Online Retailer Presentation - August 2009

Affiliate Marketing Online Retailer August 2009 Matt Bateman

Agenda

Affiliate Marketing explained

The Australian Marketplace

Why do you need an affiliate program?

Network vs individual affiliates

Rules for building a successful affiliate marketing program

Case Studies – success in online retailing

Let’s start with a definition

Affiliate Marketing is:

Revenue sharing between online advertisers/merchants and online publishers/salespeople, whereby compensation is based on performance measures, typically in the form of sales, clicks, registrations, or a hybrid model.

In the beginning...Amazon Affiliate Program

Affiliate Network

Affiliate marketing in Australia CPA RETAIL/CPS CPC/CPL SEARCH – SEO AND PPC 10 10 10 10 Quality Volume

Performance Marketing

Natural decentralization of Ad Spend online

Increasing number of Ad spend going to Search, Ad Networks, and Performance/Affiliate

‘ Portal’ strategies now being replaced by:

Ad Networks (AdConion, Drive PM, 3Di)

Ad Exchanges

Affiliate networks

Diversified Performance strategies

Affiliate Marketing & online retailers – foundation principles

Affiliate Marketing Principles

Low-risk advertising - pay commission on a sale, rather than the click at a guaranteed % commission rate

Get access to a range of Web sites for advertising rather than having a number of individual relationships

Get centralised tracking and management of creative

Some Basic Rules

What can you afford to pay to acquire a customer ?

The margin available is absolutely key, and is different across categories

Travel and Whitgoods can start @2-5%

Online Florists range is from 10-15%

Factor in lifetime value of a customer and likelihood of repeat business

Err on the generous side for affiliates

3Ts and an A

Trust

Transparency

Truth

Accountability

Source: Lee Hopkins 2009 – Better Communication Results

Remember the 4 Ps

Price

Test, niche, less than offline

Place

Where are your customers? - Search, affiliates, newsletters, social

Promotion

FREE works

WIN works

Recommendations work

Special offers work – with clients and affiliates

Product

Make sure you shop yourself, keep developing - UVP

Is your product right for the affiliate channel?

Does your product suit online sales?

Have you got a reasonable margin, so that you can pay a commission that will motivate a publisher to run your ads, and feature your products on your site?

Is it relatively commoditised

UVP – Unique Value Proposition

The Amazon UVP has expanded

Amazon Tools

Amazon Ctd

Optimise your site

Landing pages

Test, Test and Test

Good usability principles

Continue to test

Easy ordering process and follow up

Reviews

Change creative regularly

Datafeeds

Give Great Customer Service

There is no reason online customer service shouldn’t match that of bricks and mortar retailers

With Twitter, IM, IVR and the plain old telephone, there is no excuse not to give good customer service

Work with genuine partners

Never work with someone who can’t tell you where the traffic is coming from

Never use a Search agency who won’t tell you what keywords they’re using

Get educated

Get references

Be engaged

Affiliate Marketing is about doing lots of little things right

It is not easy, but can be very rewarding

You need to be on top of your reports and have a relationship with your partners

Analytics

Rules around Search

Understand what you’re buying in Search

Search is crucially important to any eTailer, but you need to understand what you’re buying

Does last click win?

Are you optimising properly?

Using Super-affiliates and rule around what they can search on – closed networks

Work with Super affiliates

Dos and Don’ts of working with networks

DON’Ts

DON’T sign an exclusive contract – it is advertising, you should have choices

DON’T let your search provider run your affiliate program

DON’T ‘set and forget’

DON’T work with a network that isn’t transparent and won’t return calls

DOs

Do trial different networks

But, have clear rules in place

DO Have clear metrics in place – understand what success looks like

DO Establish a relationship with super-affiliates

DO Work with a transparent network

Don’t underestimate the power of email

Pareto Principle – don’t always hunt new customers

Relevant email communications work – newletters, special offers

Test building an external database on a Cost-Per-Lead basis

Use professional email tools like Campaign Master – www.campaignmaster.com.au

Any money spent will be a huge saving downstream

The power of email

What does an affiliate publisher look like?

A comment on E-Commerce in Australia

Where are the major retailers online?

How do we get them to engage online?

The Avis model...

New revenue streams – Facebook Advertising as a traffic driver

200 apps

In 1 weekend

18 Apps for

platinum cards in one week

CASE STUDIES

Strawberrynet – Sales Campaign Objective – To drive sales of women’s cosmetics and men’s grooming products Delivery Channel – C ombination of targeted eDM, banner placement and search, through s elected affiliates within the Viva9 network. Affiliates were paid on a Commission basis based on sales. Results – Achieved in excess of $1 million in sales on a monthly basis Campaign Examples