Introduction To Affiliate Marketing 20.03.2012 Final


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Affiliate Marketing, Performance Marketing, CPA, CPL, CPC

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Introduction To Affiliate Marketing 20.03.2012 Final

  1. 1. Agenda What is affiliate Introduction Will it work for me? marketing 5 Steps to create myWho or what is an affiliate Case Study own affiliate program
  2. 2. Today’s Session• Part 1: 2 hours Understanding of the What, Why,When, How & Who of Affiliate Marketing• Part 2: 1 HourCase Studies, and Break out session,and Questions Slide 3
  3. 3. What is Affiliate Marketing?
  4. 4. Simple definition• Website’s (affiliates) generate leads and sales for (merchants), in return for reward Slide 6
  5. 5. Market Size & TrendsAffiliate marketing drove £4.62bn in online sales during 2010, a 12%increase on 2009(£4.13bn) This means affiliate marketing drove 8%of all online retail sales Slide 7
  6. 6. Affiliate continues to show strong growth
  7. 7. And steal share of the media mix
  8. 8. Acquiring our share A recent IAB study of 140 advertisers showed: 77% of respondents said that marketing spend for affiliates had grown and 71% expected it to grow again in the coming year 19% of respondents are paying out over £100k month in affiliate commissions Over ¼ of respondents spend more than 20% of online marketing budgets on the affiliate channel IAB Survey December 2011
  9. 9. Affiliate Marketing is significant in spend 5% 12% Classifieds Search 19% Affiliate 43% E-mail Display 21%European Affiliate Marketers’ Online Ad Spending Distribution
  10. 10. Why use Affiliate Marketing?
  11. 11. Where does affiliate fit into my online strategy?
  12. 12. MetricsPerformance based: only payfor conversions, clicks, leads, salesTracking required: usually donethrough an affiliate networkCost per Acquisition, cost per click,cost per lead, cost per download, costper view, cost per Facebook like
  13. 13. How does it work?
  14. 14. The 4 Key Elements Merchant Affiliates Network Consumers
  15. 15. A typical customer journey? Payments are made driven to the affiliates site affiliate, this data is available to them through our Customer is by referring affiliate each via ID, tiers and conversion or the users machine TradeDoubler to is 3 6 4 5 2 1 Upon conversion the TradeDoubler pixelon fired taking into engine , emailon bookmark event a search sets a to TradeDoubler TradeDoubler tracks theon the pixel implemented data is sent backcookie data capturedrules Commission is calculated based ( andaccount any de-duplication Depending interface, affiliates can access using their unique login details 6 5 4 Consumer Affiliate Network Merchant 1 2 3Legend Traffic Payments
  16. 16. Implications for merchants• The benefit for the merchant is simple; – They only pay out on results – Guaranteed ROI – Zero risk strategy Slide 18
  17. 17. Implications for affiliates• affiliate’s need to become experts in driving relevant traffic to merchants websites in order to maximise return for themselves.• The affiliate spends their own time and money driving traffic to the merchant and only gets paid if they deliver results. Slide 19
  18. 18. Implications for networks• Must work with a large number of affiliates• Only make money if they can drive sales for the merchants• Networks must have accurate reporting and tracking
  19. 19. Who are these Affiliates? Slide 21
  20. 20. What is an affiliate?• Has anyone heard of• affiliates are:“companies, groups and individuals who promotemerchants through one, or many of the various forms ofaffiliate marketing” Slide 22
  21. 21. Who are the affiliates?20% 34% Full Time Part Time46% Hobbyists Slide 23
  22. 22. Female V’s Male18% Male Female 82%
  23. 23. Where do they work fromHome Vs Office Working 19% Home working Office Based 81%
  24. 24. Affiliate Types 13% 28% Search 6% 3% Email Marketing Media Agency/ Media Broker 8% Portal/ ISP 7% 4% Price Comparison Reward/ Loyalty 31% Shopping Directories Content 6,500 active affiliates with circa 1,000 active affiliates each monthSource; Tradedoubler
