On this episode of the Thrifty Titans Podcast, we dive into the world of affiliate marketing with Parul Tarang Bhargava, Co-Founder & CEO of vCommission.
We get valuable insights into different pricing models, including rep sharing and pay per acquisition for affiliate marketing. Parul also emphasizes the importance of retaining customers and understanding consumer behavior when starting affiliate marketing. We also cover topics like integrating the product being sold subtly into the content and the importance of being honest with the audience. Tune in to hear the dos and don'ts of affiliate marketing and how experimentation can lead to successful affiliate campaigns.
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00:00:32
Saikat Pyne: On this week's episode, I have Parul Bhargava With me.
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Saikat Pyne: Parul is the Co-founder and CEO of vCommission, which is
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Saikat Pyne: one of India's leading affiliate network, and it delivers performance
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Saikat Pyne: on Web and mobile to advertisers around the world through
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Saikat Pyne: its growing network of publishers.
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Saikat Pyne: Parul has been an entrepreneur for over a decade now
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Saikat Pyne: and is one of the country's foremost experts when it
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Saikat Pyne: comes to affiliate marketing, managing affiliate campaigns and digital media.
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Saikat Pyne: Welcome to the show Parul.
00:01:09
Parul Bhargava: Thank you, and hello to all your viewers and listeners!
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Saikat Pyne: Parul, let's really dig into this. When is the right
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Saikat Pyne: time for a first time founder to start considering affiliate
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Saikat Pyne: marketing as a part of his company's growth strategy?
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Parul Bhargava: I think that's a very good question and something that
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Parul Bhargava: I juggle with almo juggle and struggle with almost every
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Parul Bhargava: day
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Parul Bhargava: because in all honesty and in all appreciation, we are
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Parul Bhargava: seen as magic makers, and sometimes even the newbie or
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Parul Bhargava: early stage entrepreneurs do come to us and ask how performance,
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Parul Bhargava: marketing and affiliate marketing can help them, and they can
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Parul Bhargava: only spend when they get our.
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Parul Bhargava: So I think this is a very big myth that
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Parul Bhargava: people or a misconception that people don't really understand performance,
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Parul Bhargava: marketing or affiliate marketing as a marketing channel itself. So
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Parul Bhargava: it has the same risk it has. It needs the
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Parul Bhargava: same funnel. It needs the same research it needs, the
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Parul Bhargava: same feedback
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Parul Bhargava: you would give to any other marketing channel. So I
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Parul Bhargava: would say, any entrepreneur, any business, whether they are they
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Parul Bhargava: are early stage or they are mid stage or they
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Parul Bhargava: are established. Affiliate marketing can work for everyone as long
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Parul Bhargava: as you know the funnel. And as long as you
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Parul Bhargava: have the expectations right,
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Parul Bhargava: especially in the e-commerce industry, I'll just give an example
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Parul Bhargava: of that. So if you know you're looking at affiliate
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Parul Bhargava: marketing to begin with, you have to understand that affiliate
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Parul Bhargava: marketing can give your business a bump of about 20%.
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Parul Bhargava: So it's not that you are just starting your store
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Parul Bhargava: or you're just starting a website and you come to
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Parul Bhargava: any affiliate network or any affiliate and say that, Hey,
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Parul Bhargava: we want to start with performance marketing. We want to
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Parul Bhargava: start with affiliate marketing because we can only pay per sale,
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Parul Bhargava: which is absolutely fine. But then they come with unrealistic expectations, saying, Oh, No,
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Parul Bhargava: I think we should do about 100 orders in a
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Parul Bhargava: month or 100 orders in a day. So I think
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Parul Bhargava: that's what
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Parul Bhargava: the clear differentiator or the clear Cruxes affiliate Marketing is
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Parul Bhargava: a very beautiful concept. Obviously, I'm always an advocate for it.
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Parul Bhargava: I've been in this space for a decade and a half,
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Parul Bhargava: an industry that is very close to my heart, so
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Parul Bhargava: affiliate marketing can work for everyone. But you should know
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Parul Bhargava: your funnel. You should have your expectations.
