This was a presentation done at Click 4.0 IQPC conference in 2010. The presentation talks about Affiliate Marketing and usage of social media to generate leads. I was then working at HSBC Bank Middle East.

1. Affiliate Marketing
Affiliate Marketing Social
Background http://www.webdesignerdepot.com
Kapil Bhatia

3. Exactly what is affiliate marketing?
• What is it?
‘A commission based (CPA) arrangement where referring sites (publishers) receive a
commission on sales or leads by retailers or banks’.
• Remember – affiliate sites use other payment models
– CPC (Cost Per Click) and CPM (Cost per thousand) or fixed media buys are also possible
Visitor
PC
Commission fee
Tracking
Software
/ Network
Merchant
site
Affiliate
site
Click
Sets time-limited cookie e.g. 1 day to 90day
checks cookie present on purchase
Creative
Visit Re-direct
• Example Affiliate networks:
– www.cj.com (+US), www.tradedoubler.com (+Europe), www.omguk.com
www.dgm-uk.com, www.affilliatewindow.com, www.buy.at,

4. Affiliate v/s Aggregator
• Affiliates (Publishers)
– Small privately owned sites
– Carry out their own marketing activity
– Through various business models to generate traffic to their site
– Build their own customer base.
– Affiliates may advertise for other sites, and receive commissions
for sales generated via their website.
• Aggregators,
Affiliate & Aggregator Marketing
operational diagram
– Sometimes referred to as Comparison sites,
– Have a similar payment model to Affiliates
– Receive commissions for sales generated via their site, at an agreed
amount prior to activity starting.

5. Operational Relationships
More cost effective to manage the programme through Affiliate Networks.
Examples - Online Media Group (OMG) and Commission Junction (CJ).
• Affiliate Networks:
– Act as an intermediary between the merchant/brand and the affiliates.
– Manage hundreds of sites.
– Set up tracking, manage the payment of individual affiliates,
– First point of contact to resolve affiliate issues.
– The networks in turn receive an agreed % commission for each sale delivered
• Aggregators
– Are generally larger in scale than affiliates, and fewer in number
– More established
– A single aggregator can deliver significantly larger volumes than a single affiliate.
– More cost effective to manage aggregators directly.
– Building direct relationships, eliminates network fees and provides an opportunity for negotiating better deals.

7. Who are these affiliates?
• 83% male
• 34% are full time affiliates
• Promotion techniques:
– Social Networks
– Blogs & Forums
– Email Marketing
• Networks used:
– Affiliates are typically signed up
with multiple affiliate networks
– 15% of affiliates are signed up
with just one network
Source: E-consultancy Affiliate Census 2009
http://www.e-consultancy.com/publications/affiliate-census

8. What can affiliates do?
13% of the affiliate marketer generate > £ 50,000 per month for their business
Source: E-consultancy Affiliate Census 2009
http://www.e-consultancy.com/publications/affiliate-census

9. Affiliate Programme Structure
Merchant Affiliate Networks Affiliates/Publishers
1. Agree fixed commission
per sale with networks.
2. Agree terms and
conditions for the
programme
3. Pay monthly sales lump
sum
1. Recommends new affiliates
wishing to join the
programme.
2. Recommends new
opportunities for increasing
volumes
1. Manages the affiliate set
up process once
approved for the
programme
2. Pay individual affiliates
1. Any new opportunities to
drive more volume
through their site
2. Resolution of any
tracking or payment
issues

10. Affiliate Types
• Affiliates vary in their business model type which they
employ to generate traffic to their sites. These include:
Business Model Explained Example sites
Paid Search Bids on generic , high-volume
keywords
http://www.compare-carinsurance.com
SEO – Natural Search Employing SEO techniques to
achieve high rankings in the
natural search listings.
http://www.trialpay.com
Email marketing to
registered customer base
Send weekly emails with offers
and promotions to a registered
customer base that have opted in
to receive such updates.
www.smartquotes.com
Social Media/Blogs Posting of affiliate links on social
networking sites or writing product
reviews on their blogs/vlogs
www.facebook.com
Loyalty/Cashback /
Incentives
Registered customers receive an
incentive, cash back or points
(towards some incentive) when
they purchase via the affiliate
http://www.xpango.com
http://www.quidco.com
Product Comparison /
Review
Sometimes seen as small
aggregators. Encourage customer
reviews and have product table
comparison across a number of
brands
http://moneysupermarket.com

11. Why Affiliate Marketing
• Increasing the amount of traffic to
your site
• Benefit from gaining links from
established web sites and online
marketers
• Amazon implemented an in house
affiliate scheme in 1996
• Your affiliates are your online
sales force, but you only pay when
they actually make a sale.
• If AdWords aren’t performing
– Or your natural listing drop, you have
another source to fall back on

