The key is affiliated marketing, an industry born in the late 90s. A third party, or affiliate, acts as part of a virtual sales team by placing ads and links on their website, which will direct visitors to the home page of an established retailer. Every time that visitor goes on to make a purchase, or another specified transaction, the third party receives a commission. Eighty percent of affiliate programs today use revenue sharing or pay per sale (PPS) as a compensation method, nineteen percent use cost per action (CPA), and the remaining programs use other methods such as cost per click (CPC) or cost per mille (CPM, cost per estimated 1000 views).
Merchant – the charity Networks – the intermediary between the Merchant and the Affiliate Affiliate – third party generating sales; extended sales / acquisition team.
The Affilate and the Merchant contract with the Network, which provides the technology for tracking traffic and commissions and is the payment intermediary.
Digital Window / Affiliate Window is the UK’s largest network (46%); TradeDoubler (15%) and Commission Junction (7%).
Almost half (46%) work full-time in the industry and those working part time have gone down (46% to 36% compared with 2009). 37% of affiliates are 31-40, further 31% are 21-30 29% of them spend over 75% of their working days on affiliate marketing activities Around 18% of UK affiliates will be earning 50-500, however nearly 20% will be earning 1,000 – 5,000 per month from their affiliate activity. Further 10% will generate 5,000 – 10,000 and another 10% - 10,000 to 25,000.
Cashback – Quicdo, TopCashback Comparison – the Meerkats Content / portal Datafeed – usually eCommerce / online shops (Oxfam Unwrapped) Email Paid search – affiliates investing their commissions and specialising in long tail keywords and phrases not used by the merchant Remarketing Voucher sites
Social Media is by far and away the most important area of Affiliate implementation this year, with around 40 looking to increase their Social activities. Mobile Versions of websites are just ahead of Mobile Applications in every country apart from the Netherlands, where it is reversed. 15% of affiliates drive more than 100,000 visitors to merchant’s sites each month
So should you do it? Imagine ordering a pizza or buying shoes online… Forrester’s research : Online buyers visit an average of 2.7 sites while researching a purchase decision. Average number of marketing touches per online order is around 5 (Rimm Kaufman Group RKG) All depends what else you are doing online and offline. PPC, display, TV. How much traffic you are getting? How well good is your website in converting the visitors to donations? How much time you’ve got to manage relationships with your best affiliates? Ongoing debate why pay for something you already rank highly for? Back to basics – how hard is your website working? How well are you converting all that extra traffic? At our busiest period conversion rates more than double. Switch it on and off Works really well with PPC, SEO and display (especially when DRTV’s on). Blended CPA across all 3 is about 50% of Display on its own.
Merchants can choose from two different types of affiliate management solutions: standalone software or hosted services, typically called affiliate networks. Payouts to affiliates or publishers are either made by the networks on behalf of the merchant, by the network, consolidated across all merchants where the publisher has a relationship with and earned commissions or directly by the merchant itself. Successful affiliate programs require significant work and maintenance and take time to get going (6 months). Cost – varies – the biggest UK Network – set-up £2,500 + £250 monthly fees. Additionally – 30% of commission Depending on the your priorities – it can be lead generation (to convert using email, TF or DM); donations or trading; events signups Commission levels and incentivising - £30 for a DD; 10% cash Validation – 2 – 120 days Ts& Cs – paid search Attribution models – first vs last touch models. Un55% online buyers always check for deals before purchasing and 32% typically begin shopping on affiliate sites (Give as You Live or Quidco). 57% of online buyers are more likely to purchase a product found on multiple sites than on a retailer’s site alone. Visitors to coupon websites alone spent 13% more on average than the typical online buyer.
Successful affiliate programs require significant work and maintenance
Ask not what your affiliate can do for you, but what you can do for your affiliate… Google does not like lazy and spammy affiliates and will punish them, however as we know Google is an elephant and sometimes hurts the little ants, who are just minding their own business and working hard. Recent search algorithm updates have been particularly painful for affiliates. Astonishingly, nearly 40% of Affiliates are concerned about de‐duplication policies. Within those concerned, over 35% believe that between 10-‐25% of revenue is lost due to the Advertiser’s de-duplication policies.
UK – text links, banners, data feeds; Spain – banners, generic text links, voucher feeds
UK – text links, banners, data feeds; Spain – banners, generic text links, voucher feeds Best merchant – Bets agency – 7thingsmedia – Ted Baker – 1317% affiliate sales increase in a year Guide Dogs – introduction of an incentive – 500% conversions signup At the beginnig there were banners… since those prehistoric times Helen Southgate, Sky, newly appointed Head of Affiliate Marketing Council Chair at the IAB
Affiliates4u has been providing Performance Marketing insight to over 70,000 members for over 10 years.
Making an affiliate programme work for your charity - Karolina McIlroy - Guide Dogs
Performance marketing –how to make affiliates work for you IOF Digital Fundraising Conference 12th September 2012 Karolina McIlroy, Guide Dogs
Agenda What is affiliate marketing and how can it help you? Getting started and growing your programme Critical success factors and common pitfalls Hands on approach vs. agency management What can we learn from the commercial sector?
So what is AM / PM? What is affiliate / performance marketing and how it can help you get new donors? –The most measurable, trackable, reliable advertising model, where advertiser spend is based only on results –A no-speculation direct response method for driving business online –Fastest growing advertising model because it’s high- return and low-risk –An effective way to get hundreds of thousands of sites promoting your propositionSource: http://performancemarketingassociation.com/
Your own affiliate programme Getting started – Choosing your technology / networks – Cost - Set-up and on-going fees / charges – Objectives, KPIs and strategies Last click vs. attribution models – Boundaries – terms and conditions / commissions / rules – Managing - agency or in-house? – Content is king 20 % o f G ui d Dogs on de signup line genera s are ted affilia by tes
What matters to affiliates Most important factors when working with a merchant and what would convince an affiliate to work harder for a merchant • Commission levels and tiers • Conversion rate levels • Cookie period Guide Dogs C • Quality of datafeeds up from R is 3. last ye 7% Action ar 21% • Affiliate incentives and aid C competitions Oxf R – 5.4% fam C CRUK R – 6.28 CR – 1 % .9 9 % - 8.33%
What works and what doesn’t 90% of G ud conversio i e Dogs as a resulns happen t of a text link refer ralSource: http://www.affiliates4u.com/media/uploads/docs/A4u_European_Landscape_Report_2011.pdf