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Saikat Pyne: What are some of the most common misconceptions that you
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Saikat Pyne: see founders have about affiliate marketing and its impact on
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Saikat Pyne: their business?
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Parul Bhargava: So the first misconception is that if they just give
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Parul Bhargava: us a URL, we can blast it out to I
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Parul Bhargava: don't know, the Internet, and the sales will start flowing
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Parul Bhargava: in as dramatically as I put it. That's really the expectation.
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Parul Bhargava: Second myth is, or the second misconception is that tracking
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Parul Bhargava: in our domain is underrated and it can be done
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Parul Bhargava: away with if we are just getting the right URL.
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Parul Bhargava: I don't think that's the right approach to go about it.
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Parul Bhargava: Tracking and the correct technical implementation to deliver the goal
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Parul Bhargava: that the business demands
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Parul Bhargava: from performance. Marketing is very important. We just cannot rely
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Parul Bhargava: on an external tool, even if it is Google analytics.
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Parul Bhargava: I need to see the whole journey from the click
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Parul Bhargava: to sale in my dashboard to be able to optimise
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Parul Bhargava: it according to the goal that I am committing to you.
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Parul Bhargava: So I think what is again, a very important point
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Parul Bhargava: that is misunderstood.
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Parul Bhargava: A third important point also, sometimes that people either sideline
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Parul Bhargava: or don't understand well is pricing the affiliate marketing campaign
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Parul Bhargava: like when we are loading up a campaign on any
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Parul Bhargava: other DS p or platform. We bid real time. We
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Parul Bhargava: accept what rates are given to us. But while we
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Parul Bhargava: are checking out affiliate marketing or planning an affiliate marketing campaign,
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Parul Bhargava: we start to get into our p N L.
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Parul Bhargava: Rather than what is the traffic cost? What is my
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Parul Bhargava: conversion rate and what is the cost per acquisition is
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Parul Bhargava: going to be So the whole trick of this is
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Parul Bhargava: my profit. I can give you 20% of my profit
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Parul Bhargava: versus my cost per acquisition on another external channel is X,
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Parul Bhargava: and I'm willing to give you X is something that
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Parul Bhargava: is that's a conversation that's very underrated, especially in new businesses.
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Saikat Pyne: How should a founder really go about strategizing their affiliate
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Saikat Pyne: marketing
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Parul Bhargava: efforts? So what I recommend is every new business or
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Parul Bhargava: every marketeer. While starting off with affiliate marketing, they should
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Parul Bhargava: at least have an experience of running an advertising campaign,
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Parul Bhargava: even on on search or social media. Wherever themselves,
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Parul Bhargava: they should know how much a click costs they should know.
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Parul Bhargava: What are their conversion rates? They should know how or
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Parul Bhargava: in how many click throughs is the person landing to
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Parul Bhargava: the checkout page? What are people actually ordering for on
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Parul Bhargava: the website? If there is a certain split between Let's say,
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Parul Bhargava: C o d or prepaid wise that or if there
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Parul Bhargava: are draws
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Parul Bhargava: outs from check out page or there are abandoned cards,
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Parul Bhargava: they should know why you know they exist. Once you
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Parul Bhargava: have your funnel ready, you understand how a consumer behaves
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Parul Bhargava: when he lands on to your website to pay the channel.
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Parul Bhargava: I'm not talking about organic, particularly here, but you should
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Parul Bhargava: know how someone behaves on your own
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Parul Bhargava: website. Through a paid channel. You will be able to
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Parul Bhargava: gauge what you know even for performance marketing. How a
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Parul Bhargava: marketing campaign should perform for you rather than having unrealistic expectations.
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Parul Bhargava: Rather than putting pressure on affiliates to deliver something that
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Parul Bhargava: possibly they can't deliver,
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Saikat Pyne: then how would you recommend founders pick their affiliates? I
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Parul Bhargava: think Founders now and businesses now are very smart, and
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Parul Bhargava: they are picking content creators or media according to what
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Parul Bhargava: their niche industry is. So enough has been said and
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Parul Bhargava: done about what particular media works better for which niche
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Parul Bhargava: or which kind of vertical. So I think they are
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Parul Bhargava: very smart in doing that.
