Online Retailer Presentation - August 2009


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Presentation at the 2009 Online Retailer Conference about the key rules around affiliate marketing and working with an affiliate network if you're an online retailer.

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Online Retailer Presentation - August 2009

  1. 1. Affiliate Marketing Online Retailer August 2009 Matt Bateman
  2. 2. Agenda <ul><li>Affiliate Marketing explained </li></ul><ul><li>The Australian Marketplace </li></ul><ul><li>Why do you need an affiliate program? </li></ul><ul><li>Network vs individual affiliates </li></ul><ul><li>Rules for building a successful affiliate marketing program </li></ul><ul><li>Case Studies – success in online retailing </li></ul>
  3. 3. Let’s start with a definition <ul><li>Affiliate Marketing is: </li></ul><ul><li>Revenue sharing between online advertisers/merchants and online publishers/salespeople, whereby compensation is based on performance measures, typically in the form of sales, clicks, registrations, or a hybrid model. </li></ul>
  4. 4. In the beginning...Amazon Affiliate Program
  5. 5. Affiliate Network
  6. 6. Affiliate marketing in Australia CPA RETAIL/CPS CPC/CPL SEARCH – SEO AND PPC 10 10 10 10 Quality Volume
  7. 7. Performance Marketing <ul><li>Natural decentralization of Ad Spend online </li></ul><ul><li>Increasing number of Ad spend going to Search, Ad Networks, and Performance/Affiliate </li></ul><ul><li>‘ Portal’ strategies now being replaced by: </li></ul><ul><ul><li>Ad Networks (AdConion, Drive PM, 3Di) </li></ul></ul><ul><ul><li>Ad Exchanges </li></ul></ul><ul><ul><li>Affiliate networks </li></ul></ul><ul><ul><li>Diversified Performance strategies </li></ul></ul>
  8. 8. Affiliate Marketing & online retailers – foundation principles
  9. 9. Affiliate Marketing Principles <ul><li>Low-risk advertising - pay commission on a sale, rather than the click at a guaranteed % commission rate </li></ul><ul><li>Get access to a range of Web sites for advertising rather than having a number of individual relationships </li></ul><ul><li>Get centralised tracking and management of creative </li></ul>
  10. 10. Some Basic Rules
  11. 11. What can you afford to pay to acquire a customer ? <ul><li>The margin available is absolutely key, and is different across categories </li></ul><ul><ul><li>Travel and Whitgoods can start @2-5% </li></ul></ul><ul><ul><li>Online Florists range is from 10-15% </li></ul></ul><ul><li>Factor in lifetime value of a customer and likelihood of repeat business </li></ul><ul><li>Err on the generous side for affiliates </li></ul>
  12. 12. 3Ts and an A <ul><li>Trust </li></ul><ul><li>Transparency </li></ul><ul><li>Truth </li></ul><ul><li>Accountability </li></ul>Source: Lee Hopkins 2009 – Better Communication Results
  13. 13. Remember the 4 Ps <ul><li>Price </li></ul><ul><ul><li>Test, niche, less than offline </li></ul></ul><ul><li>Place </li></ul><ul><ul><li>Where are your customers? - Search, affiliates, newsletters, social </li></ul></ul><ul><li>Promotion </li></ul><ul><ul><li>FREE works </li></ul></ul><ul><ul><li>WIN works </li></ul></ul><ul><ul><li>Recommendations work </li></ul></ul><ul><ul><li>Special offers work – with clients and affiliates </li></ul></ul><ul><li>Product </li></ul><ul><ul><li>Make sure you shop yourself, keep developing - UVP </li></ul></ul>
  14. 14. Is your product right for the affiliate channel? <ul><li>Does your product suit online sales? </li></ul><ul><li>Have you got a reasonable margin, so that you can pay a commission that will motivate a publisher to run your ads, and feature your products on your site? </li></ul><ul><li>Is it relatively commoditised </li></ul>
  15. 15. UVP – Unique Value Proposition
  16. 16. The Amazon UVP has expanded
  17. 17. Amazon Tools
  18. 18. Amazon Ctd
  19. 19. Optimise your site <ul><li>Landing pages </li></ul><ul><li>Test, Test and Test </li></ul><ul><li>Good usability principles </li></ul><ul><li>Continue to test </li></ul><ul><li>Easy ordering process and follow up </li></ul><ul><li>Reviews </li></ul><ul><li>Change creative regularly </li></ul><ul><li>Datafeeds </li></ul>
