Merchants contract with outsourced program management (OPM) companies to help them start, run, and improve their affiliate program. Essentially, OMPs oversee the day-to-day operations of a program and manage the relationships with networks and affiliates. Hiring an OPM to manage your affiliate program is an alternative to managing it in-house or turning over management to your affiliate network.
What an OPM Does
Many different factors go into managing an affiliate program including helping merchants select the network that will best accommodate their needs, recruiting, screening, approving, and managing the affiliates in the program, preventing fraud, creating and driving promotions, daily transaction checks, data feed, inquiries, PPC arrangements, newsletters, reporting, offers, program materials, and much more.
The Advantage of an OPM
Most companies don’t have the resources or experience to manage an affiliate program in-house. Plus they lack certain tools and resources at the disposal of agencies with lots of affiliate experience.
OPMs are also an objective advocate for the merchant’s best interests. Turning management over to a network might mean a less profitable program, given the conflicts of interest in the industry.
How to Choose an OPM
OPMs can differ in their experience, expertise, scope, capabilities, cost, resources, infrastructure, and a variety of other aspects. Here are some things to look for when evaluating an OPM to oversee your affiliate marketing program:
- Ratio of Account Managers to Programs – Ideally, this number should be no higher than 1:3 – with one manager for every three affiliate programs. Client accounts need to be staffed by a carefully assembled team to ensure that each program is being managed by knowledgeable, experienced professionals.
- Affiliate Industry Experience – Proper management of an affiliate program requires operational program experience as well as established relationships with networks and top affiliates. Be mindful of agencies that assign relatively junior staff to run their affiliate programs. The most successful affiliate programs are run by senior marketers with a strong track record of success. Insist on client references for other accounts the manager/team is managing, in addition to the OPM’s reference accounts.
- Publisher Development – To have a successful affiliate program in the long term, it is vital to consistently prospect, evaluate, and recruit new publishers. In fact, publisher development is the primary way for merchants to grow their affiliate revenue year over year. Therefore, it’s essential for an affiliate OPM to have at least one person on their team who is dedicated to publisher development, which includes prospecting for top affiliates, evaluating them to ensure they align with the merchant’s brand, and recruiting them into the program. If an OPM says they don’t need to recruit because they already work with top affiliates, that’s a red flag. Not only does the definition of a “quality affiliate” vary widely from brand to brand, but affiliates are also constantly changing their approach and shifting their focus, so it’s important to stay on top of their efforts. And while some high-quality affiliates may already be known, it’s more likely that they need to be discovered. And as they become producers, they need to be properly nurtured and managed.
- Fraud Management – It is absolutely vital that the OPM have a comprehensive fraud prevention and protection process in place. This requires having a dedicated team member who specializes in fraud prevention as well as fraud identification tools and resources. It also involves in-depth oversight of each and every affiliate’s activity to ensure they are not using PPC trademark bidding or disregarding CAN-Spam regulations, for example. The OPM needs to have clear-cut, established fraud management processes to protect the merchant’s brand integrity and ensure compliance.
- Knowledge of the State Tax Nexus – Retailers can face heavy penalties if they don’t follow the laws surrounding online marketing regulation in the United States. Therefore, it’s imperative that your OPM stays on top of which states have passed sales tax laws that may affect companies with affiliate marketing programs and proactively inform their clients of these laws.
- Network Relationships – In affiliate marketing, networks act as a trusted intermediary between a merchant and an affiliate. They host merchants’ creative (banners, links, etc.), handle all tracking and reporting, and automatically pay out commissions to affiliates based on the rules set by the merchant. In some cases, they also make a merchant’s affiliate program available to a large pool of affiliates who are members of that network. Your OPM should have good relationships with all the relevant networks and understand how their platforms work. It can also be beneficial to inquire about the type of cost savings that the OPM can get their clients in terms of network rates, placements and advertising, passes for network conferences, etc. It’s important to note that some affiliate networks offer program management. However, these networks are ultimately beholden to both the affiliate and the merchant so there is competing interests. So ask your OPM about the networks they work with to ensure that any potential partnership won’t misalign the financial incentives of a program.
- Event Attendance – Attending network and industry events is an important part of an OPM’s job. Inquire about what events they attend, what type of access they get, how often they attend, and how they leverage them for recruiting opportunities.
To get the most value from your OPM it’s paramount to clearly outline your goals, including spend, how you want to measure return, and what your objectives are for your affiliate program. Do your research, ask tough questions, and establish clear expectations about what you are looking for from your OPM partner.
Learn more about Acceleration Partners’ affiliate program management.