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Parul Bhargava: However, I feel when an
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Parul Bhargava: A business is starting with an affiliate marketing campaign or
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Parul Bhargava: a performance marketing campaign, they should also be very sure
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Parul Bhargava: of the mix that they want from branding to R. O. I.
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Parul Bhargava: Obviously they pay on R O I alone in a
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Parul Bhargava: performance marketing campaign or an affiliate campaign. Whatever it might be,
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Parul Bhargava: it could be a lead. It could be a sale.
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Parul Bhargava: It could be a registration. It could be an APP download,
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Parul Bhargava: whatever that is. However, in initially, it should be a
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Parul Bhargava: very good mix, so they need eyeballs as well as
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Parul Bhargava: those goals. Even if you're paying a little bit higher
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Parul Bhargava: for that goals but goal. But you're getting that visibility
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Parul Bhargava: and eyeballs and initial traffic that you need push from.
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Parul Bhargava: I think they should definitely focus on that.
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Saikat Pyne: Got it? And when it comes to the metrics, because
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Saikat Pyne: I'm sure when it comes to performance or affiliates, marketers
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Saikat Pyne: or founders are all about the metrics, what are the
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Saikat Pyne: metrics that you recommend founders or marketers track when it
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Saikat Pyne: comes to affiliates, especially their first affiliate campaign? Let's say
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Saikat Pyne: where there is really no benchmark for them about adoption
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Saikat Pyne: or conversion from these sorts of campaigns,
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Parul Bhargava: So I would recommend them to be open minded. It's
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Parul Bhargava: not necessary that you just be held bent on running
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Parul Bhargava: a sales campaign. For example, if I have, let's say
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Parul Bhargava: a very random example, I have a mobile application for
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Parul Bhargava: some game, and obviously I will make money when they
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Parul Bhargava: are in APP purchases as a business. Now, if
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Parul Bhargava: I be hell bent on, I will do a rep
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Parul Bhargava: share campaign only with the affiliate, and I will pay
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Parul Bhargava: the affiliate or influencer or marketer only when I'm getting
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Parul Bhargava: an enough purchase. I think that would be a very
00:09:51
Parul Bhargava: restrictive way of looking at it. however, you make your
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Parul Bhargava: own funnel that in these many instals these are the
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Parul Bhargava: registrations that I get this percentage of first,
00:10:03
Parul Bhargava: maybe free play or first place what I get and
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Parul Bhargava: then get. Then I get a deposit, and then my
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Parul Bhargava: LTV is off about X amount. And so to get
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Parul Bhargava: initial traction and to reach that first milestone of, let's say,
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Parul Bhargava: a 10 downloads or something, I'm willing to pay some
00:10:20
Parul Bhargava: amount per download so that I see this media. I
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Parul Bhargava: will solve multiple intentions, multiple objectives through through this campaign.
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Parul Bhargava: Number one, I will have plays store rating. I will
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Parul Bhargava: have people installing my campaign. I will know the paid
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Parul Bhargava: media funnel better as if when someone is coming from
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Parul Bhargava: a paid channel. How are they reacting on my app?
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Parul Bhargava: What is my exact LTV from organic versus paid, and
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Parul Bhargava: then it also loops in organic it it attracts organic
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Parul Bhargava: as well, so initially it has to be that route
00:10:54
Saikat Pyne: when it comes to the affiliate marketing space, specifically in
00:10:58
Saikat Pyne: newly emerging sectors like B two C and SAS, there's
00:11:01
Saikat Pyne: also a lot of competition, with a lot of similar
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Saikat Pyne: players coming up and all of them are vying for
00:11:07
Saikat Pyne: attention from a limited number of publishers, a limited number
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Saikat Pyne: of creators. You spoke about the kinds of models that
00:11:15
Saikat Pyne: generally work rep share versus paying, sometimes for the visit.
