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  1. #1
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    Affiliate Manager -- To Be Commissioned or Not to Be Commissioned?
    One of the companies I work with on affiliate campaigns and managing part of their network has been going through an internal debate for about year.

    Should newly hired affiliate managers be commissioned or not?

    There's cases for both sides.

    Merchants, Affiliate Managers, Affiliates, Networks -- what's your opinion?

    Should an employee who manages and recruits affiliate partners earn a revenue share from their channel?

    It's been brought up that this policy may vary whether the AM is employed directly by a merchant or by an agency / network.

    All opinions are welcome whether you're a Merchant, Network, Affiliate, or Affiliate Manager yourself.

    Looking forward to a healthy debate!

  2. #2
    The Seal of Aproval rematt's Avatar
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    I've always felt that in order for bonuses to be effective, they should be tied directly to the level of performance that you expect. So whether it's a direct commission on sales or a bonus tied to reaching specific performance levels, money motivates.

    -rematt
    "I know that you believe you understand what you think I said, but I'm not sure you realize that what you heard is not what I meant." - Richard Nixon

  3. #3
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    I'd recommend you do a search here at ABW, there are several threads, some with heated debate. In the end there is no clear cut answer.
    Deborah Carney
    TeamLoxly.com BookGoodies.com ABCsPlus.com

  4. #4
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    Are you an affiliate or a merchant or an OPM? Your past posts indicate you are an affiliate.
    Deborah Carney
    TeamLoxly.com BookGoodies.com ABCsPlus.com

  5. #5
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    Hi Loxly,

    I searched for "affiliate manager commission" but results were mostly sponsored program showing the "X% Commission" .

    If you have link to a related thread, feel free to share.

    best

  6. #6
    Moderator MichaelColey's Avatar
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    I'm a big fan of aligning interests, and commissions are a great way to align interests. Be careful to factor in some long-term goals as well, though, so that the affiliate manager doesn't make decisions that increase commissions in the short term but harm the company in the long term (like allowing parasites or trademark poachers, increasing commissions to unsustainable levels, etc.).
    Michael Coley
    Amazing-Bargains.com
     Affiliate Tips | Merchant Best Practices | Affiliate Friendly? | Couponing | CPA Networks? | ABW Tips | Activating Affiliates
    "Education is the most powerful weapon which you can use to change the world." Nelson Mandela

  7. #7
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    @Loxly

    I am a search affiliate, working on Adwords, Adsense, and some 2nd tier engines. No Yahoo or Bing yet.

    I worked as an Affiliate Manager outside of the US for a year and a half 4-5 years ago.

    Now I consult advertisers and agencies on their affiliate activities, which usually entails designing a program, commission structure, and the daily operations of an affiliate dept --(payment processes, creative development, service to affiliates, recruitment best practices, and integrating affiliate marketing with other company departments).

    You are an affiliate, yes?

  8. #8
    OPM and Moderator Chuck Hamrick's Avatar
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    Many of the OPM's here started their own agencies because they didn't receive a performance bonus. Name that come to mind are:

    Andy Rodriguez
    Jamie Birch
    Chuck Hamrick

    I was offered a performance bonus if I could show that there was an increase due to new affiliates I brought into programs. It was taking me 40 hrs a week to admin the existing programs. We kept adding more programs so that was soon 50-60 hrs a week. For existing programs where I had added 50% a year I would receive no performance bonus, that was considered due to the house. So I got no bonus and no raise for over two years but was told I was lucky to have a job.

    We started tracking the net revenue to the company and in January was told that our department was paying for salaries for other departments. Still no bonus so I start building my own business. Now I get paid for all sales generated. Some programs make a little and some make a lot. I made $1M in net revenue for someone else over the course of four years. Now I make it for my own agency and pay performance bonuses to my employees if their program makes money.

  9. #9
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    Quote Originally Posted by Performer View Post
    @Loxly

    I am a search affiliate, working on Adwords, Adsense, and some 2nd tier engines. No Yahoo or Bing yet.

    I worked as an Affiliate Manager outside of the US for a year and a half 4-5 years ago.

    Now I consult advertisers and agencies on their affiliate activities, which usually entails designing a program, commission structure, and the daily operations of an affiliate dept --(payment processes, creative development, service to affiliates, recruitment best practices, and integrating affiliate marketing with other company departments).

    You are an affiliate, yes?
    I am an OPM (Outsourced Program Manager). I manage programs for multiple companies, as noted in my signature.

    Base plus performance incentives is a good way to work. Different models work for different companies and different managers. Also compensation models need to be different for startups than for established companies that are already making sales through the affiliate channel.
    Deborah Carney
    TeamLoxly.com BookGoodies.com ABCsPlus.com

  10. #10
    Affiliate Manager Decorative Ceiling Tiles's Avatar
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    I am a merchant and brand new affiliate manager. If I would be only affiliate manager for a product or company of my choice I would not be offended by getting no base pay only a comission from sales of my affiliates.

