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Affiliate Marketing for Software Companies
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Affiliate Marketing for Software Companies

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Affiliate marketing is a powerful customer acquisition mechanism that can have a very high ROI. It's been successfully used by a number of business-to-business (B2B) and business-to-consumer (B2C)......

Affiliate marketing is a powerful customer acquisition mechanism that can have a very high ROI. It's been successfully used by a number of business-to-business (B2B) and business-to-consumer (B2C) software companies offering downloadable products as well as online services / Software as a Service (SaaS) / cloud solutions. These companies include Microsoft, SAP, Adobe, Roxio, Symantec, InfusionSoft, McAffee and thousands of others. The presentation covers the following topics:

Why you need to consider affiliate marketing
What it is and how it works
Networks specialising in software / digital goods
Affiliate marketing for SaaS / subscriptions
How B2B and B2C affiliate marketing are different
Attribution, legal, technical and other challenges
Microsoft and InfusionSoft case studies
How to get started

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  • 1. Affiliate Marketing for Software Companies Andrei Link 4 February 2014
  • 2. Quiz Q. Affiliate marketing was invented by Amazon’s Jeff Bezos after a conversation at a cocktail party (a) Right (b) Wrong A. (b) - wrong. CDNow, PC Flowers & Gifts, and Cybererotica are generally considered to have invented affiliate marketing around 1994, two years before Amazon (but AMZN has the patent!) Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
  • 3. What is Affiliate Marketing Anyway? Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
  • 4. for Today • • • • • • • • • Why you need to consider affiliate marketing What it is and how it works Networks specialising in software / digital goods Affiliate marketing for SaaS / subscriptions How B2B and B2C affiliate marketing are different Attribution, legal, technical and other challenges Microsoft and InfusionSoft case studies How to get started Any affiliate marketers in the room? Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
  • 5. A Quick Intro • 1991: Moved from the Ukraine • 1991 – 2012: Trimble – Application Programmer, Project Leader, Corporate E-Business Manager, Marketing Manager, Product Manager • Since 2012: Xtend-Life – Product Manager, Channel & Product Development Manager (affiliate and reseller programs + NPD) Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
  • 6. Why You Should Consider Affiliate Marketing • Possibly, one of the best customer acquisition tools with a high ROI • Relatively easy to set up and scale up • Can be outsourced • Used by many successful software and online services companies, B2B and B2C Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
  • 7. Network Programs and In-House Programs • A network-based affiliate program: – – – – Uses an affiliate network linking many merchants with many affiliates Advanced software platform Tracking, reporting, payments, matchmaking, education Three “must know” networks for software businesses: • An in-house affiliate program – – – – – Has only one merchant – you! Uses shopping cart plugins, off-the shelf software, SaaS Direct relationship, increased control & flexibility You don’t need to pay the network fees Not an easy option for a young business: affiliates prefer to deal with trusted and established networks Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
  • 8. • A sophisticated platform for selling software online including SaaS and Cloud solutions: “Any Channel, Any Model, Any Market” • A 40,000+ strong software focused affiliate network. • 1,617 vendors as of last week • Automatic integration with any eCommerce platform (claimed) • Outsourced Program Management offered (3 levels of service) • www.avangate.com/products/affiliate-network/ www.avangate.com/affiliates/ Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
  • 9. • A sales and marketing platform • A network with 100,000 affiliates • “30,000 transactions a day across more than 190 countries” (claimed) • Marketplace search for “software” last week: – 1800 hits for one-time billing – 482 hits for recurring billing • www.clickbank.com Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
  • 10. • Over the years, has absorbed Regnow, ShareIt, Swreg, other software ecommerce companies • Some of acquired / integrated companies have come with their own affiliate networks • Claims to have partnerships with leading affiliate networks globally • Offers outsourced program management • www.digitalriver.com www.mycommerce.com www.onenetworkdirect.com Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
  • 11. Quiz Q. “Affiliate RAP” refers to: (a) Music popular with many affiliates (b) Affiliate Program Managers’ activities (c) The “Rapid Action Profits” sales solution for affiliates A. (b). Affiliate RAP is an abbreviation for Affiliate Recruitment, Activation and Policing Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
  • 12. Managing an Affiliate Program Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
  • 13. Outsourced Program Management • Pros – Experience – Connections – No AM training reqd • Cons – Can be difficult to get the payment model right (usually, retainer + performance bonus) – Product / service training required – Continuity uncertain Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
