How to Integrate Affiliate Marketing within your Cross-Channel Strategy [with Rick Magennis]

On today’s episode, Rick Magennis is joining us from New Jersey, discussing affiliate marketing and educating audiences. Rick is the owner of Bearcat Media, an affiliate program management agency. They specialize in strategic affiliate recruitment, activation, compliance, communication, and program optimization.

Connect with Rick:

Bearcat Media: https://affiliateprogrammanagement.co/

LinkedIn: https://www.linkedin.com/in/rick-magennis/

The Rick Magennis Podcast Show: https://open.spotify.com/show/5akdi7DoE0sVQDR2Mfypfg 

Email: rick@barecatmedia.com

 

Connect with Andrei:

Marketiu: https://marketiu.com / https://marketiu.ro 

Linkedin https://www.linkedin.com/in/andreitiu/

Marketiu on Linkedin: https://www.linkedin.com/company/marketiu

Marketiu on Twitter: https://twitter.com/marketiuagency

Marketiu on Instagram: https://www.instagram.com/marketiuagency/

Email at hello@marketiu.ro

 

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Episode Transcript:

Andrei  

Hello, everybody! This is Andrei and you are on The Marketing Innovation Podcast Show. Our special guest for today is Rick Magennis, who is the owner of Bearcat Media, an affiliate programme marketing agency helping companies better use affiliate marketing as well as integrating affiliate marketing within their broader marketing mix. So straight out of New Jersey - Hi, Rick, how's everything going? 

 

Rick  

I'm doing well. Thank you, Andrei, for having me. I'm looking forward to talking with you about affiliate marketing and educating your audience. And hopefully they can get some good ideas from this and start an affiliate programme on their own or even become an affiliate and earn some extra money.

 

Andrei  

Super cool. So is the first time actually we talked about affiliate marketing in-depth on the show. So really exciting time for me as well, really looking forward to your knowledge and insight. So tell us a bit more about you, your background and what you've been involved with, the agency that you're on.

 

Rick  

Yeah, so I actually started in affiliate marketing over 10 years ago. I started as an affiliate. So I built a website to monetize it, just because I needed money, I had to be laid off from my job, and I had a newborn baby. So I needed money to support the family. So I built a website. And it was making money actually, pretty quickly. It was back when SEO where you can stuff keywords and do it that way. But then I got a taste of managing a programme just on the side for a little extra money and then that's where I fell in love with the programme management side. So I went on that site, I worked for a few agencies over the next five to six years. And then I decided that I wanted to go on my own and start my own agency, because I was pretty much tired of making money for everyone else. I wanted to start making my own money, grow my own brand and have my own agency to help businesses in the affiliate channel because the affiliate channels are not as popular or as sexy as the others and it sometimes gets a bad reputation. And my goal was to try and make it into a channel that is embraced, that every business should be using.

 

Andrei  

Mm-hmm. I see. Maybe people know more or less about this. So that everybody tuning in, has a good understanding from the beginning of what affiliate marketing is and what an affiliate network is and you know, everything that you just mentioned now, could you give us some examples of how things were going or what you were doing when you were an affiliate yourself with a website and then the type of programmes that you have run after?

 

Rick  

Yeah, sure. So when I started out as an affiliate, I created a website based on baby strollers. So as I said, I had a newborn baby. So I was pretty in tune with the baby products. So I created a website, just a simple one on WordPress. I wrote reviews of as many different baby strollers as I could, put them on there, I monetized them at that time through Amazon, that's when they actually paid decent money for affiliates. Yeah, I made a few thousand dollars a month doing that. And then, like I said, I transitioned into the management piece but with the affiliate piece of it when I was an affiliate, I got good at the SEO optimisation because you needed to get the proper keywords, you needed to learn how to update a website and even writing. As an affiliate, you gotta know not just how to add links into a website, you got to know how to properly do some SEO work, you got to know how to update a website, basic HTML. So there's a lot that goes into affiliate marketing that many people may not be aware of, or if they are aware of it, they're a little shy because they're not familiar with it. But I learned all this on my own, I was self-taught. So I didn't have anybody teaching me or taking any courses. So this is all something that you can go out there and just Google and find out how to do this stuff. And it's just trying to sift out the good information and the bad information. But affiliate marketing is a good way to supplement your income. I personally don't do it as a full-time income, I manage programmes, but I do have some affiliate deals with certain brands that I still have the money coming in. But it's good to know when it's good to have a background of it so that you can make some side income with it and whether it be a few hundred dollars a month or thousands of dollars a month, you can still make money doing it, as long as you partner with the right brands. And you know what you're doing in terms of running the website or the campaigns you're running. 

