Is Affiliate Marketing Really Worthwhile - A4U Expo Amsterdam 2009

Is Affiliate Marketing Really Worthwhile?
Matt Bailey
Head of Affiliate
i-level

YES
...if it’s managed correctly

What are we going to talk about?
Context – Why are we asking this question?
Looking past the last click
More than a single channel
Are all sales the same?
Maximising your campaign effectiveness

Who Am I?
Head of Affiliate at i-level
Chair of IAB’s Affiliate Marketing Council
Passionate advocate of performance marketing

Uncertain Climate
Unprecedented Times

How online is doing
Economy shrank 2.9% in Q1 2009
Unemployment up by 29% in the last year
17p in every £ spent online
50% spent online by 2014
Sources: ONS (April 09), National Staistics, IMRG CapGemini e-Retail Sales Index

Performance Marketing in a Recession
Low risk marketing channel
Paying after the money is in the till
Scaleable
LET’S NOT WASTE A GOOD RECESSION

SCRUTINY

What clients want...
Lower cost per sale
More sales
Incremental sales
Better sales

Sale
Sale
The last event
Event type
Display Impression
Display Click
Paid Search
Natural Search
Affiliates
Last Exposure

Sales journeys are complex
Event type
E5
Display Impression
Display Click
E4
Paid Search
Natural Search
Affiliates
E3
E2
E1
Conversion Event
Sale

Evidence for both incremental sales and interception
2. Other->Affiliate
Journeys (-)
1. Affiliate–only
Journeys (+)
3. Affiliate ->Other
Journeys (+)
Sale

What you pay for
Affiliate Only
Other to affiliate
Last click sales

True Value
Affiliate Only
Other to affiliate
True value
Affiliate to other

Determining the worth
100 sales
Last Click Sales
80 sales
Affiliate Only
30
Affiliate to other
20
Other to affiliate
90 sales
True Value

PPC Brand
Price Comparison
Voucher Code
Loyalty/ Cashback
New Technologies
High Traffic/ Portal
True Content
Email

Affiliate types interact in different ways
Event type
Paid Search
Content
Price Comparison
Incentive
Voucher
Other
Share of journey events
Transaction
01 Jan 09 – 04 Mar 09

Breaking out affiliates by category
Display Click
Paid Search
Natural Search
Affiliate Content
Affiliate Cashback
Affiliate Voucher
Sale

What types of activity feeds sales, by type
Display Click
Paid Search
Natural Search
Affiliate Content
Affiliate Cashback
Affiliate Voucher

Clear difference in journey lengths
% Sales
Number of exposures

What does this show?
Different affiliates operate in different ways
They require specific:
Approaches
Marketing collateral
Remuneration models

Can you use affiliates to:
Make people spend more?
Drive new customers?
Stay with you longer?
Buy sooner?

Average basket value

New vs Existing Customers
Where is the brand loyalty, with you or the affiliate?
Would the sale have come to you anyway?
Reward affiliates for driving new customers?

Lifetime Value
Some affiliate models promote switching
Do you measure the lifetime value of sales through different channels?
Should an affiliate be rewarded for driving better customers?

Affiliates convert sales quicker
Sale event type
Display Click
NaturalSearch
Paid Search
Affiliates

Using this information to maximise your campaign effectiveness

Analyse what you are paying affiliates
Remember last click isn’t everything

100 sales
Last Click Sales
80 sales
Affiliate Only
30
Affiliate to other
20
Other to affiliate
90 sales
True Value

100 sales
Last Click Sales
80 sales
Affiliate Only
50 sales
Affiliate to other
20
Other to affiliate
50 sales
True Value

Understand different affiliate types
How do they interact with each other?
Bespoke approach for each one

Can they be used to complement your existing search strategy?
Incremental value or cannibalisation? How do we harness them and achieve our aims?
PPC Affiliates
Cashback and Incentive sites
Do they add incremental value or simply cannibalise other channels?
What offers should we be pushing and how do we retain control?
Voucher Code Sites
Email affiliates
Are you providing them with the right tools to promote you?
How do we stay ahead of the curve whilst protecting ourselves at the same time?
Emerging Technologies
Long Tail Content

How can we use affiliates?

Pull
Push

Capture all traffic looking for your products
Price Comparison
Product based content sites
Brand/Generic PPC
Get your brand on front of online shoppers
Voucher sites
Cashback
Email

EPC = CPA & CTR & OSC
Pay affiliates more

Compelling creative
Strong consumer offers/ voucher codes
Securing good placements on the affiliate site
Deeplinking to specific products
Reducing the customer journey
Easy site to use

Making people spend more

Driving new customers?
Can affiliates be incentivised to drive new customers?
Pay a bonus for new customers
Is it something they can influence?
Does it vary for different affiliate types?

Driving better customers
Do certain affiliates/ affiliate types drive better customers already?
Do merchants measure this?
Would certain affiliates be better incentivised working on a lifetime rev share model?

Aiding conversion
Some (content) affiliates are losing sales
Instead of paying them more, how can we help them convert?
Sale
Sale

Is Affiliate Marketing Worth It?
All marketers are under intense scrutiny
Incredible opportunities for us all

What you need to demonstrate
Affiliates is a key solus channel
You treat affiliate types differently
You understand what different affiliates are delivering for you.
Always be in beta

matt.bailey@i-level.com
twitter.com/mattb811