Affiliate marketing is a powerful customer acquisition mechanism that can have a very high ROI. It's been successfully used by a number of business-to-business (B2B) and business-to-consumer (B2C) software companies offering downloadable products as well as online services / Software as a Service (SaaS) / cloud solutions. These companies include Microsoft, SAP, Adobe, Roxio, Symantec, InfusionSoft, McAffee and thousands of others. The presentation covers the following topics:
Why you need to consider affiliate marketing
What it is and how it works
Networks specialising in software / digital goods
Affiliate marketing for SaaS / subscriptions
How B2B and B2C affiliate marketing are different
Attribution, legal, technical and other challenges
Microsoft and InfusionSoft case studies
How to get started
2. Quiz
Q. Affiliate marketing was invented by Amazon’s
Jeff Bezos after a conversation at a cocktail party
(a) Right
(b) Wrong
A. (b) - wrong. CDNow, PC Flowers & Gifts, and
Cybererotica are generally considered to have
invented affiliate marketing around 1994, two years
before Amazon (but AMZN has the patent!)
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
3. What is Affiliate Marketing Anyway?
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
4. for Today
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Why you need to consider affiliate marketing
What it is and how it works
Networks specialising in software / digital goods
Affiliate marketing for SaaS / subscriptions
How B2B and B2C affiliate marketing are different
Attribution, legal, technical and other challenges
Microsoft and InfusionSoft case studies
How to get started
Any affiliate marketers in the room?
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
5. A Quick Intro
• 1991: Moved from the Ukraine
• 1991 – 2012: Trimble
– Application Programmer, Project Leader,
Corporate E-Business Manager, Marketing
Manager, Product Manager
• Since 2012: Xtend-Life
– Product Manager, Channel & Product
Development Manager (affiliate and
reseller programs + NPD)
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
6. Why You Should Consider Affiliate Marketing
• Possibly, one of the best customer acquisition
tools with a high ROI
• Relatively easy to set up and scale up
• Can be outsourced
• Used by many successful software and online
services companies, B2B and B2C
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
7. Network Programs and In-House Programs
• A network-based affiliate program:
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Uses an affiliate network linking many merchants with many affiliates
Advanced software platform
Tracking, reporting, payments, matchmaking, education
Three “must know” networks for software businesses:
• An in-house affiliate program
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Has only one merchant – you!
Uses shopping cart plugins, off-the shelf software, SaaS
Direct relationship, increased control & flexibility
You don’t need to pay the network fees
Not an easy option for a young business: affiliates prefer to deal with
trusted and established networks
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
8. • A sophisticated platform for selling software
online including SaaS and Cloud solutions: “Any
Channel, Any Model, Any Market”
• A 40,000+ strong software focused affiliate
network.
• 1,617 vendors as of last week
• Automatic integration with any eCommerce
platform (claimed)
• Outsourced Program Management offered (3
levels of service)
• www.avangate.com/products/affiliate-network/
www.avangate.com/affiliates/
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
9. • A sales and marketing platform
• A network with 100,000 affiliates
• “30,000 transactions a day across more than
190 countries” (claimed)
• Marketplace search for “software” last week:
– 1800 hits for one-time billing
– 482 hits for recurring billing
• www.clickbank.com
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
10. • Over the years, has absorbed Regnow, ShareIt,
Swreg, other software ecommerce companies
• Some of acquired / integrated companies have
come with their own affiliate networks
• Claims to have partnerships with leading
affiliate networks globally
• Offers outsourced program management
• www.digitalriver.com
www.mycommerce.com
www.onenetworkdirect.com
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
11. Quiz
Q. “Affiliate RAP” refers to:
(a) Music popular with many affiliates
(b) Affiliate Program Managers’ activities
(c) The “Rapid Action Profits” sales solution for affiliates
A. (b). Affiliate RAP is an abbreviation for Affiliate
Recruitment, Activation and Policing
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
12. Managing an Affiliate Program
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
13. Outsourced Program Management
• Pros
– Experience
– Connections
– No AM training reqd
• Cons
– Can be difficult to get the payment model right
(usually, retainer + performance bonus)
– Product / service training required
– Continuity uncertain
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
14. Affiliate Marketing
B2C
B2B
Prevalent payment models
Pay per sale
Pay per lead, pay per sale
3rd party network importance
High
Low
Long-term relationship with affiliates
Depends
Required
Affiliate support requirements
Low to medium
Medium to high
Outsourced program management
Feasible
Questionable
Integration with offline marketing
Low importance
Medium to high importance
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