 

Andrei  

Just to bring up a bit like a clarity and to summarise, basically, in the beginning, you were part of an affiliate scheme, like the Amazon affiliate scheme, where you had your website where you were writing reviews for products, driving organic traffic to them, which eventually, were using your links in order to get to purchase from Amazon. And you're getting a commission from that.

 

Rick  

That's right. Yeah, I apologise. I skipped over an important piece. But yeah, so I had an Amazon account and I just went in there, found the baby strollers that I reviewed, just took the affiliate link, pasted it in there, and had three or four links within each review. They started ranking in Google and then when every time someone read the review, and clicked through one of those links to Amazon, and they made a purchase, I would get a percentage of that purchase. And the great thing about Amazon is that even if they purchase anything there, you get credit for. Whether it be the stroller, whether it be a computer, you still get credit for so as an affiliate, especially with Amazon, you get the benefit of not just your product you're promoting, but chances are if you're on Amazon, you're gonna buy something else. And then you get a credit for that, too. It's a great way to just monetize your website, if you have a blog, throw some links in there for some products that you're passionate about and instead, it can make you some nice passive income. As an affiliate, I was meeting people that were managing the programmes and I got interested in that and what they did on a daily basis. So basically, what I did, was I: cold-called this one affiliate Management Agency, and just asked her if she was looking for work for someone to help her with programmes and luckily for me, she was. She gave me a shot, I didn't have any experience doing it and she trained me. And then, from there, I worked for another couple agencies, doing the same work, managing programmes. So it would be the reverse of what I was doing. So I was working on behalf of the brand. So for the example of Amazon, let's say I was an affiliate manager for Amazon, I would be reaching out to these different websites that are creating content around products that were interested in monetizing it and then we would provide them any assistance they needed in links or creatives. We may negotiate higher commission payouts. So we were there as a support system for the affiliates that if they needed anything, they could come in and get help. But the biggest part of the affiliate management is recruiting in activating those affiliates. So you have a website, and you want people to come promote it. They're not going to just come to you. You got to go find them. And that's the majority of the effort that goes into these programmes is recruiting and activating. 

 

Andrei  

Mm-hmm. Got you. So you're with these agencies and then eventually you open your own. Tell us what you do now. Like what are the types of programmes you manage and the types of brands you work with? How do brands use you, in order to scale their efforts?

 

Rick  

Yeah, so I work in both the B2C and B2B space. I primarily work in the B2C space. I have a few clients in the B2B space because in all honesty, they're two different animals with affiliate marketing. The B2C is your traditional affiliate marketing. When you think of affiliate marketing, like I just talked about Amazon and the baby strollers, that's more B2C. Then you have the B2B with the products and you're trying to find other businesses to promote the product for you and to target other businesses for the product. So it's definitely two different niches. But what my agency does is we either do full management for them, or we can do like a la carte services, in terms of recruiting, we can do that solely for them. We can just message them. So there's different things but, a lot of clients just do the full, because they don't know enough about it to do it. So they just hire us to do everything. And that's primarily what we see in both B2C and B2B. But in terms of what I've been seeing as a difference between the two is just the payouts. The B2C tends to be more percentage-based where B2B tends to be more CPI dollar amount. So it's usually higher, just because the overhead is last and then the cost of goods is a lot less so they can afford to pay more. So that's the primary difference I see. But I see the B2B affiliate programmes are gaining steam in their understanding that it's important to be part of the complete marketing mix. And they don't call it affiliates that much, they call more partnerships. So I have a client and their name is Trumpy. They do text messaging, like alerts, text messaging, and things like that, and email alerts for businesses. So you can either do promos through text messaging, or alert your employees about updates for the company, that type of thing. So that's another type. So yeah, the landscape is growing affiliate marketing, for many years, has not been giving the respect it deserves. And I think now, finally, is getting to that point where the brands are seeing that it's such a valuable tool, and they need to start leveraging it and the cost of entry is a lot lower than most of the other channels, as well.

