same. A lot depends on the quality of the traffic, the relevance of the content as well as placement of ads.
Ad blocking or ad filtering refers to the practice of the software either removing or hiding ads. eMarketer estimates that more than a quarter of internet users in US are using software to block ads and this statistic seems to be growing every year. These ad blocking extensions can prove to be a big obstacle for affiliate marketers as they impact the ability to showcase the ads, track the sales and thus, generate the revenue. The affiliate networks can take advantage of Text links as they are picked up more being less intrusive.
Elusive and complex audience
The boom of online marketing has given marketer access to consumers like never before. Consumers are online all the time and it’s become relatively easy to reach them. The flip side to this, however, is that there is an explosion of content and ads that consumers are exposed to all the time. As a result, consumers are tuning out irrelevant content or content that they perceive as ads. Marketers need to come up with high quality and extremely interesting/relevant content to be able to push their product without seeming to do so.
These are the guidelines for the affiliate marketers to go through, in order to keep their strategies, tools, and technology in place, to be better equipped for the challenges associated with affiliate marketing. Though the benefits to reap are way many than these obstacles, it is for an effective Affiliate network to stay aware and updated!
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