The A-Z of Performance Marketing


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Bruce Clayton, Optimus PM, Sandro Nitschke, Optimus PM GmbH

a4uexpo Barcelona 2012

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  • This is intended to be a presentation to give an overview of terms commonly used in performance marketing – their meaning, importance and implications when applied in the real world
  • Your speakers are myself – Bruce Clayton – co-founder and director of Optimus Performance Marketing in the UK and my colleague Sandro– the founder and managing director of Optimus Performance Marketing GmbHThe 10 second pitch now follows …With over 70 clients under management and 3 offices, OPM is the UK’s largest performance marketing specialist, with 14 permanent staff dedicating to delivering great service and value to clients seeking to maximise their affiliate programmes!
  • As always – I will preface any presentation I am part of with an apology or twoPlease forgive us if much of this is basic knowledge – however dealing with a wide variety of clients, networks and publishers – the knowledge is by no means universal, and hopefully everyone will learn something from itIt is drawn from terminology used by clients, networks and publishers alike and is tailored to encompass the differences in the EU marketplace
  • The afffiliate / publisher or media owner is one corner of the triangle! They essentially promote a merchants products or services and get paid on the basis of delivering a sale or agreed actionAn aggregator is a type of publisher who collates information – manually or via product – these generally take the form of a searchable database (such as Twenga and Idealo) or comparisons (in the case of financial services) such as MoneySupermarketApproval – is the process of allowing publishers onto an affiliate programme - either manually after looking at their sites or method of promotion. It can also refers to the process of validating sales when administering an affiliate programmeAbandonment – refers to the process where the checkout process is abandoned before completion. It also refers to a type of affiliate that will re-market to customers who have abandoned the checkout to entice them to purchase. Such as VeInteractive in the UKAttribution – refers to the contribution made by different online channels and affiliate types in the sales process. Requires tracking solutions that recognise the sources of traffic and publisher.Append – refers to additional code placed on the tracking URL to identify the source of traffic
  • Banners - are the traditional creative vehicle to showcase offers and brand. Simple message avoiding the use of specific offers, dates, URL’s and telephone numbers – ensuring long life and relevance. Bloggers – a significant affiliate type, contributing to the health and diversity of the content area. Can be professionally organised media organisations or individuals communicating an interest or a diary. Either acting as affiliates in their own right or being available via syndication networks such as SkimlinksBrand Bidding – where a paid search affiliate is bidding on brand related terms, either with or without permission.Bounce – or Bounce Rate – the amount of traffic that reaches a web-page and immediately leaves the site without continuing any further.Browser – the internet browser that a customer is using to view a merchant or affiliate site. Important as this affects how people view websites, their user experience and is a major factor in how web pages are designed to work with as many as possible – IE / Firefox / Chrome / Opera / SafariBasket Value (aka ABV) – the average value of a sale. This can be used to compare the sales value driven by different affiliate types or the affiliate channel in relation to other sources of online sales. Also used to measure the effect of promotions on sales values.
  • Content – specifically written material about products of services designed to explain, entertain and educate. Generally written to achieve prominence in search rankings by appealing to search engine algorithms by providing original and new material. Generally accepted as providing incremental sales and value to brands in terms of exposure.Cookie – usually a small piece of data sent from a website and stored in a user's web browser while a user is browsing a website. When the user browses the same website in the futurethe data stored in the cookie can be retrieved by the website to notify the website of the user's previous activity. tracking cookies and especially third-party tracking cookies are commonly used as ways to compile long-term records of individuals' browsing histories — a major privacy concern that has prompted European and US law makers to take action.Contextual - A contextual advertising system scans the text of a website for keywords and returns advertisements to the webpage based on those keywords. CPA – Cost Per Acquisition, the term used to describe the primary activity of affiliate marketing.CPM – Cost Per Mille (thousand) the term used to describe the purchase of traditional online advertising such as banner impressions / e-mailCPL – Cost Per Lead, the term used to describe payment for a non sale based action – such as a registration / e-mail address or completed applicationCPC – Cost Per Click, refers to payment received for every click generated by an affiliate or search engine advertisement.CTR – Click Through Rate – is a way of measuring the success of a link or banner in generating clicks. The number of clicks divided by impressions expressed as a %'age.Cancellation Rate – the amount of sales or actions cancelled due to returns / fraud or other reasons expressed as a %’age of total sales. Varies according to merchant type and sector.