 

Andrei  

So let's try to take maybe case study or a classic scenario, just so that for everybody in here is everything clear. So basically, let's say we have somebody here tuning in, that has a consumer goods brand, or is doing marketing for a consumer goods company. They probably run, let's say, Facebook Ads and Google Ads, and they have some content marketing going on. How could affiliate marketing come into place? And how could they integrate a good affiliate marketing strategy within their mix of activities?

 

Rick  

Yeah, that's a great question. Because it's something that I deal with just about every day and brands I talked to, they're doing the standard Social Media Ads or Google Ads, and they may dabble a little bit influencer and influencer and affiliate kind of go together. And what I say all the time is that affiliate marketing isn't just one channel, it encompasses all the channels, so you can have an affiliate that promotes on social media, you can have an affiliate that promotes on Google, you can have an influencer, you can have an email marketing affiliate. So you can have all those channels, integrated into affiliates that do their own thing in those specific channels. And you can have them help you with those programmes, as well. So if you're doing an email marketing campaign, your affiliates can help you and it can actually get you in front of more people. And then you would get the emails from the affiliate, as well. So it can be a good business building to incorporate affiliate marketing into your overall marketing mix, but also allow the affiliates to know what's going on within each channel, so that they can assist. Not like overlap and take customers away, but they can actually help grow channels significantly, and it's just a matter of managing it properly and putting expectations out there. And treating the affiliates as a marketing partner versus just someone that you're paying a commission to.

 

Andrei  

I see. Oh, this is interesting. Regarding what you mentioned, for email marketing, for example, I know that information products is a big niche where they use a lot of affiliate marketing partners and brokers, joint venture brokers so that they can deploy the programmes and I know that is a whole game around that. But now you mentioned something interesting, which is rarely occurring and I think it should now, that you mentioned it in discussions at the board level of businesses. Basically, you have the marketing department, which does the marketing activities in general. But then would you say that is a good strategy when somebody like a brand would go and say: Okay, who does really well on organic traffic on Google, let's say, and has like a really good website where we could promote through some reviews or stuff like that. And then who has a really good YouTube channel, who is a well-suited influencer that could get us on TikTok or Instagram and go down like that, and maybe have a voucher code for that versus a commission for the Google partner and basically just build out a network like that on specific channels, depending on their objectives. Is that a good approach? Is that what should happen?

 

Rick  

Yeah, that's basically how we work and when we manage programmes. We go and find affiliates, or influencers or partners, however you want to look at it. So if we go out there, and we look for Oakley sunglasses reviews, and they're not monetizing it with the brand, we can reach out to them and say: Hey, you can monetize the link here. And we'll give you x for every time someone makes a purchase. And same thing for YouTube, we go to YouTube, we may not find the brands exactly that we're working with, but we find competitors brands. So we find someone that's promoting a competitor, we say: Hey, we work with this brand, we think you can do a good review about it on your YouTube channel. But this video will give you x percent and then they will do a video review without it and then it will be on YouTube and Google. And then, again, go back to the email list, we find the affiliates that have targeted lists for those specific niches and we can go and target them. And yeah, absolutely, that's a strategy that should be done. Even if you really don't have an official affiliate programme, at least get some kind of software in place to do some kind of tracking so that you can actually execute on these opportunities, because it's kind of leaving money on the table. Really, if you're not doing things like this, because your competitors probably are. 

 

Andrei  

Now that is mentioned about tracking, because this still to this day, can be an issue in terms of tracking the final purchase, mainly depending on the payment gateway. So what's your favourite method of tracking? How do you go about it so you can make sure that the brands you work with always have full visibility and everything is closed-loop?

