Affiliate Marketing: A Better Alternative?

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In today’s economy, everyone is looking for new sources of revenue and new ways to grow. For mid-long tail publishers, affiliate marketing could be the perfect fit. In 2007, web proprietors paid out several billions of dollars to affiliates globally, yet that’s only the tip of the iceberg for this widely untapped medium. As the recession squeezes ad and marketing budgets, many businesses are committing more resources to performance-based programs like affiliate marketing, making this an opportune time for savvy publishers to join the game. At the same time, consumers are spending more time online researching products and pricing, growing savvy to ignoring the often questionable network ads shown to them on their favorite blogs. This leaves the door wide open for high-quality publishers to better engage and inspire trust in their customers through affiliate marketing. On this panel, experienced affiliates and advertisers will discuss the ins and outs of affiliate marketing, highlight the key areas of opportunity and offer tips and best practices to help new affiliates achieve maximum ROI.

MODERATOR:
• Steve Schaffer, Founder and CEO, Offers.com

PANELISTS:
• Will Martin-Gill, Director, eBay Partner Network
• Peter Bordes, CEO, MediaTrust
• Shawn Collins, Affiliate, Blogger and Co-Founder, Affiliate Summit
• Brook Schaaf, Affiliate and CEO, Schaaf Consulting
• Gil Abir, VP, Corporate Partnerships, Payoneer, Inc.

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  • an excellent panel and presentation at the adtech CRS conference in NYC 2009. Affiliate performance marketing is growing very rapidly and content publishers are king!
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  • Ask about Audience makeup: Affiliates/Publishers Merchant/Advertiser Networks Industry Analysts Press or Other Media Other Also ask – how long in the industry? Less than 1 year, 1-3, 3-5, more than 5 years?
  • Performance marketing is a comprehensive term that refers to advertising programs in which marketing partners are paid on the performance of their advertising programs. Advertisers (or merchants) pay their performance advertising partners (also known as affiliates or publishers) when an action is completed, such as a sale or completion of a lead.
  • Most in the industry would say this is a low estimate. MarketingSherpa pegged the global industry at $6B in 2007. We think we’re somewhere in between.
  • merchant and third party tools like customizable creatives, APIs and automated bidding tools make it easy to add affiliate links to your revenue generating mix
  • Flexibility (creatives, widgets, APIs, etc.) Direct relationship with advertisers, even top-tier advertisers (and no insertion orders) More control over the types of ads you display on your site (as opposed to with an ad network), meaning more Relevance to your content, Credibility with your audience
  • Affiliate Marketing: A Better Alternative?

    1. 1. Affiliate Marketing: A Better Alternative? Content Revenue Strategies NY November 5 th , 2009 Moderator: Steve Schaffer
    2. 2. Session Agenda <ul><li>Questions About the Audience </li></ul><ul><li>Panel Introductions </li></ul><ul><li>Performance Marketing Overview </li></ul><ul><li>Panel Discussion -- I will Ask the First Few Questions </li></ul><ul><li>Questions From the Audience </li></ul><ul><li>Panel Discussion – Questions of each other </li></ul>11/5/2009
    3. 3. Our Panel Steve Schaffer Founder of Vertive and publisher of Offers.com @SteveSchaffer Brook Schaaf Founder of Schaaf Consulting @BrookSchaaf Shawn Collins Co-Founder of Affiliate Summit @AffiliateTip Peter Bordes CEO of MediaTrust @MediaTrustPete Will Martin-Gill Director, Internet Marketing at eBay, Inc. @eBay_affiliates 11/5/2009 Gil Abir VP, Corporate Partnerships, Payoneer, Inc.
    4. 4. What is Affiliate Marketing? <ul><li>Three primary forms of online marketing </li></ul><ul><ul><li>Pay per impression </li></ul></ul><ul><ul><li>Pay per click </li></ul></ul><ul><ul><li>Pay for performance (sales or leads) </li></ul></ul><ul><li>For this panel we are focusing on Pay for Performance </li></ul><ul><ul><li>Also called Performance Marketing or Affiliate Marketing </li></ul></ul>11/5/2009
    5. 5. Publisher Business Models <ul><li>Direct-linking affiliates (Search & Ad Networks) </li></ul><ul><li>Niche sites and blogs </li></ul><ul><li>Coupon and deal sites </li></ul><ul><li>Cash back or points </li></ul>11/5/2009
    6. 6. Three Main Types of Actions Merchant pays ~$25 for a customer who is worth ~$50 Per lead fee Form or application Loans, insurance, car, free trial Lead Merchant pays a commission on the transaction (~3-10%) Percent of the sale (commission) Retail/Service Gifts, shoes, electronics, travel Sale Merchant pays a percent of the value of initial sale or Pays a predetermined bounty often based on the estimated lifetime value Pay-per-sale or revenue share Account/Subscription Credit cards, subscriptions, memberships New Customer Payment Details Payment Method Types of Offers Transaction Type 11/5/2009
    7. 7. How Big is the Industry? According to one source : Source: Forrester Research, Inc . 11/5/2009
    8. 8. U.S. Affiliate Landscape This is just 25% of ONE network’s (LinkShare) affiliate universe! 11/5/2009
    9. 9. Why Such Rapid Growth? Measurable, Performance-based Spend Revenue ROI+ for merchants, $$$ for publishers More consumers looking online for info, deals New tools are making it easier to implement 11/5/2009
    10. 10. Why Publishers Like Affiliate Marketing <ul><li>Performance model pays publishers for the quality of their work </li></ul><ul><li>More flexibility for ad integration, adding to a publisher’s content </li></ul><ul><li>Connect directly with top-tier advertisers, no insertion orders required </li></ul><ul><li>More control over the ads displayed </li></ul>11/5/2009
    11. 11. What We Hear 11/5/2009 “ Many publishers are reporting between a 10 to 12% increase in payouts on select non-premium inventory when using affiliate marketing vs. CPC.  CPM-based publishers are reporting similar increases on the same type of inventory.” -- Mike Oulette, Director, Publisher Development, Commission Junction
    12. 12. Example: Spadout.com 11/5/2009 The keyword “gloves” takes the reader to a page featuring gloves on sale – each glove listing is an affiliate link “ Our audience leaves Spadout knowing exactly what they want to buy, where they want to buy it, and confident they are getting a fair price. This creates high converting traffic that can out-perform other websites’ revenue.” Mark Silliman, Spadout.com “ Since we became free of untargeted advertising, our revenue has increased and we're 100% on mission: take readers and make high, fast converting shoppers.&quot; 
    13. 13. Example: ShopWiki.com 11/5/2009 “ Performance based advertising allowed us to take on the appropriate risk (instead of our advertisers), so we could find innovative ways of putting information on our site that would optimize our yield and still deliver high quality traffic.” James Keating, ShopWiki.com “ With performance based advertising, consumers vote with their dollars as to how much they like a merchant. We can put those advertisers at the top of the list so consumers find them faster and they convert faster. “ A click on the “shoes” link takes the consumer to a buying guide - ShopWiki is educating the consumer and moving them closer to a sale. Clicking on “boots” reveals boots on sale from popular merchants that have affiliate relationships with ShopWiki
    14. 14. Example: TopDatingTips .com 11/5/2009 Content site uses both contextual ads and affiliate links
    15. 15. Where Can I Learn More? 11/5/2009
    16. 16. Questions for Panel 11/5/2009

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