  • Comparison – similar or identical to aggregators. Affiliate sites that bring together multiple merchants to compare similar information for the benefit of the user.Conversion – generally taken to mean the amount of sales generated from a given amount of clicks expressed as a %’age. This is an important measure of a websites efficiency from an affiliate’s perspective, as well as an indication of affiliate performance when seen from a merchant perspective. Each affiliate category tends to have a “band” of conversion rates. Container Tag - A container tag is simply a tag. It’s a line of JavaScript that you add to the pages of your sitethat can hold other tags. This enables multiple sources of traffic to be monitored together and is key to any attribution strategy.Coupon – aka Voucher Code – a code that is available to a customer that enables them to benefit from a discount or value-add that encourages them to complete a sale. A very large sector of affiliate marketing in the EU and USA – with numerous local Voucher CodeCash-Back – aka Reward – websites that give back affiliate commissions in the form of cash-back or reward points to their members or charitable donations on behalf of members based on the affiliate commissions they receive from sales generated. Commission – the reward received by a publisher for delivering a sale or agreed action.
  • Deep-Link – when a link on a publisher site links to a specific page or product rather than the homepage. Descriptions – the description of a product, important in informing a customer of the benefit. In order to have maximum effectiveness this needs to be in local language or universally accepted formats in order to be understood by the largest possible audience.Directory Site – a site that lists merchants by classification to provide an easily searchable resource, largely overtaken by comparison sites.Delivery – the variety of delivery options for physical or download of product. Variety and cost of which are a key component of conversion.De-duplication – removal of sales / actions that are tracked by multiple networks, either manually or automatically via the use of click appends
  • EPC – Earnings Per Click – the amount of commission revenue earned by an affiliate divided by the clicks taken to generate them. E-Mail – relating to affiliate marketing, this is a category of affiliate that generates sales from e-mailing a database of potential customers – segmented or otherwise by known interest or geography.Exclusives – any form of unique offer given to a publisher that is unavailable to anyone else. May be a code/coupon, cash-back rate, product offer or competition.
  • Feed – Product Feed – an RSS / XML / CSV or Excel file that contains a merchants product database in defined fields, enabling publishers to repurpose that data on their own sites either manually or via automated content management systems.Feedback – from customers of affiliate an essential part of optimising a website against various criteria.Forms – the means of capturing data on a website, the design of which is key to conversion, which needs also to reflect necessary legal and or informational requirements to ensure that data is of sufficient quality and has the necessary permissions for its later use.Frames – iFrames - Frames allow a visual HTML Browser window to be split into segments, each of which can show a different document. This can lower bandwidth use, as repeating parts of a layout can be used in one frame, while variable content is displayed in another. Useful in areas such as financial products where data needs to be captured by a merchant party securely – but within the sales environment of a 3rd party site.
  • Geo-Fencing - A geo-fence could be dynamically generated—as in a radius around a store or point location. Or a geo-fence can be a predefined set of boundaries. This has relevance in mobile based marketing which enables the use of GPS to target offers based on proximity to a physical merchant location.Geo-Targeting – the use of known IP locations to ensure that irrelevant audiences are excluded and that the correct content is delivered the intended audience. Useful for merchants operating in multiple territories with local facing websites.Google – a massive factor in affiliate marketing, controlling the majority of search traffic and determining the success of affiliate business models due to the application and variations of the “algorithm”Generic – refers to anything non brand related in paid search – such as “LCD Television” as opposed to “Sony LCD Television” – no exclusions can be applied by a merchant to paid search activity conducted by competitors or affiliates on generic terms
  • Homepage – the highest level page on the website. The showcase for a merchant or affiliate site containing information, offers and links to the rest of the website. The effectiveness of the homepage being key to the overall site conversion. Hijacking - achieved by creating a rogue copy of a popular website which shows contents similar to the original to aweb crawler, but redirects web surfers to unrelated or malicious websites. Spammers can use this technique to achieve high rankings in result pages for certain key words.