 

Rick  

Yeah, yeah, absolutely. It's a good question. There are two approaches to this. Typically, I like to stay with a network, like a CJ because they do everything for you. They pay out the affiliates for you, they do all the tracking, all the reporting, all that type of stuff. And you are pretty much using them to do all that and it takes a lot off your plate. But there's other smaller programmes like Refersion, and Post affiliate Pro, where you pay a monthly subscription and you get access to the tracking and things like that, but you're required to pay out the affiliates. It just depends on your budget, because those networks I talked about are a little more expensive, versus the programmes like the Post affiliate pro and Reversion. They're typically a low monthly fee. But again, larger affiliates tend to go with the more established networks, because they know that it's secure, they'll get paid, and the tracking centre works. But in the last few years, these smaller platforms have been gaining steam and they're starting to become more popular just because they're not as expensive and they do provide pretty solid tracking in terms of the links.

 

Andrei  

And what's the minimum budget or what's a good budget to start out on this channel if you never did it before, because you mentioned it can depend.

 

Rick  

Yeah, it depends on if you do a network, every network is different but typically they're about $1000-1500 just to get integrated. Whereas the other ones, like the smaller ones, are a couple hundred bucks, maybe just to get started. But I would suggest you got to have a budget for creatives to get started. And if you want to start with any smaller influencers, you're going to have to have a few bucks there. So a couple thousand dollars can get you started at that's at the high end, and then the low end can be under $1,000 can get you started in affiliate marketing, and then from there, you just gotta keep investing in the affiliate programme, because what happens is a lot of brands, they do the initial investment, and then they don't see the ROI, and they just give up and shut it down and that's not helpful either.

 

Andrei  

And now you mentioned ROI, you're reading my thoughts. I want you to get your thoughts on how you measure. Because all these questions, I'm sure are going to be on people's minds right now. How do you measure the return on advertising or how do you amortise the initial cost, because you have the integration cost, which is let's say $1000, and then you need to invest in the programme or the platform, let's say, like X amount of money per month, so you can get the traffic and get those affiliates to work for you. Which you pay a commission, I guess. So what would be the commission, in general?

 

Rick  

The commission just depends on your margins. So the brands have a certain percentage that they have from the profit that they can get back in commission. So it all depends on the margins there. But obviously, you want to be as high as you can with that. So what I recommend is just doing a competitive analysis of the landscape of who's in there and what they're paying, and be as competitive with that as you can. Otherwise you're not going to gain traction. So if your competitors are paying 10% per sale, and you're paying six, chances are you're not going to get as much traction. So you want to be at least 10%, if not higher in that case. But if you can't, then it's something that you're going to have to maybe do something a little different, you're going to have to maybe incentivize affiliates in a different way. Maybe with bonuses down the road, or contests and things like that. So you got to get creative in ways you incentivize your affiliates if you can't really do it upfront. Because the bottom line is: most affiliates are motivated by money, but some are not. So you got to just find out what they're motivated by and then zone in on that and focus in on what you can do to make them more active and more engaged.

 

Andrei  

Mm-hmm. Okay, so let's say 10% is the commission that goes to the affiliate? What's usually like a good turnover? Or how effective can this be, let's say, if you are on one of these platforms, and you have a couple of affiliates that promote your products through different channels? First of all, would they come to you to offer themselves to you as a brand to promote your products because they know how much you pay or they know the brand, or you have to proactively reach out to everyone? This is the first question. And the second question is, how many sales can typically be generated through these sort of channels? The second question might not be so straight up, but we can discuss it, I think.

 

Rick  

So we'll go with your personal question first. Whether they reach out to you or you reach out to them. It's a combination of both but, good affiliate programmes, the ones that are doing really well, are very proactive in their outreach to new partners. They're always looking for new affiliates, new partnership opportunities, whether it be through Google, whether it be through competitors, links, always doing research and to competitors who're promoting them. So in an agency like mine, we typically spend 60 to 70% of our time recruiting affiliates and activating them. So that's a majority of the time. We do have an occasional affiliate that comes to us, but we're mostly doing outreach and that's what I like to preach is: always be reaching out, always be finding new potential partners because they're not going to just come knock down your door and want to work with you. It's something that you're gonna have to go find them. And it's not easy, really it's not. You're gonna have to figure out your niche. Finding the people you want to actually contact and then contacting is a totally different ballgame. They're not going to respond the first time, most of the time, you're gonna have to do consistent follow-ups to make sure that you're getting in front of them, that your message in your programme is at the forefront of their mind, because they're getting bombarded every day with affiliate offers, and you want to be sure that yours is the best. 

