Best Ways to Make Commission Payments to
Affiliates and Influencers
Let’s say you’re an affiliate marketing manager for a merchant, and you’ve just created an incentive program with an attractive commission. It’s generating a lot of buzz among powerful influencers. Sounds great, right? Now comes the hard part: delivering on those promised payouts in a timely fashion.
Affiliate marketing has long been a popular digital marketing tactic. Advertisers, ad networks, retailers or agencies pay publishers (also called affiliates) to run ads or embed sponsored links. Compensation for these publishers (bloggers, marketers, industry content creators) depends on the commission structure:
- Revenue Share Model: The publisher gets a share of the revenue generating from sales stemming from the publisher’s site
- Fee For Action: The publisher receives payment after a visitor completes a specific action. These are among the common fee for action commission structures:
- Pay-per-click (PPC) or Cost-per-click (CPC): Compensation based on the number of clicks from a publisher’s site to the merchant’s website.
- Pay-per-acquisition (PPA): Payment rate based on a specific action, such as when a new visitor signs up for a merchant’s newsletter or makes a purchase through an affiliate link.
- Cost-per-lead (CPL): Publishers receive payment for the contact information of a genuinely interested prospect. The merchant or its sales team will reach out to the prospect.
- Pay-per-impression (PPI): Payment based on the number of times a website visitor views the ad.
But running a successful affiliate program is more than the compensation model or the payout terms. Publisher loyalty plays a huge role, a factor heavily influenced by regular commission payments. Consider the findings in Tipalti’s 2017 report on the payment experience of 150 publishers worldwide with affiliate networks:
- 69 percent of publishers have dropped or would drop a network because of a payment issue
- 95 percent of publishers expect to be paid on time to ensure loyalty
- 93 percent of publishers said communications such as email notifications on payment status updates are important. Likewise, 96 percent stated that being notified of payment issues is important, as is the ability to view payment status online.
It makes sense that payment reliability is top of mind. As more affiliate programs crowd the market, publishers are being more selective of the networks they join. The dependability of commission payments can make or break the reputation of your affiliate marketing program and affect the growth of your affiliate network.
The secret to growing your affiliate network doesn’t just rest on the compensation dollar amount—it’s also about effectively managing the publisher relationship across digital properties. Let’s look at how a mass payment platform can improve how affiliate managers handle onboarding diverse publishers, growing their global partner network, and smoothing out complex payment processes.
Onboarding diverse publishers
Affiliate marketing programs are continually evolving. It’s the nature of doing business on the internet: people consume a variety of content, from videos to blogs and more. Likewise, your influencer program should involve a diverse group of affiliates. A recent Shopify article describes the current affiliate marketer landscape:
General content, media sites, and networks: Media web publications get millions of visitors per month.
Comparison/review and niche topic sites: Examples of these sites include mommy blogs with product reviews on strollers of a lifestyle website comparing makeup brands.
Apps and solution type partners: Apps are using augmented virtual reality where users can virtually try out the products. A cosmetics merchant could partner with a beauty app affiliate to feature the products on the app platform.
Bloggers and influencers: These content creators promote products they’re passionate about via blogs, social media, or web video.
Courses, workshops, and live broadcast events: social media platforms have made it possible for content creators to host live broadcasts, such as streaming of playing a video game.
Paid advertising affiliates: examples include Paid Per Click (PPC) and contextual ads.
When running an affiliate marketing program, you need a mass payment platform that can effortlessly onboard a diverse group of publishers. Look for a mass payment platform that makes affiliate onboarding a streamlined process through a self-service portal. The organized workflow builds up your reputation as a professional affiliate program, making it an attractive choice for publishers looking to partner with brand influencer programs.
Maintaining a global reach
Here’s a story all too familiar to companies growing their operations on a worldwide scale: when GoDaddy, a web hosting and domain registration firm, began to onboard more global affiliates, the company encountered challenges with issuing cross-border payments.
“We started at zero payments internationally because we didn’t have the ability,” said Phil Newell, director of finance & accounting IT at GoDaddy. “For example, if someone in India made $50 commission, we sent them a check in USD, and then his bank charged $30 to deposit the money in Rupees, so there were big issues.”
Instead of increasing their accounts payable staff to process more outbound payments, GoDaddy sought to streamline the payment workflow using the Tipalti mass payment platform. The automation of manual tasks sped up the commission payments process without sacrificing customer service. Global partners still received payouts in their preferred method of payment and currency. The streamlined workflow unlocked the potential for global growth and strengthened the relationship with international partners.
As companies look to expand their affiliate program to include global partners, don’t let your accounts payable workflow dictate your global strategy. A mass payment platform should nimbly scale business processes with your global initiatives.
Streamlining complex payment processes
When it comes down to it, the traditional accounts payable process—issuing paper checks, printing out tax forms and other manual tasks—cannot keep up with affiliate marketing’s cross-functional workflow. Leveraging technology features like automation, self-service portals and data verification will help your business streamline the complex processes with issuing commission payments to a growing affiliate program.
Consider this: IRS requires businesses to validate the tax identification of all payees domestic and abroad, so tax compliance becomes a daunting task when sending payouts to global partners. A mass payment platform can automatically verify tax identification and identify country-specific tax requirements of a payee located abroad. A platform like Tipalti processes and verifies tax identification through global databases, ensuring that businesses are in compliance with tax regulations.
Here’s another aspect to keep in mind: Affiliate marketing software enables managers to track the performance of numerous affiliate marketing campaigns; however, managing ad performance on a platform that’s separate from your mass payment provider creates a cumbersome workflow. That’s why you need a global platform with integration capabilities. You’ll significantly reduce the workload of payment operations by tracking ad performance and issuing payments in a single platform.
Affiliate commission payments are more than the dollar amount. A successful affiliate marketing program uses streamlined businesses processes to build and maintain publisher relationships. A mass payment platform empowers managers to take on the challenging aspects affiliate programs—onboarding a diverse group of publishers, growing a global affiliate program, and complying with tax regulations—and empowers businesses to focus on building relationships with publishers and influencers.
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