introduction to affiliate marketing 20.03.2012 final
DESCRIPTION
Affiliate Marketing, Performance Marketing, CPA, CPL, CPCTRANSCRIPT
Who or what is an affiliate
What is affiliate
marketing Will it work for me? Introduction
5 Steps to create my
own affiliate program Case Study
Agenda
Today’s Session
• Part 1: 2 hours
Understanding of the What, Why, When, How & Who of Affiliate Marketing
• Part 2: 1 Hour
Case Studies, and Break out session, and Questions
Slide � 3
What is Affiliate Marketing?
Simple definition
• Website’s (affiliates) generate leads and sales
for (merchants), in return for reward
Slide � 6
Market Size & Trends
Slide � 7
Affiliate marketing drove £4.62bn in online sales during 2010, a 12% increase on 2009(£4.13bn) This means affiliate marketing drove 8% of all online retail sales
Affiliate continues to show
strong growth
And steal share of the media
mix
A recent IAB study of 140 advertisers showed:
77% of respondents said that marketing spend
for affiliates had grown and 71% expected it to
grow again in the coming year
19% of respondents are paying out over £100k
month in affiliate commissions
Over ¼ of respondents spend more than 20% of
online marketing budgets on the affiliate
channel
Acquiring our share
IAB Survey December 2011
Affiliate Marketing is significant in spend
European Affiliate Marketers’ Online Ad Spending Distribution
5%
43%
21%
19%
12%
Classifieds
Search
Affiliate
Display
Why use Affiliate Marketing?
Where does affiliate fit into my online strategy?
Metrics
�Performance based: only pay for conversions, clicks, leads, sales
�Tracking required: usually done through an affiliate network
�Cost per Acquisition, cost per click, cost per lead, cost per download, cost per view, cost per Facebook like
How does it work?
The 4 Key Elements
Merchant
Network
Affiliates
Consumers
A typical customer journey?
Consumer Affiliate Network Merchant
1 2 3
6 5 4
Legend
Traffic
Payments
Customer is driven to the affiliates site via a search engine , email or bookmark1 TradeDoubler tracks the referring affiliate (Fatcheese.ie) and sets a cookie on the users machineUpon conversion the TradeDoubler pixel is fired taking into account any de-duplication rulesDepending on the pixel implemented data is sent back to TradeDoublerCommission is calculated based on event ID, tiers and conversion data capturedPayments are made by TradeDoubler to each affiliate, this data is available to them through our
interface, affiliates can access using their unique login details23456
Implications for merchants
• The benefit for the merchant is simple;
– They only pay out on results
–Guaranteed ROI
– Zero risk strategy
Slide � 18
Implications for affiliates
• affiliate’s need to become experts in driving
relevant traffic to merchants websites in
order to maximise return for themselves.
• The affiliate spends their own time and
money driving traffic to the merchant and only
gets paid if they deliver results.
Slide � 19
Implications for networks
• Must work with a large number of affiliates
• Only make money if they can drive sales for the merchants
• Networks must have accurate reporting and tracking
Slide � 21
Who are these Affiliates?
What is an affiliate?
• Has anyone heard of
• affiliates are:
“companies, groups and individuals who promote
merchants through one, or many of the various forms of
affiliate marketing”
Slide � 22
Who are the affiliates?
Slide � 23
34%
46%
20%Full Time
Part Time
Hobbyists
Female V’s Male
82%
18%
Male
Female
Where do they work from
81%
19%
Home V's Office Working
Home working
Office Based
Affiliate Types
13%
6%
3%
8%
4%
31%
7%
28% Search
Email Marketing
Media Agency/ Media Broker
Portal/ ISP
Price Comparison
Reward/ Loyalty
Shopping Directories
Content
6,500 active affiliates with circa 1,000 active affiliates each month
Source; Tradedoubler
Types of affiliates?
Content
Emailers Voucher code
Comparison sites
Shopping directories
Cashback
In reality affiliates are entrepreneurial early adopters who operate across the entire digital spectrum
Content affiliates
Emailers
Slide � 29
Shopping Directories
Cash Back
Loyalty Website’s
Voucher Code Website’s
Cashback affiliates UK
Slide � 34
Slide � 35
The Affiliate Networks
What is an affiliate network?
“affiliate networks provide their clients(merchants) with a gateway to large numbers of individual affiliates and enable all parties to track results through the use of their technology”
Slide � 36
Who are the affiliate networks?
Slide � 37
TradeDoubler are the affiliates
network of choice
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
TradeDoubler Webgains Zanox Affiliate Window NetAffiliation CommissionJunction
Affilinet Daisycon PublicIdees Linkshare
Source: A4U European affiliate landscape report September 2011
Across 18 countries affiliates were
asked the question…
“Who are the preferred
affiliate networks that
you currently work with”
What makes TradeDoubler
Europe's No.1 network
0
1
2
3
4
5
6
7
8
9
Trackingreliability
Quality ofadvertisers
Paymentreliability
Paymentfrequency
Range ofadvertisers
Transparency Reputation Exclusivity ofprograms
Source: A4U European affiliate landscape report 2011
Across 18 countries affiliates were
asked the question…
“Which features makes
that network your
preferred choice to
work with ”
Who uses affiliate marketing
Biggest Verticals
Slide � 41
Financial services
Retail
Telecoms
Broadband
1
2
3
4
5
Travel
Gaming6
7 Recruitment
Some familiar brands...
Entertainment...
Telco
Online gaming...
Recruitment...
IT/Software...
To Summarise
Merchant
Network
Affiliates
Consumers
Slide � 50How does this apply to you?