  25. 25. Types of affiliates?Content Cashback Comparison sites Emailers Shopping directories Voucher code In reality affiliates are entrepreneurial early adopters who operate across the entire digital spectrum
  26. 26. Content affiliates
  27. 27. Emailers Slide 29
  28. 28. Shopping Directories
  29. 29. Cash Back
  30. 30. Loyalty Website’s
  31. 31. Voucher Code Website’s
  32. 32. Cashback affiliates UK Slide 34
  33. 33. The Affiliate Networks Slide 35
  34. 34. What is an affiliate network? “affiliate networks provide theirclients(merchants) with a gateway tolarge numbers of individual affiliates andenable all parties to track results throughthe use of their technology” Slide 36
  35. 35. Who are the affiliate networks? Slide 37
  36. 36. TradeDoubler are the affiliates network of choice 30.00% Across 18 countries affiliates were asked the question… 25.00% “Who are the preferred affiliate networks that 20.00% you currently work with” 15.00% 10.00% 5.00% 0.00% TradeDoubler Webgains Zanox Affiliate Window NetAffiliation Commission Affilinet Daisycon PublicIdees Linkshare JunctionSource: A4U European affiliate landscape report September 2011
  37. 37. What makes TradeDoubler 9 Europes No.1 network Across 18 countries affiliates were 8 asked the question… 7 “Which features makes 6 that network your preferred choice to 5 work with ” 4 3 2 1 0 Tracking Quality of Payment Payment Range of Transparency Reputation Exclusivity of reliability advertisers reliability frequency advertisers programsSource: A4U European affiliate landscape report 2011
  38. 38. Who uses affiliate marketing
  39. 39. Biggest Verticals1 Financial services2 Travel3 Retail4 Telecoms5 Broadband6 Gaming7 Recruitment Slide 41
  40. 40. Some familiar brands...
  41. 41. Entertainment...
  42. 42. Telco
  43. 43. Online gaming...
  44. 44. Recruitment...
  45. 45. IT/Software...
  46. 46. To Summarise Merchant Affiliates Network Consumers
  47. 47. How does this apply to you? Slide 50
  48. 48. Types of Affiliate CampaignsMerchant objectives are varied... 1 Sales 2 Downloads – music / promtional code 3 Online form completion – insurance quote/laser eye surgery 4 Email acquisition – qualified email address for database 5 Sign up / subscriptions – competitions/prize draws 6 Free samples – beauty, mailing address 7 Account acitvation – gaming sites/ banks Slide 51
  49. 49. Types of Affiliate Programs CPA CPL CPC
  50. 50. Types of Affiliate ProgramsDescription CPA CPC CPL Cost per acquisition/sale Cost per click Cost per leadYou pay for Sales Clicks Contact details building customerBest for: brand awareness & sales traffic driving databaseCreative requirements: Price led offers Call to action CompetitionPublishers like variation in formats potential revenue Variation in formats High conversions High Click through rates Sticky content No purchase necessaryPublishers dislike Reliance on your: Reliance on your: - Product - Creative Appeal of offer - Sales process - Strong call to action Sharing user data - Ability to convert online - Use of CPM inventoryTesting required? YES YES NO
  51. 51. Social affiliateCost per click- Social Ads on Facebook. These ads can bemicro-targeted, there is no “Like” feature here.Cost per Like- Social ads and sponsored stories that aremicro-targeted. The likes are published as socialinteractions into the newsfeeds of users. A user canadditionally like a Facebook page after click through.Cost per connect- using Facebook Connect button, givesaccess to certain user information. The user double opts-into allow access to the information requested by theadvertiser, whether it’s basic user info or more detailed likee-mail address and access to their calendar.Cost per download/lead/action- offers are distributed in-game to drive CPL, CPA, and CPI in exchange for FacebookCredits. Slide 54
  52. 52. 4 Questions to ask myself?
