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Affiliate Marketing Basics

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  • 1. Affiliate Marketing
    David Herscott
    Managing Partner, NetX
    @dherscott
    6/14/2011
  • 2. AFFILIATE MARKETING
    Warm up
    What is it
    Industry trends
    Top do’s
    Top don’ts
  • 3. WARM UP
    WARM UP
  • 4. AFFILIATE MARKETING OVERVIEW
    WHAT?
  • 5. WHO?
    More than 20,000 brands have affiliate programs
  • 6. MARKET SIZE
    US affiliate revenue: larger than video, social & mobile combined
    Forrester 2009
  • 7. THE SKINNY
    About 300,000 “active” affiliates in the US
    About 30,000 affiliates drive the bulk of the sales in the industry
    About 3,000 affiliates drive more than 70% of sales in most categories
    Had a reputation as the least “professional” practitioners on the DR side – reputation is changing, less of a “cottage industry” in recent years
  • 8. THE AFFILIATE ECOSYSTEM
    Affiliate
    Network
    Program Manager
    Advertiser
    Manages the program on the advertisers behalf. Can be an agency, an OPM or the Network.
    The marketplace, the third party tracking system & the back office.
    Publishes content, a virtual sales team that makes money on commission.
    YOU.
    SHAMELESS
    SELF PROMOTION
  • 9. FIVE TYPES
  • 10. LOYALTY
  • 11. COUPON
  • 12. SEARCH (ARBITRAGE)
    Advertiser/Agency
    Affiliate
    Competitor
  • 13. COMPARISON
  • 14. CONTENT
  • 15. THE SALES PITCH
    Most efficient channel
    Only surpassed by marketing to in-house lists
    Fixed margin
    Advertiser sets the cost per action
    Scalable
    Tech enables programs to grow without cost increases
    Quality of customers
    Affiliates drive customers of equal value to other marketing channels
    100% accountable
    No dollar is wasted
  • 16. INDUSTRY TRENDS
  • 17. INDUSTRY TRENDS - ADVERTISERS
    While B2C programs dominate, there are more & more B2B programs
    2010 Affiliate Benchmarks Study
  • 18. INDUSTRY TRENDS - ADVERTISERS
    Affiliate marketing has only recently become mainstream
    2010 Affiliate Benchmarks Study
  • 19. INDUSTRY TRENDS - ADVERTISERS
    Over 60% of advertisers have less than 3,000 affiliates in their program
    2010 Affiliate Benchmarks Study
  • 20. INDUSTRY TRENDS - ADVERTISERS
    While hard to read  affiliate marketing is prevalent in most industries
    2010 Affiliate Benchmarks Study
  • 21. INDUSTRY TRENDS - ADVERTISERS
    Approximately half of all affiliate programs are managed internally
    2010 Affiliate Benchmarks Study
  • 22. INDUSTRY TRENDS - ADVERTISERS
    Over 60% of advertisers feel their program meets or exceeds expectations
    2010 Affiliate Benchmarks Study
  • 23. INDUSTRY TRENDS - ADVERTISERS
    Affiliate marketing is responsible for approximately ¼ of online sales
    2010 Affiliate Benchmarks Study
  • 24. INDUSTRY TRENDS - ADVERTISERS
    Advertisers approach search arbitrage in different ways
    2010 Affiliate Benchmarks Study
  • 25. INDUSTRY TRENDS - ADVERTISERS
    Customer “quality” is equal to, or better than other online channels
    2010 Affiliate Benchmarks Study
  • 26. INDUSTRY TRENDS - PUBLISHERS
    Affiliates care about commission, but they also care about reputation…
    2010 Affiliate Benchmarks Study
  • 27. INDUSTRY TRENDS - PUBLISHERS
    Promotional space is key, and there isn’t a lot of it…
    2010 Affiliate Benchmarks Study
  • 28. INDUSTRY TRENDS - PUBLISHERS
    The network you are on matters to affiliates…
    2010 Affiliate Benchmarks Study
  • 29. INDUSTRY TRENDS - PUBLISHERS
    Affiliates rely on you/your agency as the way to learn about your program
    2010 Affiliate Benchmarks Study
  • 30. INDUSTRY TRENDS - PUBLISHERS
    Successful affiliates are buying search traffic
    2010 Affiliate Benchmarks Study
  • 31. DO
  • 32. Make sure you are offering competitive commissions
  • 33. Establish relationships with the “big guys”
  • Set up reliable tracking
    • Must have
    • 37. Network tracking in place (CJ, Linkshare, GAN)
    • 38. Nice to have
    • 39. Consider a UCT (universal container tag)
    • 40. Establish KPIs
    • 41. Dashboard reports
  • Make room for negotiation
    There are published rates and unpublished rates. Save the best (unpublished) rates for high volume, high profile publishers.
  • 42. Perform spot checks
  • 43. DON’T
  • 44. Don’t neglect your program
    DO
    • Review applications
    • 45. Offer seasonal sales contests
    • 46. Press the flesh
    • 47. Pick up the phone
    • 48. Create a promotions calendar
  • Don’t underestimate the importance of commissions
  • 49. Don’t have insufficient resources
    DO
    • Actively manage your program
    • 50. Consider a budget for placements
    • 51. Refresh creative
  • Don’t get tactical without seeing the big picture
    DO
    • Yearly competitive review
    • 52. Understand attribution
    • 53. Analyze data - spot trends
  • Don’t go silent - communicate!
  • 54. Thank You
    David Herscott
    Managing Partner, NetX
    david@netx.com
    212.981.2700
    @dherscott
    www.linkedin.com/in/herscott
    Affiliate Marketing