  • Impression – Impressions refers to the amount of times an advertisement is seen (in affiliate marketing this refers to banners). Used as a measure of delivery in traditional advertisement as fulfilment of agreed delivery. Incremental – the proportion of sales that can be directly attributed to a publisher without the involvement of outside influence. The determination of incrementality is a key driver behind the practice of attribution.Integration Fee – the fee charged by an affiliate network or platform to launch an affiliate programme, covers the technical integration and testing and associated administration required to set up and launch an affiliate programme.
  • Journey – refers to the “customer journey” – describing the process from initial engagement with the merchant or affiliate website and the time and path taken between initial click to eventual sale or outcome.
  • KPI – Key Performance Indicators – the measurements required to determine the success of a business. In the case of affiliate marketing these can be things like order value, conversion etcKnowledge – more valuable when shared in the affiliate space, as it informs the best decisions and attracts positive actions from publishers.Keywords – refers to search – the words and phrases that drive traffic to websites, specific products. These are of interest to publishers who work with paid search as well as merchants who are keen to see what search activity to optimise a PPC or natural search optimisation programme against.
  • Landing Page – the page a link directs a user to. In this context it generally refers to a specifically created page for the benefit of a specific offer, promotion or product. Can be used to best effect when tailored to a specific publisher and offer – as they closely link what a user is looking for with the referring publisher resulting in much higher conversions, and are more likely to receive a high level of promotion by the publisher.Lead Generation – the use of the affiliate channel to generate enquiries, applications or registrations as opposed to sales. Can be done alongside generating sales or as a standalone activity for non-physical products and services or products who’s sales cannot be tracked online. Linkbuilding – refers to the practice of relevant sites linking to each other via content or other links placed on site pages to increase the popularity of site pages and achieve higher rankings on search engines / increased trafficLifetime Value – refers to looking at the value of a customer introduced by the affiliate channel beyond the value of an initial sale. This depends upon the likely rate of repeat purchase, the frequency of repeat purchase and how successfully a merchant can re-market to customers to encourage purchases. This means initial commission rates can be higher for a first purchase if that proves a greater publisher incentive.Long-Tail – refers to the group of publishers that lie outside the top 10 for delivering sales. Generally they deliver a lot of exposure but relatively few sales,however they are important as they have potential as a group to deliver more in correctly developed.
  • Mobile – anything to do with affiliate marketing using mobile devices such as smartphones and tablets. Creates opportunities in taking affiliate marketing out of the home and making offline promotions possible via geo-targeting. Also requires mobile optimisation of websites to enable the best user experience / convenience.Marketing Plan – important to share with affiliate marketing partners to ensure that promotions, sales and content initiatives are picked up and marketed by publishers for maximum benefit.Multi-Attribution – The idea of remunerating all contributors to a sale by monitoring the contribution of online channels and publisher type. So a sale that involved a content affiliate and a voucher code affiliate would see the affiliate commission split between them. Not widespread practice.Monthly Fee – also known as Access Fee / Licence Fee – the monthly charge made by an affiliate network that covers the use of the network platform and any account management services they provide. This is in addition to any override.
  • Network – the providers of the technology platform of affiliate marketing, vary in size, service and geographical coverage – however all provide the means of tracking, recording, reporting sales as well as handling payment of publishers. Are being challenged by providers of technology services.Newsletters – a vital tool of communication with merchant publisher base (in the case of a merchant) or a valuable means of generating exposure and sales for an affiliate with a database of users. Provide value – must be timely offers, relevant etc.