    I think that would push me more to make sure that I do my best to get the job done. Ofcourse I would need a second job until I would make any profits.

    But that is how I become a merchant, after job working on sales.

    So, definetly a commission and no crazy base pay. It is Performance Marketing after all. Right?

  11. #11
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    Quote Originally Posted by Decorative Ceiling Tiles View Post
    I am a merchant and brand new affiliate manager. If I would be only affiliate manager for a product or company of my choice I would not be offended by getting no base pay only a comission from sales of my affiliates.

    I think that would push me more to make sure that I do my best to get the job done. Ofcourse I would need a second job until I would make any profits.

    But that is how I become a merchant, after job working on sales.

    So, definetly a commission and no crazy base pay. It is Performance Marketing after all. Right?
    That's fine for your own company, but not for someone hired to build someone else's company.

    I laugh when I hear that commission based compensation is a better motivator than base plus commission. If someone is only motivated by commission, what if they have a better offer from someone else? They are gone from you. Plus in many cases affiliates would make more money than the manager, which then tempts the manager to become an affiliate.

    I don't push harder for merchants that are commission only than I do for merchants that are base plus or that are flat rate.

    Like you said yourself, you have to get *another* job to support you to be able to do the first job. How motivating is that?
    Last edited by loxly; December 2nd, 2010 at 09:29 PM. Reason: typo

  12. #12
    Affiliate Manager Decorative Ceiling Tiles's Avatar
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    Yeah, you are right, for someone who is already doing the job and has more choices is not very appealing.

    I am just saying that base stays the same regardless of your performance and comission multiplies as you get results.

    But think about this, what if you pay high base price and you are getting no results?

    I can understand that someone with your experiance would not need to do that. But someone who might want to prove themselves might.

    What is the comission is high enough? BTW, what is typical commission if you get base pay?

  13. #13
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    Commission varies widely by vertical. Not all verticals have the same amount of money available. Another reason why sometimes a fixed cost is better.

  14. #14
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    I am definitely not on the fence in this case. I have seen it all in affiliate marketing when it comes to Sales Reps or Affiliae Managers, and the ones that seem to do the best, stay the longest and are loyal, are the ones with a Base and commission no doubt.

    First off, everyone has bills to pay, the mortgage company, credit card company don't care if you did not make sales this month , they want thir money. Therefore, you need some sense of security and having the opportunity to pay bills month in and month out, support your family, kids etc.

    As has been mentioned before, I have seen countless reps jump from one program to another with better incentives, higher commision rates, and better opportunities.

    And the worst I have seen is companies finding excuses not to pay commission to their reps, this is horrible and just flat out horrible business practice.

    I am most definitely for Base + Commission with CLEAR rules stated on how commission is earned. No gray area, just plain black and white.

  15. #15
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    OPM - I have clients that pay a flat fee and clients that pay flat fee's plus % of sales. I lean towards the flat fee for the newer programs, but prefer the combination of base plus % of sales for most programs.

  16. #16
    Affiliate Manager AffiliateWarrior's Avatar
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    Affiliate Management is effectively a sales/marketing management position and I think it makes total sense to have a performance element as a part of the compensation plan. Whether that is a straight commission on affiliate channel sales, or a commission on sales above baseline performance, or a bonus structure that takes into account revenue generated, affiliate satisfaction, etc.

    I think it makes sense to compensate at least partially on actual performance in a performance driven business. When I sold OPM services, we always had a performance incentive and now as an affiliate manager in-house, there is a performance component to my compensation.
    Wade Tonkin - Affiliate Manager - Fanatics
    NFLShop.com|Shop.NHL.com|NBAStore.com|Store.NASCAR.com
    Email wtonkin // at // Fanatics.com

  17. #17
    Outsourced Program Manager Sarah Bundy's Avatar
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    I'll second the base plus commission model. Like Loxly I'm not any less motivated to make my client's programs work if they pay a base. It's my job to perform for them. When there is a commission only there are so many more factors that an OPM or affiliate manager have to consider: What is your site converting at? What is your sales growth? What marketing budget will you be putting in to it to leverage this channel properly? What have you been able to produce in sales through your online channels to date?

    Often times the answers are not attractive enough for an OPM or affiliate manager to want to take them on, as they will be approach again by another company who will be willing and able to pay a base plus commission.

    If you want a proper job done on your affiliate program you'll need to have the resources, understanding of what it entails and time to build it up properly. You'll also need to work with your OPM or affiliate manager to ensure you are moving in the same direction and are a proper team, as buy in from both sides is just as important as budget and resources.

    That aside, base plus commission is the way to go, even if it's just a little base that ensures your affiliate manager or OPM can dedicate their time to your account over someone else's.
    Last edited by Sarah Bundy; December 28th, 2010 at 01:19 PM. Reason: typo

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