12. Redefining Newton’s law for the Digital World
for every interaction
there is an equal and
opposite reaction

13. web 2.0

14. Affiliate Marketing and Social Media
• People discussing, commenting and recommending the products that matter to them.
• A limitless marketing budget (allowable cost/lead)
• Unbound customers finding new ways to efficiently take your products to market.
• Customers actively seek product reviews –
– Blog about it or create groups for discussion
• Caution
• May not generate direct Income
• But
• They will lead customers to your sites via links submitted
• Create Awareness about your product/services

15. Affiliate Marketing on Social Networks
More than 50% of the Affiliate Marketers use Social Media to promote
products
Source: Affiliate Marketing Benchmarks
http://www.affstat.com

16. Usage of Social Media Sites
Twitter exceeding usage of Facebook for Affiliate Marketing
Source: Affiliate Marketing Benchmarks
http://www.affstat.com

17. Adoption of Social Media
Facebook Twitter – Information network
Referring Links to Merchant’s Website
For merchants - opens up a new
channel to sell products
For affiliates –a way to generate
revenue by recommending other
people's products to Merchants
Website

18. Affiliate Marketers using Youtube to
promote Products.
Tips for Affiliate Marketers: -
-Product Reviews on Vidoes
- Add Affiliate URL to the video to
redirect the viewer to the Merchant
(Bank) site
Note - The Marketer is wearing a
T-Shirt highlighting his website
used for Affiliate Marketing.
Event or the URL Link

19. What Can You Sell Using Affiliate
Marketing

21. Product considerations
• Tips on approach
– High online purchase rate
• Additionally can pay
commission
on direct phone numbers
(managed by affiliates)
– Need competitive rate to achieve
volume
• Can make competitive on
some criteria only, e.g. 0% on
purchase, not balance transfer
• Uncompetitive products can be
promoted in other ways to
increase EPC, e.g. cookie
period, leads for other products
not in programme
• Not worth high CPA deal on
aggregator unless rate
competitive
• The experience:
– “Steer clear of high involvement
products with complex fulfilment
– Examples of suitable products
• Home and motor insurance
• Credit cards
– Examples of less / unsuitable
products
• Mortgages
• Life insurance

22. “he clicks
me
he clicks me
not”

23. Banners
1. Strong primary message
2. Use high contrast
3. KISS - Don’t use TOO MANY:
Frames
Ad elements
4. Clear call-to-action
‘Apply Online Now!’
All frames clickable
5. Consider images

24. Landing Pages

25. Example creative

26. Reach/Segmentation consideration

27. Affiliate relationships consideration
• Tips on approach:
• Provide detailed and up-to-date
programme information – copy
and best features to promote –
not just a bullet list.
• Monitor and respond to forums
and top affiliate blogs
• Regular email communications
- Newsletter
- Personalised email
• Phone communication for top
affiliates.
• Quick response to queries
The experience:
• “It’s all down to communication”
• Monthly newsletter for all
affiliates with updates on key
product / rate launches
• Phone chat with top affiliates
explaining, changes in CPA if
product not converting or being
tracked through secure banking.
• Top tier affiliates don’t get
blanket emails – only personal
ones

28. Reach / segmentation consideration
• Tips on approach:
• Track new / emerging affiliates
each month
• Treat large super affiliates
differently.
• But use different involvement
tactics for smaller affiliates
(e.g. reward fastest growing,
those that meet a low-mid
volume threshold)
• The experience:
• “Market evolving fast”
• Now 100s of affiliates per product
commonplace – adding monthly
• 90 (% sales) : 10 (% of volume) rule
still applies
• Need separate strategies for super-affiliates
and tail – mid and long

29. 10. How well are you measuring the
health of your affiliate programme

30. Overall programme or network MI
• Importance of affiliate channel / network:
– % sales generated by affiliates
– Number of sales, value of sales
• Value from channel / network
– Return on investment
– Long-term lifetime value
• Affiliate recruitment (segment by affiliate types):
– Absolute and % active affiliates
– New signups
• Aggregate affiliate performance (segment)
– Number and % increasing sales
– Number and % decreasing

31. Few Disadvantages
Banner Placement – You are not directly in control of where your ads are
shown. However, as you pay on results it won’t cost you too much if they do
not work.
Less Choice – You have less choice over which will show your ads and
where they will show them. Affiliate adverts are at the request of the
publisher.
Direct Affiliate – Time Consuming – As you need to deal with every
publisher individually
Network Affiliate – Requires Payment – Joining an affiliate company is not
free!

32. Future Trends
• Affiliate marketing is a low-risk, high-return strategy for online marketers.
• US affiliate marketing spending will reach $4 billion by 2014 and will increase at a
compound annual growth rate (CAGR) of 16% from 2009 through 2014
• Payments to affiliate sites direct from marketers will represent the majority of the
affiliate marketing spending, or 57%, in 2014.
• Within the next five years financial services firms will be among the top 3 spenders in
the affiliate marketing arena.
• Will be most preferred type of marketing in tough times
Source: US Affiliate Marketing Forecast, 2009 To 2014
http://www.forrester.com

33. Background http://www.webdesignerdepot.com