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Saikat Pyne: What are some of the industry advice that you offer
00:11:24
Saikat Pyne: to founders about how to stand out within slightly competitive
00:11:29
Saikat Pyne: markets and attract top performing affiliates, especially if they're starting
00:11:33
Saikat Pyne: out and are a bit wet behind the ear? Really?
00:11:37
Parul Bhargava: So interestingly, what I see is when new D two
00:11:41
Parul Bhargava: C founders and new SAS founders are starting up, they
00:11:46
Parul Bhargava: start in a model called or the maximum traction that
00:11:50
Parul Bhargava: they get is out of a model called cost per acquisition.
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Parul Bhargava: It is not a REV share. It's not a percentage
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Parul Bhargava: of what the user is deposit, but it's mostly, for example,
00:12:01
Parul Bhargava: if one month or one week of my software is
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Parul Bhargava: X for that, I'm ready to pay the affiliate for X.
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Parul Bhargava: There are so many new D two C founders who
00:12:15
Parul Bhargava: have done this. Now they are unicorns, and there are
00:12:18
Parul Bhargava: so many new and established A players and software companies
00:12:22
Parul Bhargava: that still do this. I think this is a very, uh,
00:12:25
Parul Bhargava: though it Obviously, it is a very risky way of
00:12:28
Parul Bhargava: doing things because I'm sure that they know
00:12:31
Parul Bhargava: LTV better. But I think it's a very innovative way
00:12:36
Parul Bhargava: of bringing in a consumer by luring him, especially in
00:12:41
Parul Bhargava: price sensitive markets. And they should be sure that once
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Parul Bhargava: a consumer becomes my customer, I have all the means
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Parul Bhargava: to retain him.
00:12:53
Saikat Pyne: And does that also then mean as companies mature, whether
00:12:57
Saikat Pyne: be it in the D two c space or a space,
00:12:59
Saikat Pyne: they should re look at their affiliate marketing the value
00:13:04
Saikat Pyne: proposition of their affiliate marketing efforts.
00:13:06
Parul Bhargava: No, I think at any stage there should always be
00:13:09
Parul Bhargava: experimentation on different ways of running a marketing campaign, because
00:13:15
Parul Bhargava: do affiliate marketing or do performance marketing and very R O.
00:13:19
Parul Bhargava: I based but
00:13:21
Parul Bhargava: and different commission models and different iterations in our industry
00:13:25
Parul Bhargava: also bring amazingly different results. So I think even if
00:13:30
Parul Bhargava: you are a big, brand established brand, you should revisit
00:13:34
Parul Bhargava: or bring new innovation into a campaign every six months.
00:13:39
Parul Bhargava: And if you are a new company or a new business,
00:13:42
Parul Bhargava: starting with this model, do not alter the business for
00:13:46
Parul Bhargava: at least a quarter to know the results because
00:13:49
Parul Bhargava: the big companies or the established businesses work in a
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Parul Bhargava: different way, where they want to run the same campaign
00:13:55
Parul Bhargava: for years and years. The new entrants. They try to
00:13:59
Parul Bhargava: play around with everything every month, sometimes even every week
00:14:03
Parul Bhargava: that this week we give you this payout. Next week,
00:14:06
Parul Bhargava: we'll give you this payout. Now we want this landing page.
00:14:08
Parul Bhargava: Then we want that landing page. So I think that also,
00:14:12
Parul Bhargava: it's a lot of disturbance for anyone who's trying to
00:14:15
Parul Bhargava: run performance marketing. If you are running a campaign, the
00:14:19
Parul Bhargava: age or the minimum age that you want the campaign's
00:14:23
Parul Bhargava: performance to actually start talking to you is three months.
00:14:26
Parul Bhargava: We start optimising in about three weeks. In about 2
00:14:29
Parul Bhargava: to 3 weeks, we start optimising, but for the campaign
00:14:32
Parul Bhargava: to mature, it takes three months.