Rick  

Second question. I wanted to go into the second question. If you could just repeat it again, I want to make sure I understood it and completely.

 

Andrei  

Yeah, sure. So, um, how much can this channel generate in terms of the additional sales that can be generated? How easy is it to justify that monthly costs? Is there anything that brands should keep in mind? Like, for example, if you're just starting out as a brand, and have these costs, is it realistic to say that we're gonna sell 100 products per month or 500? 

 

Rick  

Also, I want to just make sure that we're clear, the cost there's no like, $1,000 a month, it's just: you integrate with the network and you pay the fee and that's it. You may have to pay the network, a percentage of each sale, but that's only on performance. So the network only gets paid when you get paid. And the same thing with affiliates. So if you want the affiliate to drive 100 sales a month, you have to give them the tools to do that. You got to give them maybe a product review. Give them some content ideas about what they can do with it. Give them your best practices, what's worked, what hasn't worked. So it's basically up to you how successful the programme is by giving your affiliates everything that they need to be successful. And if that's done properly, your affiliates can drive lots and lots of sales through this and it only cost a percentage of the actual sale, which is a lot less than social, where you have set budgets and you're throwing five, six grand a month that adds Google same thing, where this is controlled by the effort of the affiliate, but it's also on a performance basis. So they make as much as they want and you can have them make as much as they want just because it's pure performance, and you only pay out when there's a sale.

Andrei  

Mm-hmm. Got it. The sky's the limit, really.

Andrei  

Cool stuff. Okay, this was interesting. Would you have any other sort of advice that you consider important for people that, again, are just starting out on this channel, or want to make this chapter work better for them, if they have just tested it at some point in the past?

Rick  

Yeah, for the people that haven't started one, I would suggest they start one. It's so important, really. The amount of brand recognition and sales you can get through affiliates is absolutely incredible and the cost it's minimal compared to other channels. And for the brands that are doing it, and they may be struggling, there are definitely ways you can improve your programme at any cost, whether you talk to me about it, or you can talk to people that are running successful programmes out there. Focus on recruiting, focus on gathering a list of people that you want to be your affiliates or partners, and start contacting them and building a relationship with them, because that's what it's all about. And without that relationship is just kind of transactional, where they send a sale, you send them money. You want to build the relationship so that they will continue to promote your brand at a high level. And it comes down to that pretty much and if you're not showing them the time and the effort on your end, they're going to go somewhere else and find it.

Andrei  

Yeah, having them emotionally commit to the partnership as well, not just about the percentage and the money. Super cool. Okay. Um, so what we try to do in every episode is summarise what we discussed in a couple of very actionable things that somebody tuning in can take away and can implement right away. So if you can tell us, for example, as part of these free points, the first one, which are the main platforms for them to look at?

Rick  

The main platforms, to summarise that it's um, it depends on your budget. But if you have a budget to get started over $1,000, I would look at something like ShareASale, Awin, there's one called Avant link, those are all good platforms, and they have all the tracking in place, and they pay your affiliates for you. So you don't have to worry about that. And the other ones are the ones where you got to set up yourself and do the managing yourself on that: Post affiliate Pro, and Refersion. Those are some of the really good ones that I've worked within the past.

Andrei  

Legend. Thank you. And now over to you. What would be some really, really actionable things that you think people could take away so that they can best explore the channel, as well as understand it, and potentially implement it, whether it is for their internal teams are maybe coming to you, or a partner to help them implement the tactics on this channel?

