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How to Define Your (International) Network Strategy

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This presentation is from Affiliate Summit East 2017 (July 30 - August 1, 2017 in New York).

Session description: Overview of how to approach a network selection during setup of your affiliate marketing programs considering public vs. private networks, local or international approaches while internationalizing.

Published in: Business
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How to Define Your (International) Network Strategy

  1. 1. HOWTO DEFINE YOUR (INTERNATIONAL) NETWORK STRATEGY
  2. 2. ABOUT METAPEOPLE & THE SPEAKER 18 YEARS EXPERIENCE OUR SKILLS  5 years of Affiliate Marketing experience within European performance marketing agency metapeople  Since 2017: Head of Affiliate Marketing @ metapeople  Strategically supervising 25+ Advertiser in 45+ markets worldwide Valentina Piol AREASOF EXPERTISE
  3. 3. AFFILIATE – A CHANNEL FOR EVERY BRAND? MOST PROMISING AFFILIATE MIXES Most promising: high brand awareness + low explanation need (+ reasonable ABV)  CPA: COST PER ACTION  Mainly for retail (fashion, FMCG etc.), travel,…  Often low explanation need  Cookie life-time between 14 and 30 days  CPL: COST PER LEAD  Mainly for insurances, contracts…  Often high explanation need  Cookie life-time between 60 and 90 days Brand awareness Explanation need + +
  4. 4. AFFILIATE – INFLUENCING FACTORS INTERNAL FACTORS Internal factors:  Margin  Average basket value  Unique visitors  Internationalization strategy  Available budget MARGIN Relevant factor to define commissionable categories ABV Defines the height of commissions in interaction with margins UNIQUE VISITORS Less than 20.000  Affiliate not recommended Check of internal factors before defining actual network strategy 1 STRATEGY Market selection & penetration, local know-how, (de-) centralized organization BUDGET Fixed or open budget defines if campaign or program can be setup
  5. 5. AFFILIATE – INFLUENCING FACTORS External factors:  Competitor analysis  Target groups  Niche vs. mass market  Markets to target COMPE- TITION Which networks are chosen by competitors? One or more involved? TARGET GROUPS Online affinity of target group e.g. based on age and general behavior? NICHE Focus on niche / branch related networks only? MASS Products for broader target group and also for affiliates? External factors to be defined by advertiser for selection of possible networks MARKETS Focus on core markets or specializing in more exotic ones? 2 EXTERNAL FACTORS
  6. 6. AFFILIATE – INFLUENCING FACTORS External factors Internal factors INTERNAL AND EXTERNAL FACTORS = HAND IN HAND TO DEFINE THE BEST STRATEGY!
  7. 7. AFFILIATE – NETWORK STRATEGIES RELEVANT AFFILIATE MARKETS Core Affiliate market 1 Advanced Affiliate market 2 Emerging Affiliate market 3 3 3 2 33 3 LATAM: MX and BR as advanced market AR, PR, CL (…) as emerging ones EUROPE: UK and DE as European core markets FR, NL (…) as advanced ones Eastern Europe as emerging markets 2 1 2 1 2 2 3 1 3
  8. 8. AFFILIATE – NETWORK STRATEGIES GLOBAL, LOCAL, NICHE OR PRIVATE? GLOBAL LOCAL PRIVATENICHE  International coverage  Focus on specific regions  Overlapping affiliate bases  National coverage  Focus on specific markets  Mainly local affiliates  Focus on niches only  Branch related affiliate base  Int. and local active  No regional focus  Int. coverage possible  Pure tracking platform Various options available which will help supporting own targets
  9. 9. AFFILIATE – NETWORK STRATEGIES KEYFACTS PER NETWORK TYPE GLOBAL LOCAL PRIVATE Support Reporting (Own) Handling Finance Costs Given via account management Given via account management Own authority Tracking relevant KPIs only Tracking relevant KPIs only Detailed reporting options Interference possible at any time Limited interference possible Own handling = requirement Pre- and post payment Pre- and post payment Mainly post payment 20% - 30% (+ add. costs) 20% - 30% (+ add. costs) 5% - 15% (+ add. costs) Factors which can decisively influence the own options
  10. 10. AFFILIATE – NETWORK STRATEGIES WHEN TO CHOOSE WHAT  Advantages & disadvantages of network strategies Single network strategy Multi network strategy  Cost reduction for setup and fix fees  Exclusivity reduces network fee  Lower administrative effort  Attribution: easier to implement & track  Higher affiliate coverage  Exclusivity only for certain markets possible  Doesn’t apply if only one market is setup  Attribution: not possible to reward across networks Some markets are covered best via multi network approach (local + international)