Types of Affiliate Campaigns
Slide � 51
Sales
Online form completion – insurance quote/laser eye surgery
Email acquisition – qualified email address for database
Sign up / subscriptions – competitions/prize draws
1
2
3
4
5
Downloads – music / promtional code
Merchant objectives are varied...
Free samples – beauty, mailing address 6
7 Account acitvation – gaming sites/ banks
Types of Affiliate Programs
CPACPA
CPLCPL
CPCCPC
Description CPA CPC CPL
Cost per acquisition/sale Cost per click Cost per lead
You pay for Sales Clicks Contact details
Best for: brand awareness & sales traffic drivingbuilding customer database
Creative requirements: Price led offers Call to action Competition
Publishers like variation in formats potential revenue Variation in formats
High conversions High Click through rates
Sticky content
No purchase necessary
Publishers dislike Reliance on your: Reliance on your:
- Product - Creative Appeal of offer
- Sales process - Strong call to action Sharing user data
- Ability to convert online - Use of CPM inventory
Testing required? YES YES NO
Types of Affiliate Programs
Slide � 54
� Cost per click- Social Ads on Facebook. These ads can be micro-targeted, there is no “Like” feature here.
� Cost per Like- Social ads and sponsored stories that are micro-targeted. The likes are published as social interactions into the newsfeeds of users. A user can additionally like a Facebook page after click through.
� Cost per connect- using Facebook Connect button, gives access to certain user information. The user double opts-in to allow access to the information requested by the advertiser, whether it’s basic user info or more detailed like e-mail address and access to their calendar.
� Cost per download/lead/action- offers are distributed in-game to drive CPL, CPA, and CPI in exchange for Facebook Credits.
Social affiliate
4 Questions to ask myself?
When to use Affiliate Marketing?
Affiliate Marketing
1. Is your website e-Commerce
ready?
2. Are you selling B2C products or services?
3. Do you want to grow your online sales by 15 -
20%?
4. Do you want to
deliver sales or leads to your call centre?
5 Steps to creating your affiliate programme
Set commission levels
Integrate pixel tracking
Identify suitable affiliates
Provide collateral & test
Soft launch, Go Live
• Guidelines for CPA:
• Can be set amount or % commission
• Should be approx. 50% of your profit after
costs
• Need to incentivise the publishers
Step 1: Set your commission levels
• Pixel tracking software tracks:
- The source of the traffic
- The number of impressions
- The number of clicks
- Time and date of activity
- No consumer data is captured
Step 2: Integrate pixel tracking
Step 3: Identify suitable publishers
• Who is your target market?
• What sites do they frequent?
• Broad reach / high volume sites?
• Niche targeted sites?
• Existing off line relationships?
Step 4: Provide ammunition / collateral
• Banner ads IAB standard unit sizes
• XML feeds
• Text links
• Logos
• Price led offers
• Widgets
Automate as much as possible
Step 5: refresh your creative
• Use dynamic content where possible (XML)
• Update offers frequently – keep them fresh
• Use appealing images (easy for travel)
• Use special offers and discounts to achieve a
high CTR
Affiliate program charges vary
• Network over-ride Charges- Typically 30% of affiliate commission
• Set up- Technical Integration- Between Zero to €1,500
• Monthly Management Fee-Typically between €250 - €1,000 PM
Guidelines for CPA:
Work out life time value of a customer
DMA (direct marketing association) estimate that one
qualified contact on an email database generates
on average 2.7 SALES over a 18 month period.
CPLs range from €3 - €50 depending on industry
Step 1: Set your commission levels
Creative Examples
Slide � 65
Souls email
Pricing
Site usability
Look and feel
Brand
Relevant content / deep linking
Simple Booking/sale process
Conversion – its up to you
Publisher’s that see
results will give you more prominence
Key Benefits
CPACost
Effective Customer Acquisition
Only Pay for Sales
SEO
Brand Visibility
Achieve high
Rankings
ROIDrive
Revenue
Measurable
Transparent
Case Study
• Type: Pan European CPA
• Focus: Online Sales
• Regions:10
• Length of Program: 11 years
• Number of Events: 8
• Bonus/Tariffs: Varied between events
• Irish Affiliates working on the program: 210
• Yearly Sales
Slide � 68
Case Study
• Type: UK & Ireland CPA
• Focus: New online Shoppers
• Regions:2
• Length of Program: 11 years
• Number of Events: 10
• Bonus/Tariffs: Varied per program
• Figures to date 2011 : Clicks 18M, Sales 653K, Cart Value £56M
Slide � 69
Case Study
Slide � 70
� Type: Lead Generation CPC
� Regions: 1
� Length of Program: 8 weeks
� Number of Events: 1
� Bonus/Tariffs: €1.75CPC
� Targets: 500 =clicks per month
Case Study
Slide � 71
� Type: Lead Generation CPL
� Regions: 1
� Length of Program: 1 years
� Number of Events: 1
� Bonus/Tariffs: €7 CPL
� Targets: 500 per month
Breakout Session
Summing Up
1. Know the value of a sign up/sale in order to set
commissions
2. Make it worth it for the publisher
3. Its up to you to convert traffic to sales!
4. Review & refine
5. Don’t view it short term – integrate into
marketing plan
4 Key Elements
Merchant
Network
Affiliates
Consumers
3 Key Benefits
CPACost
Effective Customer Acquisition
Only Pay for Sales
SEO
Brand Visibility
Achieve high
Rankings
ROIDrive
Revenue
Measurable
Transparent
Open Forum?
Slide � 77
Daniel Desmond
Sales Director TradeDoubler [email protected]
@danielmdesmond +353 86 7852345
Retargeting Example
Slide � 78
Retargeting
Slide � 79