An AOR (Agency Of Record) agreement gives agencies (or networks) exclusive rights to an offer. Hence the AOR Agency will have full control over certain traffic types and often times access to your CRM, stats, and other confidential information.
At any rate, last week I received an email from a direct marketer RE my thoughts on giving exclusivity to agencies on offers. It’s a no brainer, EXCLUSIVITY is a must. In fact, if the agency you’re working with doesn’t ask for an AOR (exclusivity), it’s an immediate red flag. I am a HUGE FAN of AOR agreements. Here’s why:
There’s a shit ton of work that goes into running media to an offer. From setup, planning, monitoring, all the way to optimizing, the opportunity cost for agencies is enormous. That’s one of the reasons why the best agencies require full exclusivity.
Additionally the best agencies will work hand-in-hand with you to tighten up loose ends on your offer. In theory, the higher your ROI on your advertising spend, the more money you’ll have accessible for future advertising spends…agencies almost always earn a percentage of your spend, whether it’s on a CPM, CPA, or CPC basis. Logically the Agency Of Record has a vested interest in seeing that your offer does well, or else they’ll have wasted their time and you’ll break the exclusivity arrangement and go elsewhere….
Before I delve into the 7 reasons to sign an AOR agreement, let’s discuss 4 important pitfalls to avoid in AOR agreements:
4 Pitfalls To Avoid In AOR Agreements
1. Giving Full Exclusivity On All Traffic Sources
NEVER give full exclusivity over every traffic channel to your agency. Each agency has it’s strengths and weaknesses. Identify the core focus of the agency and then provide exclusivity to their area of core competency.
i.e. In some cases I’ve provided AOR over specific countries to my media media partners. In other cases I divvy up the traffic sources.
Right now I have different partners handling my display, search, radio, TV, and Facebook ads. Remember that DREAM TEAMS are made up of eclectic resources ;0)
2. Forgetting To Add Performance Clauses
Make sure to add REALISTIC performance clauses in your AOR agreement. Look, you’ve got the hot offer, so the last thing you want is for this agency to sit on it and do nothing! Make sure that you have clearly defined performance measurements that are grounded in reality. In the event that the agency doesn’t live up to its performance commitments, then the exclusivity breaks and you’re free to go elsewhere. Keeps everyone honest
3. Agreeing to No Early Termination
If things aren’t working out you should be able to take your business elsewhere. Never agree to “no early termination” clauses in exclusivity agreements.
I usually add a “soft landing” 2 week notice of cancellation of exclusivity by either party for ANY REASON. That way it keeps both parties on their toes at all times…you never want your agency to get too comfortable with ya
4. Allowing The Agency/Network to Broker Your Offer
Maintaining strict control over the traffic is a must. NEVER allow your AOR to broker your offer to other agencies or networks. Your AOR should have THE ABILITY to send traffic themselves, otherwise it would only make sense for you to work with the actual source of traffic.
When your offer gets brokered out to other agencies, you essentially lose control over the traffic source. I’ve personally dealt with the following brain damage when my offers were brokered out in the past:
- All time low rebill rates. On offers that rebilled at 60%+ on premium traffic channels, brokered traffic brought in rebills south of 20%.
- Stolen credit card submits. Spikes in hourly sales turned out to be affiliates defrauding our offers with stolen credit card submits in hopes of earning a CPA.
- Incent Traffic. Incent traffic SUCKS. These are not legitimate customers, rather they’re people that are signing up for your product/service because they want to win a “FREE iPAD 3″ or some other prize. PUKE.
- Prepaid Card. When you’re offer rebills at north of $50 and a prepaid card is submitted with a $5.95 balance, you’re shit out of luck.
- Fake presale pages, creatives, and deceptive marketing material. Probably the #1 reason why I stopped working with the majority of affiliate networks is because nearly 100% of their traffic comes from the usage of flogs, farticles, or other deceptive marketing material…. That’s not marketing, it’s illegal advertising.
When your offer gets brokered out your AOR has someone to point the finger at when you complain, yet there’s 4 fingers pointing back at them.
BOTTOM LINE: Don’t allow your offer to get brokered out
7 Reasons to Sign AOR Agreements
On my offers I either run the traffic myself or outsource the traffic on an AOR basis. Here’s 7 reasons why I sign AOR agreement:
1. Individualized Attention
When a good agency has exclusive rights over an offer, they treat it like their own. You will receive focused attention and have access to resources that you otherwise wouldn’t have.
2. Free Creatives & Copy
The best agencies will provide you with access to the best copywriters & creative development teams for free. i.e. the AOR for my radio campaigns just wrote and shot these 5 radio commercials for free!!! The following creatives would have cost thousands of dollars to an advertiser who was not an AOR with this agency:
3. Performance Measurements
You should have the highest level of trust with your AOR, otherwise they shouldn’t have exclusivity. I give my AOR’s full access to backend stats so they can work as true partners and maximize my ROI on campaigns. You simply cannot provide campaign access to run-of-the-mill traffic source.
4. Mitigation Of Bad Traffic
Solid AOR’s give you full control over the traffic that’s ran to your offer. A MUST for high volume campaigns with millions of dollars at stake.
The higher level of transparency virtually eliminates the risk of fraud & poor traffic.
5. Fly Below The Radar
In the zeitgest of the times, you don’t want your offer floating around every affiliate network out there. Enough said, and if you don’t get it, then you’re not a direct response marketer
6. Higher Volumes Of Traffic
The top agencies have the ability to send thousands of leads a day to your offer. If you’re willing to make the commitment to a great agency, and they accept you into their group, then you should expect to experience higher volumes of traffic in the long run than with non-exclusive relationships
7. High Level Business Development
The best agencies out there will provide you with high level business development at no additional cost. Several of the agencies that I work with handle the market research, testing, language translations, call-center setups, procurement of processing, etc. for us. This allows us to focus on what we’re great at: creating innovative offers that convert at the highest levels!!!