00:14:35
Saikat Pyne: Then what are the indicators for you personally? That this
00:14:38
Saikat Pyne: campaign has really matured
00:14:41
Parul Bhargava: for me? Conversion rates
00:14:44
Saikat Pyne: got it. And what is generally the window for conversion
00:14:47
Saikat Pyne: rates after maturing?
00:14:49
Parul Bhargava: It depends, uh, absolutely on the media that you're running
00:14:54
Parul Bhargava: on and what your funnel is Honestly, I've seen, especially
00:14:59
Parul Bhargava: with influencer and blogger space. I've seen conversion rates as
00:15:05
Parul Bhargava: high as 60% also,
00:15:07
Parul Bhargava: and it doesn't matter that it needs to be a
00:15:09
Parul Bhargava: mature campaign. It needs to be right when you're starting
00:15:12
Parul Bhargava: as well, depending on how you are pricing the campaign
00:15:16
Parul Bhargava: and how targeted the audience is. And I've seen conversion
00:15:20
Parul Bhargava: rates as low as 0.1%. Also, when it just does
00:15:26
Parul Bhargava: doesn't convert it, it's just that we need to price
00:15:29
Parul Bhargava: it well. We need to take it to the right
00:15:32
Parul Bhargava: target audience, and the conversion rate should be in line
00:15:36
Parul Bhargava: to what the organic conversion rates are.
00:15:39
Saikat Pyne: No worries. My last question was for content creators. How
00:15:46
Saikat Pyne: does a content creator become a good affiliate without being
00:15:50
Saikat Pyne: labelled as a sellout?
00:15:55
Parul Bhargava: Well, very interesting question,
00:15:58
Parul Bhargava: I think integrating the product that you are selling very
00:16:02
Parul Bhargava: subtly into your content
00:16:05
Parul Bhargava: and not contradicting it in the coming content that you produce.
00:16:12
Parul Bhargava: So there are a few content creators that I follow,
00:16:16
Parul Bhargava: and sometimes that they say that this is one product
00:16:20
Parul Bhargava: that I use every day, and this is a part
00:16:22
Parul Bhargava: of my regime, and it's a sponsored product. And then,
00:16:26
Parul Bhargava: after five days for the same concern, they are talking
00:16:29
Parul Bhargava: about another product and after a month they are talking
00:16:32
Parul Bhargava: about another product. So
00:16:34
Parul Bhargava: I think this just confuses the audience so much, and
00:16:37
Parul Bhargava: it's very out and out obvious that you are just
00:16:40
Parul Bhargava: trying to do a paid partnership without even knowing what
00:16:43
Parul Bhargava: we are doing. So I feel if we have to
00:16:47
Parul Bhargava: try to deliver maximum sales without being labelled as a
00:16:51
Parul Bhargava: sell out, it should be to integrate it in a
00:16:54
Parul Bhargava: way where you tell your audience honestly that I have
00:16:59
Parul Bhargava: been only using it for about whatever, a week or
00:17:02
Parul Bhargava: 10 days I received this
00:17:03
Parul Bhargava: product and this was my honest feedback and only post
00:17:07
Parul Bhargava: positive feedback. I'm not saying go anti brand, and if
00:17:10
Parul Bhargava: you receive a product, you even start talking bad about
00:17:14
Parul Bhargava: the product that you don't like. But at least use
00:17:17
Parul Bhargava: the product that you get. Give honest, opinion this card
00:17:21
Parul Bhargava: and politely decline the product that you don't like by
00:17:24
Parul Bhargava: saying that he thanks for this, but I don't think
00:17:27
Parul Bhargava: I want to do that. So I think that that
00:17:30
Parul Bhargava: should be the ideal way to go about it.
00:17:34
Saikat Pyne: Lovely. And on that insightful note, guys, it's a wrap.
00:17:38
Saikat Pyne: Thank you so much for being on the show. I
00:17:40
Saikat Pyne: really appreciate you taking time out. Thank you.
00:17:43
Saikat Pyne: OK, guys. See you next week on the next episode
00:17:47
Saikat Pyne: of the U Incorporated podcast. See ya.