Sme Tech Summit Presentation Viva9 V1.1

Performance Marketing Using affiliates and other online techniques to drive revenue and business Matt Bateman MD Viva9

Performance/Affiliate Marketing in Australia
In the beginning
How does it work?
Different models
6 Simple rules of Performance marketing
Relationship with search
Arbitrage
Looking into the crystal ball

In the beginning...

Performance Marketing Model

Early Performance Models Focused on eCommerce

Traditional Cost Per Sale Model
PROS
Guaranteed ‘can’t lose’ model for clients
End Consumer pays no more – commission included in sale price
Easy to explain and sell
‘ Environment’ less of a concern
CONS
Lower Margin
Lack of sophisticated publishers
Traffic becoming commoditised
Sometimes hard to drive volume
Less good for high-value products
Market Being driven bottom-up

Financial Model

Cost Per Lead/Cost Per Acquisition Models
Cost Per Lead:
Qualified Lead into a database
Phone leads
Direct email leads
Can be as simple as First Name, Last Name, Email Address
Or as complex as ’25+ men in Rural NSW who don’t have Austar’
One is obviously going to cost more than the other, as there is less incidence in the population and it’s harder to find them
Cost Per Acquisition - usually higher value – Credit Cards, Insurance customers, telco customers

Performance-Marketing

Performance Marketing Growth
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 driven by Search
Lower barrier to entry to the market
More choice for advertisers, but also more confusion

Market by Segment in Australia – Affiliate in 2008

2009 Affiliate Market Defined

IAB Report – Total Online Advertising

The Tail is no longer the tail – ‘affiliates’ are becoming sophisticated

The Cosmetics Club

Finance

6 Rules for performance marketing

1. WIN-WIN-WIN
Publishers Care about EPC and ECPM
In general categories, anything under $0.40c EPC is marginal
In Credit Cards, the benchmark EPC $3.50 up to $10
Networks and aggregators need volume and consistency
Clients want the performance marketing promise – ‘only pay if it works’
It only works if it is genuinely a partnership between publisher/network/advertiser

Rule no. 2 - 3Ts and an A
Trust
Transparency
Truth
Accountability
Source: Lee Hopkins 2009 – Better Communication Results

Rule 3 - 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
Is it right for the performance channel

Rule 4 Optimisation
Landing pages
Test, Test and Test
Good usability principles
Continue to test
Easy ordering process and follow up
Reviews
Change creative regularly
Datafeeds
IF IT WORKS IN SEARCH, IT WORKS

Rule 5 Work with genuine partners
Never work with someone who can’t tell you where the traffic is coming from
Get educated
Get references
Affiliate/Performance Marketing is about doing lots of little things right
It is not easy, but can be very rewarding

6 – Ensure you have rules around Search
Understand what you’re buying in Search
Search is crucially important to any performance campaign, but you need to understand what you’re buying
Does last click win?
Are you optimising properly?
Work with large publishers and have rules around what they can search on – closed networks

Dos and Don’ts of working with networks
DON’Ts
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 large publishers
DO Work with a transparent network

Everybody Wants CPS
Wouldn’t it be great if you could reduce everything to a cost-per-sale?
Key Question: ‘How well do my members know your brand/product?’
Experience shows that the 3 RD COMMUNICATION has huge payout on eDM
WORK TOWARDS ECPS

Nightmares for a performance marketer
The campaign does not convert
There is limitless budget, but we can’t fill it
We simply cannot find the audience the customer is after (often because it has been over-complicated)

The power of email and databases

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

Lifecycle of an eDM customer Initial Offer ‘ Chance to win’ ‘ Register for free’ $3 CPL un-targeted Profile Customer Commercial Rel’ship Continue conversation via Targeted eDM Build audiences Market to them Achieve end result – customer that buys

Models are changing
Arbitrage on its own doesn’t work
Most networks are surviving by re-selling clicks and/or impressions
You need:
Technology – eg Behavioural
Profiled Audiences and ways to reach them
Control over your own inventory
Add value on the strategy and planning side of things and are acting as virtual agencies
Agencies need to be careful that if they don’t understand performance models, they might find themselves out of the conversation

A comment on E-Commerce in Australia

A comment on E-Commerce in Australia
Major Retailers are beginning to migrate online
Harveys
Bing Lee
Myer
David Jones
Have all made some announcement about E-Commerce in the last 6 months
So far it has been a bottom-up push to E-Commerce and online sales
The traditional advertising models won’t work
Are large retailers ready to adapt?

2010?
Expect continued growth in the performance sector
There will be consolidation/changed business models
The year E-Commerce grows up in Oz?
What impact social?
Jury still out on mobile advertising

Matt Bateman
MD – Viva9
Email: [email_address]
Twitter: viva9australia;
@matthieub
Please don’t forget www.movember.com.au
And if you get a chance, check out @kurtfearnley
Contact:

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 Case Studies

The power of email

Crazy Sales

Sme Tech Summit Presentation Viva9 V1.1

by Matt Bateman on Nov 29, 2009

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