  53. 53. When to use Affiliate Marketing? 3. Do you 2. Are you want to grow selling B2C your online products or sales by 15 - services? 20%? 4. Do you 1. Is your want towebsite e- deliver sales orCommerce leads to your ready? Affiliate call centre? Marketing
  54. 54. 5 Steps to creating your affiliate programme Soft launch, Go Live Provide collateral & test Identify suitable affiliates Integrate pixel tracking Set commission levels
  55. 55. Step 1: Set your commission levels• Guidelines for CPA:• Can be set amount or % commission• Should be approx. 50% of your profit after costs• Need to incentivise the publishers
  56. 56. Step 2: Integrate pixel tracking• Pixel tracking software tracks: - The source of the traffic - The number of impressions - The number of clicks - Time and date of activity - No consumer data is captured
  57. 57. Step 3: Identify suitable publishers• Who is your target market?• What sites do they frequent?• Broad reach / high volume sites?• Niche targeted sites?• Existing off line relationships?
  58. 58. Step 4: Provide ammunition / collateral• Banner ads IAB standard unit sizes• XML feeds• Text links• Logos• Price led offers• WidgetsAutomate as much as possible
  59. 59. Step 5: refresh your creative• Use dynamic content where possible (XML)• Update offers frequently – keep them fresh• Use appealing images (easy for travel)• Use special offers and discounts to achieve a high CTR
  60. 60. Affiliate program charges vary• Network over-ride Charges- Typically 30% of affiliate commission• Set up- Technical Integration- Between Zero to €1,500• Monthly Management Fee-Typically between €250 - €1,000 PM
  61. 61. Step 1: Set your commission levelsGuidelines for CPA:Work out life time value of a customerDMA (direct marketing association) estimate that one qualified contact on an email database generates on average 2.7 SALES over a 18 month period. CPLs range from €3 - €50 depending on industry
  62. 62. Creative Examples Souls email Slide 65
  63. 63. Conversion – its up to youPricing Publisher’sSite usability that see results willLook and feel give you moreBrand prominenceRelevant content / deep linkingSimple Booking/sale process
  64. 64. Key BenefitsCPA SEO ROI Cost Drive Effective Brand RevenueCustomer VisibilityAcquisition Measurable Achieve Only Pay high for Sales Transparent Rankings
  65. 65. Case Study• Type: Pan European CPA• Focus: Online Sales• Regions:10• Length of Program: 11 years• Number of Events: 8• Bonus/Tariffs: Varied between events• Irish Affiliates working on the program: 210• Yearly Sales Slide 68
  66. 66. Case Study• Type: UK & Ireland CPA• Focus: New online Shoppers• Regions:2• Length of Program: 11 years• Number of Events: 10• Bonus/Tariffs: Varied per program• Figures to date 2011 : Clicks 18M, Sales 653K, Cart Value £56M Slide 69
  67. 67. Case StudyType: Lead Generation CPCRegions: 1Length of Program: 8 weeksNumber of Events: 1Bonus/Tariffs: €1.75CPCTargets: 500 =clicks per month Slide 70
  68. 68. Case StudyType: Lead Generation CPLRegions: 1Length of Program: 1 yearsNumber of Events: 1Bonus/Tariffs: €7 CPLTargets: 500 per month Slide 71
  69. 69. Breakout Session
  70. 70. Summing Up1. Know the value of a sign up/sale in order to set commissions2. Make it worth it for the publisher3. Its up to you to convert traffic to sales!4. Review & refine5. Don’t view it short term – integrate into marketing plan
  71. 71. 4 Key Elements Merchant AffiliatesNetwork Consumers
  72. 72. 3 Key BenefitsCPA SEO ROI Cost Drive Effective Brand RevenueCustomer VisibilityAcquisition Measurable Achieve Only Pay high for Sales Transparent Rankings
  73. 73. Open Forum?
  74. 74. Daniel Desmond Sales Director @danielmdesmond +353 86 7852345 Slide 77
  75. 75. Retargeting Example Slide 78
  76. 76. Retargeting Slide 79