For many e-commerce companies, affiliate programs are a major revenue driver and merchants anticipate they will be a key component of global expansion.
Though more advanced technology has made it easier than ever to operate a global business, there are still many potential pitfalls. The same is true of a global affiliate program.
Many merchants with strong affiliate programs in their native countries have stumbled moving abroad. It is possible to bring the power of your program with you to new markets, but here are five things you should consider first.
Consumer and Market Research
The first step to bringing your affiliate program international is the same first step you should take before bringing any element of your business to a new country: consumer and market research.
- Is there a need for your product or service in that market?
- Does your brand have any recognition in the region?
- Do local consumers purchase online? How savvy are they?
- Are there high-quality publishers and potential affiliate partners in the country?
These are important questions that will affect not just your affiliate program but your entire brand strategy.
If you don’t have a lot of brand awareness in the country, but there are a lot of high-quality publishers you could partner with, an affiliate program might be able to help you establish name recognition.
However, if people in the country wouldn’t be interested in your product, or don’t shop online, it might not do any good. Likewise if there aren’t any good potential affiliates, the venture might not be successful.
Also be sure to research customs and best practices in the region you’re expanding to. Each country has its own unique quirks that could make a difference to your program.
In Japan for example, affiliates and consumers respond better to banner ads instead of text links. Make sure you know your potential market well.
Understand Local Regulations
One of the biggest differences between doing business in your native country and a foreign one is the difference in laws and regulations.
Every facet of business is governed by a different set of laws and regulations in each country and affiliate marketing is no exception. Issues of taxation and disclosures are especially important for affiliate programs.
European programs coming to the United States, for example, may find they have to contend with a wide array of US and state laws regarding taxation and disclosures and a completely different regulatory environment from Europe.
Make sure someone on your team is familiar with all the laws you will be expected to comply with in the new country. If your in-house manager or the agency managing your program has never operated in your new country, considering hiring an additional experienced local consultant who can at least guide your program through the initial setup.
Also make sure to exercise caution when entering developing countries with your program. There tends to be more fraud and ‘slimy’ tactics in these regions due to less regulation. In both cases, an experienced local guide should be able to help you navigate the differences in the network landscape.
Explore Network and Tracking Options
With affiliate programs it’s important to identify which affiliate network or Software as a Service (SaaS) platform your program will use.
In the United States, for example, will you be able to use one of the major networks such as LinkShare, CJ Affiliate, or ShareASale? Is there a better local option? Or is there a SaaS platform that will be better for your program?
Be sure to explore every option before making a decision.
Is There a Larger Strategy?
You can’t expect your affiliate program to succeed if it’s the only form of marketing in your new region. It should compliment other digital programs and even traditional media. Make sure you have a larger marketing and brand strategy in place and that your affiliate program is integrated with it.
Used properly, your affiliate program can be a great way to generate general brand awareness. It can get your general brand messaging out in front of your affiliates’ audiences, and in this way almost functions as a PR channel. To take advantage of these opportunities, make sure your program is being actively managed and is aligned with your larger brand goals.
Set Realistic Expectations
Once you’ve made the decision to bring your affiliate program to a new country, be sure to set realistic expectations. You can’t expect results overnight. Don’t forget that programs tend to ramp up more slowly in new regions where brand awareness might be lacking. And a new program might need some fine tuning before it starts delivering results.
For a comprensive look about what to know, do and consider when expanding your affiliate program into a new country or region, download our Ultimate Guide to Taking Your Affiliate Program Global.