Rick  

Yeah, with affiliate, like I said earlier, it gets kind of blended in with the other ones, but it's its own channel and it should always be treated as its own channel, even though it encompasses all the other channels, treat it as you would the others. It can be your most profitable channel and if you're not giving the daily support to it, it's going to just slowly, slowly just die. And that's the last thing you want to do, because you invest a lot of time and effort into it and your affiliates have as well. And the last thing you want to do is see it fail. So treat it as you would any other channel and start with recruiting inactivating affiliates. You may have to go through your current affiliate base and get rid of some of them that may not be quality, but it will be worth it in the end, when you have some real high-quality affiliates that you have great relationships with, that will be driving revenue, consistently, month after month after month. Whether it be through reviews, videos, email, social, however, they do it, got to just build those relationships and if you're going back to your board and you have to have a discussion about this, just let them know that affiliate marketing is probably your best option for incremental revenue, because you are reaching out to affiliates to do your marketing for you and they're going to bring you the new customers and the ones that are going to repeat over time and then it's just a cycle. They'll keep bringing in new customers, and you'll be turning them into repeat customers. That's the kind of way I look at it. Just getting them on board with the incrementality of the channel as well, letting them know that it's very profitable, and it'll be profitable for the foreseeable future, as long as you stick to recruiting high-quality affiliates. 

Andrei  

Thanks so much, man. And now, tell us a bit more about what you do now with the Bearcat Media, some of the fun things you are involved with. What people can come to you and ask your help with?

Rick  

Yeah, absolutely. So we do free consultations for 30 minutes. So, if anybody is having trouble with their current affiliate programme, or they're looking to start one, I'll sit down with them for 30 minutes, no charge just to get their juices flowing and get some ideas in their heads. But we also have a podcast on affiliate programme management. And it discusses a lot of what we talked about and a lot of the basics for starting an affiliate programme. It's called The Rick Magennis Show. It's on all the platforms: Apple Podcasts, Google Podcasts.

Andrei  

Everything is in the description, as well. 

 

Rick  

Yeah, that's perfect. Yeah, and trust me, I go over the basics. It's very simple, easy to understand, and the guests are from the industry and they share their experiences, as well. And in the future., this may not be relevant to a lot of your listeners, but we're in the process of building a recruiting software where we're gonna have affiliates and influencers in there and then brands will subscribe to our service and they will be able to contact quality affiliates and influencers from our platform. That's something we're working on as well, that's gonna be something probably in Q1 of 2021.

 

Andrei  

Nice. If I might ask, what's your network of affiliates at the moment, how big it is? What industries are they from?

 

Rick  

Oh, in my database I have probably over almost a half a million. That goes over a whole swath of industry. So it's from mommy bloggers, health and wellness, fitness outdoors. I can go on and on, like sports and CBD and anything you can think of I have affiliates.

 

Andrei  

Awesome. Okay.

 

Rick  

So, yeah, and then I'm looking to grow that half a million, I'm looking to grow that to over a million at some point next year.

 

Andrei  

Very cool. Actually, I have another note that you mentioned about this. What geographies are mainly your affiliates in? Is it the US and UK? International?

 

Rick  

My affiliates are worldwide actually. So I have a lot in America, I have a lot in Europe. I have some in Australia, down there and APAC, in southern Asia, too. So yeah, they're all over the place. That's what's good about affiliate marketing, it's global. You can be anywhere and promote a product.

 

Andrei  

Awesome, awesome. Awesome. Great stuff. Okay. A lot of ideas here. Man, I know you're busy. So I think our time is almost up. But this was a real pleasure to have you here and very insightful talk. Thanks a lot for the transparency and all the directions and insights, it was a lot of new information for me as well. I'm sure that for the people tuning in. the same. Where can they most easily reach you on or at? 

 

Rick  

My website is https://affiliateprogrammanagement.co. I got a good SEO domain there. Then I can be reached at rick@barecatmedia.com. That's my email address. 

 

Andrei  

Super. So we would have these in the description, as well. Meanwhile, guys, feel free to reach out to Rick, if you have ideas or maybe if you're interested in one of these consultations, discuss with him any opportunities that you might see for your brand. And Rick, thanks a lot for the availability for doing this as well for our guests.

 

Rick  

No problem, it's my pleasure! I love helping people out! 

 

Andrei  

Super. And yes, until next time, let's stay tuned. I think that there's a discussion to be continued here as well off podcast. Thanks a lot again for the insights and I guess it's noontime for you. So wishing you an awesome, awesome day ahead.

 

Rick  

Thank you, Andrei. Thank you very much for having me.

 

Andrei  

Thanks a lot for being on the show. See you next time.