15. Affiliate Marketing for SaaS / Subscriptions
• Key issue: aligning commission with revenues
• Metaio on Avangate
• Other possible payment models: higher commission rates on high
value sales; residual commissions after the first sale, rewards for
customer upgrades, paying for both leads and sales, etc
• Adobe: 100% of 1st mth of Adobe Creative Cloud
iContact: $5 / lead (free trial) + $125 / sale (paid account)
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
16. Quiz
Q. In affiliate marketing, “attribution” refers to:
(a) assigning a value to a
marketing activity based on desired
outcome
(b) processes by which individuals
explain the causes of
behavior and events
(c) a Pirate Bay affiliates’ saying
“give attribution to avoid retribution”
A. (a). But (c) is pretty close too…
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
17. What is Attribution and Why It’s Important
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Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
First Click Wins
Last Click Wins
Multi-channel
attribution
The model you want
to use is a key
selection criterion for
a public affiliate
network (CJ vs
ShareASale) or private
network software
(Post Affiliate Pro)
Click-stream and
referral data analysis
tools: TagMan,
AvantMetrics
18. Brand Protection and Reputation Management
• Brand protection
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Domains
Trademarks
Messaging
Product claims
Passing off
• Reputation management
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Affiliates’ sites
Affiliate forums and events
Social media
Spam
“Scams, warnings and truths”
• Robust agreement (incl. social media policy, affiliate content and
promotion rules) and enforcement, tools (BrandVerity)
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
19. Quiz
Q. “Affiliate Nexus” refers to:
(a) Software for process integration often used by
affiliate marketers
(b) A line of Google-branded mobile devices popular
with affiliate marketers and affiliates
(c) A tax law concerned with local tax collection by
out-of-state retailers
A. (c). Affiliate nexus, a.k.a. click-through nexus,
is a hot legal issue affecting many affiliate
marketers and tens of thousands of affiliates
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
20. The Affiliate Nexus Battleground
Source: Commission Junction, Dec. 2013
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
21. Legal and Technical Issues
• Legal
– Affiliate nexus
– Affiliate disclosure
• Technical
– Cookie-related
– Tracking integration
– Linking initial and repeat purchases to affiliate
referrals
– Identifying affiliate sites and sources of traffic
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
22. Case Study
• Microsoft Store Affiliate Program
– Hardware (PCs, tablets, consoles, accessories) and Software (games,
Windows 8, Office, Visual Studio, Streets & Trips)
– Two affiliate networks: LinkShare, oneNetworkDirect (Digital River)
– Up to 10% commission
• Skype Affiliate Program
– Skype Credit, Skype Subscriptions, Skype Premium, Online Number
– 25% commission
– Three affiliate networks: Commission Junction (worldwide), Affiliate
Window (US & CA), TradeDoubler (UK & RU)
• MS Home Use Program
– Office Pro, Visio Premium, MS Project Pro
– CJ, flat USD $1.50 commission
• MS Windows Azure
– CJ: USD $15 / lead (90 day trial signup)
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
23. Case Study
• A marketing automation and sales SaaS solution
for SMBs with 19,000 customers / 67,000 users
• Three tier commission structure:
Silver, Gold, Platinum (up to $1,500 per sale).
• Commissions are NOT paid on subscriptions, only
on the KickStart training package sale
• In addition to banners, other digital
assets, affiliates have a mechanism to log leads
coming from offline sources
• In-house program, possibly run on the
InfusionSoft’s affiliate module
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
24. How to Get Started (as a Vendor, not Affiliate)
• Do a readiness check:
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Can you sell beyond early adopters?
Can your site “close the sale”?
Is your mission-critical IP protected?
Can you estimate your conversion rates,
customer acquisition costs and lifetime values
by source / channel?
Clarify your business goals and constraints
Get a mentor
Join several networks as an affiliate
Explore the attribution model issue
Check if the nexus issue is relevant
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
25. How to Get Started - 2
• Short-list and evaluate relevant networks
(Avangate, ClickBank, Digital River, other)
• Evaluate program options and make the choice
Affiliate Network Program
In-house Program Management
Affiliate Network Program
Outsourced Program Management
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In-house Program
In-house Program Management
In-house Program
Outsourced Program Management
Design payment model and commission structure
Prepare program policies and legal agreements
Develop creative assets
Develop the program launch & promotion plan
Launch it, then inspect and adapt
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014
26. Summary
• Affiliate marketing, despite its challenges, can be a very
powerful marketing strategy for your software business
• If you have not already done so, take out some time of
your busy schedule to consider it
• Feel free to ask
questions now or
later
Affiliate Marketing for Software Companies – Andrei Link – 4 Feb 2014