  • Offline – refers in the case of affiliate marketing to a transaction or activity that occurs in a physical shop or location initiated online. Override – the other means by which an affiliate network is remunerated, refers to a %’age charged on top of affiliate commission payable – usually between 20 and 30% in the UK and EU, and in the US charged as a smaller %’age of sales rather than commissions.Organic – refers to traffic driven by non paid search activity and direct traffic resulting from advertising. Maximising organic traffic is the primary aim of search engine optimisation (SEO) and other forms of non-search related advertising.Open Rate – refers to the amount if e-mails sent that are opened by the recipient expressed as a %’age of the overall send volume. Optimisation – refers to the process of making changes to processes, websites and content to increase sales, conversion rates etc
  • Payment Options – refers to the means made available by a merchant for a customer to pay for a transaction - such as debit card, bank transfer (payment in advance), credit card, charge card (American Express), Paypal, cash on delivery or Direct Debit. Getting this right for a specific market is key, and not all of these methods are useful in all countries. Germany is very different to the UK.Paid Search / PPC – the use of paid search advertising in search engines such as Google and Bing predominantly.Platform – can refer to an affiliate networks technology, or an e-commerce platform used by a merchant to power a transactional website.Promotions – activity aimed at consumers and / or publishers to drive sales – such as voucher codes / commission increases / exclusive offers / landing pages if aimed at a specific affiliate, or sales, general codes or offers if more consumer oriented.Policing – monitoring publisher activities with reference to commercial policy – such as monitoring brand related PPC, marketing messages displayed on publisher websites and other KPI’s that can denote issues – such as abnormal sales levels, high AOV’s and cancellation rates. Profit – a key driver in all affiliate activity. Merchants need to ensure that they understand the cost base of their affiliate programme and that sales driven are profitable sales, or are profitable within the context of the lifetime value of the customer.Post-View – sales that occur after a banner has been seen by the customer, the cookie being set when the impression has been served. This MUST be a genuine above the fold advertisement that requires no scrolling to see. Will normally have a much shorter cookie period than a post-click sale.
  • Re-Targeting – the serving of display advertising (banners) to users based on their visit to a merchant site. Affiliate Publishers of this type include Criteo, Next Performance, MyThings and Adrolays – rely on the use of post view cookie. Drive useful sales and increase brand awareness.Returns – refers to orders returned by customers ordered online. Tends to have a natural level depending upon merchant sector and type. Abnormal returns rates are an indicator of potential fraud, and can be monitored by tightly policing affiliate sales based upon a reasonable returns period (14 to 40 days) and certain payment types (cash in delivery or direct debit)Repeat Customers – refers to customers that buy repeatedly through the affiliate channel. Problematic only if commission levels and cost reduce available margin. Repeat business is driven by cashback and voucher code sites as they are frequented by loyal customers seeking additional value through shopping online.Rewards – refers to cashback / loyalty affiliates where affiliate commissions are given back to a member either as cash or points to be redeemed.
  • Social Media – in the affiliate context refers to the opportunities to drive affiliate sales through Facebook, Twitter etc. Presents policing issues as is not easy to tie back to a referring URL or a documentable web-page. SEO – Search Engine Optimisation – the origination of specific content and web design techniques designed to produce optimal results in search engine rankings.Speed – a key factor in successful e-commerce. Refers to page load times, the faster the better – slow loading pages result in high bounce rates.Set Up Fees – aka Integration Fee (the fee charged by an affiliate network or platform to launch an affiliate programme, covers the technical integration and testing and associated administration required to set up and launch an affiliate programme.)Seasonality – refers to the fluctuations in sales that are specific to an individual merchant, sector or in general.Stand-alone (aka Solus) – refers to an affiliate e-mail that features only one client.
