Affiliate marketing: the bleeding edge
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Affiliate marketing: the bleeding edge



Speaker session from Affiliate Summit East 2010 - A practical look at innovations in affiliate marketing driving the industry forward. Framing the discussion around the 'eras' of affiliate marketing ...

Speaker session from Affiliate Summit East 2010 - A practical look at innovations in affiliate marketing driving the industry forward. Framing the discussion around the 'eras' of affiliate marketing in the past, present and future. Slightly tongue in cheek.



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    Affiliate marketing: the bleeding edge Affiliate marketing: the bleeding edge Presentation Transcript

    • Affiliate Summit East 2010 Innovate! New Exciting Applications of Affiliate Marketing Joe Stepniewski Co-Founder, Skimlinks
    • What, who, when?
    • 1934: Theorie der Wirtschaftlichen Entwicklung , Joseph Schumpeter defined economic innovation…
      • A new ‘good ’ consumers aren’t familiar with
      • A better quality of an existing product/service
      • A new method of production or packaging of something
      • Finding a totally new market
      Innovation defined The Theory of Economic Development, 1934
      • Entrepreneurs, or wild human spirits (he coined Unternehmergeist - German for entrepreneur-spirit)
      Where does innovation come from?
    • 1934: Theorie der Wirtschaftlichen Entwicklung , Joseph Schumpeter defined economic innovation… OK – We got the wild spirits bit sorted
      • Companies with resources to invest in R&D
      Where does innovation come from?
      • Limited marketing reach
      • Limited sources of traffic
      • Limited media or space
      Innovation often sparks from limited resources or limited environment
    • Affiliate marketing = entrepreneurs + savvy retailers + limited resources = consistent innovation Photo credit: Shawn Collins
    • The Innovation Landscape
    • Innovation and adoption are increasing the rate of growth of affiliate spending US Affiliate Marketing spending 1994-2016 $bn $2bn 16% p.a. $7bn 20+% p.a.?
    • The eras of affiliate marketing Wild west era Domestication era Affilination era US Affiliate Marketing spending 1994-2016 Ubiquity era $bn
    • The Wild West: Ruled by cowboys
    • Innovation came from the adult industry
      • Cybererotica: 1994
      • 1996
      • Linkshare & Be Free: 1996
      • Shawn Collins: 1997
      • Commission Junction: 1998
      Wild West Era (WWE)
      • Choice of CPC, CPA and CPL programs
      • Geo-targeted banners
      • 500,000+ affiliates
      • $250m revenues, 40% annual growth
      • Still only do checks to non US affiliates 
      Adult Friend Finder’s innovation: helping establish the affiliate model Source: Business 2.0 Magazine, Adult Friend Finder
    • Domestication: Taming the beast
      • Explosive growth: ecommerce, new sectors
      • Innovations challenged by rules & restrictions
      • New innovation grows as a result
      Domestication Era (DE) 2001-2008
      • PPC affiliates
      • Squeeze pages / email affiliates
      • Cashback / Rewards
      • Coupon codes
      • Data feeds
      DE Innovations: 2001-2008
      • Affiliates penalized in organic/PPC listings
      • Looked for alternative traffic sources
      • Now
      • Coupon code sites sit at end of purchase funnel
      • Rewards sites rely on viral traffic
      • Email affiliates just need to capture your address
      Search traffic restrictions drove innovation
    • New innovations displace old revenue streams Affiliate Window’s affiliate revenue sources 2005-2010
      • Controversial practices on coupon codes
        • ‘Click to reveal’
        • Expired coupon codes
        • Poaching exclusive codes
      • Industry response through IAB Best Practice Guidelines
      Innovation must not run unchecked
      • Hides or displays code box based on referring URL
      • Stops sales leakage for non-coupon code sites
      • Control exclusive deals
      Merchant innovation in response to coupon code challenges
    • Ubiquity: Affiliates are everywhere
      • Tipping point of major brands with programs
      • Recognizable affiliate consumer brands
      • Intersection with tech startups
      • Innovation explosion
      • Social media integration
      Ubiquity Era (UE) 2008-2013
    • Major brands have affiliate programs
      • Over 20,000 affiliate programs in 2010
    • Consumers use affiliate sites every day (and understand the model)
      • Startups see appeal of affiliate marketing
      • Low barriers to entry
      • No need for ad-units
      • Social activity can drive purchases