  • 14. Affiliate Marketing B2C B2B Prevalent payment models Pay per sale Pay per lead, pay per sale 3rd party network importance High Low Long-term relationship with affiliates Depends Required Affiliate support requirements Low to medium Medium to high Outsourced program management Feasible Questionable Integration with offline marketing Low importance Medium to high importance Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
  • 15. Affiliate Marketing for SaaS / Subscriptions • Key issue: aligning commission with revenues • Metaio on Avangate • Other possible payment models: higher commission rates on high value sales; residual commissions after the first sale, rewards for customer upgrades, paying for both leads and sales, etc • Adobe: 100% of 1st mth of Adobe Creative Cloud iContact: $5 / lead (free trial) + $125 / sale (paid account) Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
  • 16. Quiz Q. In affiliate marketing, “attribution” refers to: (a) assigning a value to a marketing activity based on desired outcome (b) processes by which individuals explain the causes of behavior and events (c) a Pirate Bay affiliates’ saying “give attribution to avoid retribution” A. (a). But (c) is pretty close too… Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
  • 17. What is Attribution and Why It’s Important • • • • • Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014 First Click Wins Last Click Wins Multi-channel attribution The model you want to use is a key selection criterion for a public affiliate network (CJ vs ShareASale) or private network software (Post Affiliate Pro) Click-stream and referral data analysis tools: TagMan, AvantMetrics
  • 18. Brand Protection and Reputation Management • Brand protection – – – – – Domains Trademarks Messaging Product claims Passing off • Reputation management – – – – – Affiliates’ sites Affiliate forums and events Social media Spam “Scams, warnings and truths” • Robust agreement (incl. social media policy, affiliate content and promotion rules) and enforcement, tools (BrandVerity) Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
  • 19. Quiz Q. “Affiliate Nexus” refers to: (a) Software for process integration often used by affiliate marketers (b) A line of Google-branded mobile devices popular with affiliate marketers and affiliates (c) A tax law concerned with local tax collection by out-of-state retailers A. (c). Affiliate nexus, a.k.a. click-through nexus, is a hot legal issue affecting many affiliate marketers and tens of thousands of affiliates Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
  • 20. The Affiliate Nexus Battleground Source: Commission Junction, Dec. 2013 Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
  • 21. Legal and Technical Issues • Legal – Affiliate nexus – Affiliate disclosure • Technical – Cookie-related – Tracking integration – Linking initial and repeat purchases to affiliate referrals – Identifying affiliate sites and sources of traffic Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
  • 22. Case Study • Microsoft Store Affiliate Program – Hardware (PCs, tablets, consoles, accessories) and Software (games, Windows 8, Office, Visual Studio, Streets & Trips) – Two affiliate networks: LinkShare, oneNetworkDirect (Digital River) – Up to 10% commission • Skype Affiliate Program – Skype Credit, Skype Subscriptions, Skype Premium, Online Number – 25% commission – Three affiliate networks: Commission Junction (worldwide), Affiliate Window (US & CA), TradeDoubler (UK & RU) • MS Home Use Program – Office Pro, Visio Premium, MS Project Pro – CJ, flat USD $1.50 commission • MS Windows Azure – CJ: USD $15 / lead (90 day trial signup) Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
  • 23. Case Study • A marketing automation and sales SaaS solution for SMBs with 19,000 customers / 67,000 users • Three tier commission structure: Silver, Gold, Platinum (up to $1,500 per sale). • Commissions are NOT paid on subscriptions, only on the KickStart training package sale • In addition to banners, other digital assets, affiliates have a mechanism to log leads coming from offline sources • In-house program, possibly run on the InfusionSoft’s affiliate module Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
  • 24. How to Get Started (as a Vendor, not Affiliate) • Do a readiness check: 1. 2. 3. 4. • • • • • Can you sell beyond early adopters? Can your site “close the sale”? Is your mission-critical IP protected? Can you estimate your conversion rates, customer acquisition costs and lifetime values by source / channel? Clarify your business goals and constraints Get a mentor Join several networks as an affiliate Explore the attribution model issue Check if the nexus issue is relevant Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
  • 25. How to Get Started - 2 • Short-list and evaluate relevant networks (Avangate, ClickBank, Digital River, other) • Evaluate program options and make the choice Affiliate Network Program In-house Program Management Affiliate Network Program Outsourced Program Management • • • • • In-house Program In-house Program Management In-house Program Outsourced Program Management Design payment model and commission structure Prepare program policies and legal agreements Develop creative assets Develop the program launch & promotion plan Launch it, then inspect and adapt  Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
  • 26. Summary • Affiliate marketing, despite its challenges, can be a very powerful marketing strategy for your software business • If you have not already done so, take out some time of your busy schedule to consider it • Feel free to ask questions now or later Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014