  • Textlinks – refers to a link that is not a banner or graphical. They are the predominant driver of sales, tending to occur on all publisher sites.Tracking – the terms used to describe the means of recording and attributing sales driven by affiliates. Facilitated by the placement of code on specific pages that recognise cookies placed on the customers browser when a link on a publisher site is clicked or a post-view cookie is dropped. Tenancy – refers to opportunities on publisher sites that are paid for rather than CPA based. Will tend to be newsletter or site placement based with a guarantee of minimum e-mail delivery numbers or impressions. Can work well to access incremental traffic.Terms and Conditions – the commercial policy and the framework for the policing of affiliate programmes, serve as the guidelines for how affiliates can promote merchant products.Tool Bar – a downloadable application provided by an affiliate that sits on a users PC (usually the browser) that exists to ring-fence sales and commissions. Usually associated with vouchercode and reward / cashback sites.
  • Unique Visitor – refers to the amount of visitors received by a website over a period of time with duplicated visits removed. Provides a true measure of the reach of the site.Unique Content – content that isn’t duplicated elsewhere on the web. Unique content has great SEO value, as it tends to be valued by search engine algorithms.Usability – refers to the science of how users interact with websites, their behaviour and how this can influence site design and processes.
  • Voucher Code (AKA Coupon) - a code that is available to a customer that enables them to benefit from a discount or value-add that encourages them to complete a sale. A very large sector of affiliate marketing in the EU and USA – with numerous local Voucher Code sites in each territoryValidation – the process of verifying affiliate sales commissions after reference to the e-commerce reports to see what sales are genuine / leads meet the criteria for paymentValue-Add – refers to additional incentives such as a free gift or free delivery – commonly code based and used as an alternative to discount codes to preserve margin.
  • Widget (aka Dynamic Creative / Content Units) – graphical creative from banner sizes to larger units that are dynamically populated by merchants or customised by affiliates. This allows up to date or themed product information to be displayed – improving conversion and sales.
  • The A-Z of Performance Marketing

    1. 1. The A to Z of EuropeanPerformance Marketing Bruce Clayton / Sandro Nitschke Optimus Performance Marketing GmbH
    2. 2. Intro• Bruce Clayton – Co-Founder / Director• Sandro Nitschke – MD Optimus PM GmbH• Over 70 clients under management in EU• Offices in UK and Germany• 14 Permanent staff
    3. 3. Intro• An overview of commonly used terms• Drawn from merchants, publishers and networks• Based on best practice and latest developments• Pan-European where possible
    4. 4. AAffiliate (or Publisher)AggregatorApprovalAbandonmentAttributionAppend
    5. 5. BBannersBloggersBrand BiddingBounceBrowserBasket Value
    6. 6. CContentCookieContextualCPACPMCPLCPCCTRCancellation Rate
    7. 7. CComparisonConversionContainer TagCouponCash-backCommission
    8. 8. DDeep-linkDescriptionsDirectoryDeliveryDe-Dupe(licate)
    9. 9. EEPC / EPHCE-MailExclusives
    10. 10. F Feed• Feedback• Forms• Frames
    11. 11. G• Geo-fencing• Geo-targeting• Google• Generic
    12. 12. H• Homepage• Hijacking
    13. 13. IImpressionIncrementalIntegration Fee
    14. 14. J• Journey
    15. 15. KKPIKnowledgeKeywords
    16. 16. LLanding PageLead GenerationLinkbuildingLifetime ValueLong-Tail
    17. 17. MMobileMarketing PlanMulti-AttributionMonthly Fee
    18. 18. NNetworkNewsletter
    19. 19. O• Offline• Override• Organic• Open Rate• Optimisation
    20. 20. PPayment OptionsPaid Search / PPCPlatformPromotionsPolicingProfitPost-View
    21. 21. RRe-TargetingReturnsRepeat CustomersRewardsRedirect
    22. 22. SSocial MediaSEOSpeedSet Up FeesSeasonalityStand Alone / Solus
    23. 23. TTextlinksTrackingTenancyTerms and ConditionsTool Bar
    24. 24. UUnique VisitorUnique ContentUsability
    25. 25. VVoucher CodeValidationValue-Add
    26. 26. W• Widget
    27. 27. Optimus Performance Marketing