  11. 11. AFFILIATE – NETWORK STRATEGIES HOW TO SELECT YOUR NETWORK PUZZLE PIECE Emerging markets Know-how needed Strong dependence LOCAL AFFILIATE MARKETING NETWORK STRATEGY Established markets Longtail via global Top via Private GLOBAL / PRIVATE  US: established global network with local headquarter  BRICS & Arabian region: local network due local conditions like language, education …  EU: international networks to reduce fees by covering more markets  Worldwide known brands: private networks to handle top affiliates
  12. 12. AFFILIATE – NETWORK STRATEGIES Market combinations Core market(s) only Established global with regional headquarter (CJ, Awin, Rakuten) Global network (with local offices) Local networks (with local knowledge like Admarula, Soicos) Global network to cover most markets within one platform Local networks Global network (with local offices) + local network Advanced market(s) only Emerging market(s) only Core market(s) + advanced market(s) Core market(s) + emerging market(s) Advanced market(s) + emerging market(s) SUMMARY: CHECKLIST TO DEFINE YOUR STRATEGY I Depending on Volumes, Resources & Strategy e.g. private network applicable
  13. 13. AFFILIATE – NETWORK STRATEGIES SUMMARY: CHECKLIST TO DEFINE YOUR STRATEGY II Number of markets Market type Resource / Know how Budget / margins Brand awareness Your strategy Available Unavailable Open Limited Single Multi Core Advanced Emerging Low High
  14. 14. AFFILIATE – NETWORK STRATEGIES SUMMARY: CHECKLIST TO DEFINE YOUR STRATEGY II Number of markets Market type Resource / Know how Budget / margins Brand awareness Your strategy GLOBAL NETWORK Start as single network Later on local Available Unavailable Open Limited Single Multi Core Advanced Emerging Low High
  15. 15. AFFILIATE – NETWORK STRATEGIES SUMMARY: CHECKLIST TO DEFINE YOUR STRATEGY II Number of markets Market type Resource / Know how Budget / margins Brand awareness Your strategy GLOBAL NETWORK Start as single network Later on local PRIVATE NETWORK Single network strategy Available Unavailable Open Limited Single Multi Core Advanced Emerging Low High
  16. 16. AFFILIATE – NETWORK STRATEGIES SUMMARY: CHECKLIST TO DEFINE YOUR STRATEGY II Number of markets Market type Resource / Know how Budget / margins Brand awareness Your strategy Available Limited Single Multi Core Advanced Low GLOBAL NETWORK Start as single network Later on local PRIVATE NETWORK Single network strategyLOCAL NETWORK Single network / market Later global for int. Unavailable Open Emerging High
  17. 17. AFFILIATE – NETWORK STRATEGIES SUMMARY No fixed patterns as strategies differ Local: transparency vs. local insights Limited budget: one platform only for campaign More markets: better negotiating position Emerging markets require local know-how Private: Top affiliates and popular brands only
  18. 18. AFFILIATE – NETWORK STRATEGIES CASE STUDIES PRIVATEGLOBAL LOCAL Summary: In 2012, Deutsche Lufthansa decided to setup affiliate programs in 39 markets within less than one year. Strategy:  Dividing markets into EU & ROW  Tradedoubler as network for Europe  Commission Junction for rest of the world Results:  Reduced network fees  exclusivities  Constant performance increase Summary: adidas had a clear focus on 4 affiliate programs running in the European markets NL, UK, DE and FR. Strategy:  Cooperation with PHG (self-serve platform)  Focus on centralization, consolidation and a change of network model Results:  Expansion to 18 markets within EU  Trend identifications due to insights Summary: In 2016, Deichmann, Europe's biggest shoe retailer, decided to setup a local network for two of their 13 European markets: CZ and SK. Strategy:  Cooperation with VivNetworks  Local network enables detailed market insights Results:  Better realization of local promotions  Sales increase and extension of affiliate base * * https://blog.performancehorizon.com/how-iprospect-adidas-drove-massive-affiliate-channel-growth
  19. 19. AFFILIATE – NETWORK STRATEGIES MANY THANKS FOR YOUR ATTENTION! READY TO SETUP YOUR (INTERNATIONAL) NETWORK STRATEGY? ANY QUESTIONS?
  20. 20. AFFILIATE – NETWORK STRATEGIES CONTACT VALENTINA PIOL  Head of Affiliate Marketing  E-Mail: Valentina.piol@metapeople.com  Phone: +49-203-41050-0  www.metapeople.com

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