      Affiliate marketing, meet my friend: tech startup
    • 10 innovations improving the purchasing funnel
    • Advertising
    • Merchants helping with distribution of data feeds through ad-units
      • 300x250 (MPU) ad-unit easy to add to an affiliate site
      • Pre-load particular products/categories
      • Targeting a visitor with an ad for a product that has been previously viewed or placed in cart
      • Retargeted customers are 4x more likely to convert than new customers
      • Affiliates can recognize abandoned shopping cart and offer a discount, coupon or bundle deal
      Retargeting in affiliate marketing Source:
    • Retargeting with reward model driven by CPA Source: Free for advertiser Post-impression cookie CPA on sale
      • Post-impression/post-view cookie, dropped after 2 seconds
      • Potential clash as merchant may de-dupe across affiliate channel
      • Networks have indicated click cookie would probably supersede impression cookie
      PI Cookies carefully added to the marketing mix
    • Social Media
      • Embed a Dominos widget easily
      • Available for Facebook, Myspace & more
      Social media embedding brings affiliate marketing to masses
      • Simple interface
      • Add ID via signup to Affiliate Window
      Interfaces adapted for ‘micro-affiliates’
      • Blippy shares your purchase-stream
      • Automatically based on merchant or bank statement
      • provides similar service
      Purchase sharing unearths products I care about
      • Thingbuzz tracks ‘trending products’ across Twitter
      Crowdsource what’s hot right now
    • Product Discovery
    • How do ‘real people’ search or discover products?
    • Mashup datafeeds with apps to create value
      • Official site limited in search capability
      • Merchant & affiliate worked together to identify the area of weakness
      • Affiliate site sits alongside official listing in PPC space
      • Augments official offering with destination-based search
      Fast-track innovation with affiliate merchant collaboration
      • Popshops’ storefronts and widgets
      • 60m products to configure into a storefront
      Configure specific storefronts for groups of products or themes
    • On-page monetization
      • Product references linked to top performing merchant
      • Geo-targeted link based on visitor
      • Pop-up price product info or price comparison
      Automatically link keywords to affiliate links
    • Associate products right at the image source
    • Affilination: The future of affiliate marketing
      • Social media dominance
      • Microaffiliates
      • Micropayments
      • Real-time data
      • Multi-attribution
      Affilination Era (AE) 2013-?
      • Activity stream will be affiliated
      • Foursquare linked to physical purchases, Facebook aggregates online purchases (through Blippy etc)
      • Content sites will still benefit from generating purchase-intent (discovery, reviews)
      Social media a dominating influence
      • Everyone can be an affiliate
      • Challenge of low earnings threshold mitigated with virtual currency/credits on social networks
      • Micropayments e.g. electronic cash solutions will make it more compelling and compatible with offline
      Microaffiliates & Micropayments
      • Micro-trends – hot product sales by hour or day
      • ‘ Pre-purchase’ click data – most popular products being viewed right now
      • Purchasing clusters could drive further group activity – Groupon style
      • Requires product-level tracking at affiliate networks (Amazon does it today)
      • Instant reward notification
      Real-time data will redefine ‘impulse buys’
      • Watch Eat, Pray, Love the movie
      • Buy the fragrance, the eReader, and pillowcases
      Merchandizing will continue to drive product association to film, music, books
    • Redefinition of affiliate marketing
      • Referral marketing or “Referratization”
      • Not the process of turning into a furry animal
    • Referratization
      • The tracking and reward of every individual part of a referral; whereby referrals are driving the majority of online purchases
    • Innnovation will drive this industry forward
      • Looking at the past: we can see the cycle of innovation, challenges and new innovation
      • Looking at today: new innovations expanding the scope of affiliate marketing
      • Looking at the future: Wild West 2.0 as affiliate marketing goes mass-market
    • Takeaway tip: Read “The Referral Engine”
      Yes this is an affiliate link
      • Contact
      • @digijoe
      • Thanks to
      • Kevin Edwards – Affiliate Window
      • Matt Bailey – 7ThingsMedia
      Any questions?