is affiliate marketing just an alternative? (basics, size, trends, opportunities)
DESCRIPTION
Geno Prussakov's presentation on whether affiliate marketing is "merely an alternative" (to other channels of online marketing). Presented on June 27, 2013 at Search Marketing Day in Poznan, PolandTRANSCRIPT
Is Affiliate MarketingMerely an
“Alternative”?Geno PrussakovCEO & President, AM Navigator LLCwww.amnavigator.com Founder & Chair, Affiliate Management
Dayswww.affiliatemanagementdays.com
(+1) [email protected]
@ePrussakov .
Affiliate Marketing is…
State of the Industry
Trends & Opportunities
Outline
Affiliate Marketing is…
The Definition...performance-based marketing, whereby affiliates
promote your product/service & get compensated for every customer/lead referred.
Who Are “Affiliates”? “The term ‘affiliate’ means any company that
controls, is controlled by, or is under common control with another company” /Compilation of State and Federal Privacy Laws, 2002, p. 76/
“The term ‘affiliate’ can be used as a generic word to indicate either a subsidiary or division” /Business information: how to find it, how to use it, 1987, p. 38)
Terms “affiliate and subsidiary” are “used synonymously” /International dimensions of management, 1989, p. 2/
Who Are “Affiliates”?Affiliates:
Independent marketers who may choose to promote a business, and be paid on performance-based arrangement.
Types:i. Content (Answers.com)
ii. Coupons (RetailMeNot)
iii. Data feeds (Shopzilla)
iv. Display (Forbes.com)
v. Email
vi. Loyalty (TopCashBack)
vii. Mobile
viii. SEM (SEO & PPC)
ix. Social Media
x. Video
So Affiliate Marketing is…
... “the art of doing a merchant’s marketing better than they can,
and profiting from it.”Chris Sanderson, AMWSO
How Much Do They Make?
Source: Darren Rowse, The Ultimate Guide to Making Money with the Amazon Affiliate Program,
ProBlogger.net, 4/24/2013
Note: The y-axis reflects shows earnings in USD
January-September: 13,000 UVs/mo
October: 95,000 UVs
November: 2,000,000 UVs
How Much Do They Make?
“Amazon ...derived about 40% of its sales from partners participating in their “Associates”
program.”
Source: Siegel M. & Gibbons F, 2008, Stanford University,Amazon Enters the Cloud Computing Business, p. 6
How Much Business They Bring?
Our experience: 20%-40%
Affiliate Marketing ≠ Channel
“…but, rather, a way of remunerating a marketer… hence, affiliate marketing really exists on the crossroads of a number of online marketing channels and works with nearly all of them.”
Source: Affiliate Program Management: An Hour a Day (p. 24)
It is a marketing context, based on the principle of performance-based compensation.
Affiliate Marketing ≠ Channel
It is integral to understand this for ensuring proper/healthy co-existence (not conflicting, or cannibalizing, but complementing) of affiliate program with all channels of marketing that the merchant is employing.
State of the Industry
Size of the Industry (US)
• Advertiser/merchant count: 10,000+
• Publisher/affiliate count: 1,000,000+
• Spend: ≈$3,000,000,000
Size of the Industry (UK)
• UK advertiser/merchant count: ~3,000-4,000
• UK publisher/affiliate count: ~10,000
• Impact scale: ~100 million transactions, and ~70 million leads
• Scale: 7-9% of UK online marketing spend; ~6% of the UK Internet economy; .6% of GDP
• Growth: since 2008 UK affiliate marketing has registered an average 12% YoY growth
Source: PriceWaterhouseCoopers study commissioned by the Internet Advertising Bureau UK, January 2013
Size of the Industry (Russia)
Source: AdLabs.ru estimates & forecast, as quoted by a CPA Club Russian Facebook group member
$2.4 million 2003 → $65.6 million in 2012
Trends & Opportunities
From hype to reality:
Attribution (improvements in tracking & reporting; e.g.: AvantMetrics, ImpactRadius, PHG, TagMan, etc)
Video (tools; e.g.: ShareASale, Coull, Viewbix)
Offline (bridging the online/offline gap; e.g.: RingRevenue, mobile-to-store campaigns, etc)
Trends
Opportunities in EvolvingAffiliate Marketing Landscape
See video from:
http://www.youtube.com/watch?v=5f6ievv-70E
Opportunity #1: Mobile
Opportunity #1: Mobile
Set to eclipse desktop by 2014
71% of smartphone owners shop on mobile
Opportunity #1: Mobile
Mobile sales = 11% of e-commerce sales (2012), 15% (2013), 18% (2014) 21% (2015), 24% (2016)
Sources: Morgan Stanley, Skava, Branding Brand, eMarketer
Opportunity #2: Social
Source: BIA/Kelsey, April 2013
Social shopping
Opportunity #2: Social
Social shopping
Opportunity #2: Social
Social shopping
Social gaming (warning: doesn’t work w/ PPL)
Podcasting
Q&A and review websites (in US: disclosures)
Social media ads
Proactive conversation design
Opportunity #2: Social
“The total value of the global real-time mobile location-based marketing and advertising market will grow from € 192 million in 2011 at a CAGR of 91 percent to € 4.9 billion in 2016.”
Source: Berg Insight, Location-Based Advertising and Marketing, May 2012
Opportunity #3: Local
Offline performance marketing (e.g. PPCall)
Opportunity #3: Local
Source: RingRevenue.com
Offline performance marketing (e.g. PPCall)
Local search
Geo-targeted advertising
Mobile- and social-related opportunities (e.g. proximity-based location marketing, check-in services)
Opportunity #3: Local
Key: be relevant (here and now)!
Instead of a Conclusion
Perhaps the most important part of offensive basketball is the part played by each man without the ball.
~ John Woden, Naismith Hall of Fame Coach
One of the most difficult coaching tasks is to teach players to carry out actions that don’t involve the basketball — the magnet of the game.
~ Krause, Meyer & Meyer, Basketball Skills & Drills
Moving without the ball requires you to be adept at starting, stopping, faking, and changing directions. You must have excellent court awareness and vision…
~ Ralph Pim, Winning Basketball
Self-Educate to Survive Succeed!
Perhaps the most important part of offensive basketball is the part played by each man without the ball.
~ John Woden, Naismith Hall of Fame Coach
One of the most difficult coaching tasks is to teach players to carry out actions that don’t involve the basketball — the magnet of the game.
~ Krause, Meyer & Meyer, Basketball Skills & Drills
Moving without the ball requires you to be adept at starting, stopping, faking, and changing directions. You must have excellent court awareness and vision…
~ Ralph Pim, Winning Basketball
Self-Educate to Survive Succeed!
Thankyou!