  20. 20. Give Great Customer Service <ul><li>There is no reason online customer service shouldn’t match that of bricks and mortar retailers </li></ul><ul><li>With Twitter, IM, IVR and the plain old telephone, there is no excuse not to give good customer service </li></ul>
  21. 21. Work with genuine partners <ul><li>Never work with someone who can’t tell you where the traffic is coming from </li></ul><ul><li>Never use a Search agency who won’t tell you what keywords they’re using </li></ul><ul><li>Get educated </li></ul><ul><li>Get references </li></ul>
  22. 22. Be engaged <ul><li>Affiliate Marketing is about doing lots of little things right </li></ul><ul><li>It is not easy, but can be very rewarding </li></ul><ul><li>You need to be on top of your reports and have a relationship with your partners </li></ul><ul><li>Analytics </li></ul>
  23. 23. Rules around Search <ul><li>Understand what you’re buying in Search </li></ul><ul><li>Search is crucially important to any eTailer, but you need to understand what you’re buying </li></ul><ul><li>Does last click win? </li></ul><ul><li>Are you optimising properly? </li></ul><ul><li>Using Super-affiliates and rule around what they can search on – closed networks </li></ul>
  24. 24. Work with Super affiliates
  25. 25. Dos and Don’ts of working with networks <ul><li>DON’Ts </li></ul><ul><li>DON’T sign an exclusive contract – it is advertising, you should have choices </li></ul><ul><li>DON’T let your search provider run your affiliate program </li></ul><ul><li>DON’T ‘set and forget’ </li></ul><ul><li>DON’T work with a network that isn’t transparent and won’t return calls </li></ul><ul><li>DOs </li></ul><ul><li>Do trial different networks </li></ul><ul><ul><li>But, have clear rules in place </li></ul></ul><ul><li>DO Have clear metrics in place – understand what success looks like </li></ul><ul><li>DO Establish a relationship with super-affiliates </li></ul><ul><li>DO Work with a transparent network </li></ul>
  26. 26. Don’t underestimate the power of email <ul><li>Pareto Principle – don’t always hunt new customers </li></ul><ul><li>Relevant email communications work – newletters, special offers </li></ul><ul><li>Test building an external database on a Cost-Per-Lead basis </li></ul><ul><li>Use professional email tools like Campaign Master – </li></ul><ul><li>Any money spent will be a huge saving downstream </li></ul>
  27. 27. The power of email
  28. 28. What does an affiliate publisher look like?
  29. 29. A comment on E-Commerce in Australia
  30. 30. A comment on E-Commerce in Australia <ul><li>Where are the major retailers online? </li></ul><ul><li>How do we get them to engage online? </li></ul><ul><li>The Avis model... </li></ul>
  31. 31. New revenue streams – Facebook Advertising as a traffic driver <ul><li>200 apps </li></ul><ul><li>In 1 weekend </li></ul><ul><li>18 Apps for </li></ul><ul><li>platinum cards in one week </li></ul>
  32. 32. CASE STUDIES
  33. 33. Strawberrynet – Sales Campaign Objective – To drive sales of women’s cosmetics and men’s grooming products Delivery Channel – C ombination of targeted eDM, banner placement and search, through s elected affiliates within the Viva9 network. Affiliates were paid on a Commission basis based on sales. Results – Achieved in excess of $1 million in sales on a monthly basis Campaign Examples
  34. 34. Other success stories
  35. 35. Resources <ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul>
  36. 36. QUESTIONS?
  37. 37. <ul><li>Matt Bateman </li></ul><ul><li>MD – Viva9 </li></ul><ul><li>Level 2, 62-64 Riley Street </li></ul><ul><li>East Sydney </li></ul><ul><li>Ph: (02) 9368 6850 </li></ul><ul><li>Email: [email_address] </li></ul><ul><li>Twitter: viva9australia;matthieub </li></ul>Contact:
  38. 38. Mobile? <ul><li>Mobile advertising is estimated to be a A$5m market in 2009 </li></ul><ul><li>Even in the US, mobile affiliate is still very slow in getting off the ground </li></ul><ul><li>Some interesting companies in the space: </li></ul><ul><ul><li>ADMob </li></ul></ul><ul><ul><li>Pudding Media – behavioural targetting and advertising </li></ul></ul><ul><li>Drew Ianni (chairman of Ad-Tech) </li></ul><ul><ul><li>‘ 2009 is not the year for mobile advertising’ </li></ul></ul>
  39. 39. The Ripple Effect in Social Networks Laurel Papworth Presentation – affili@syd 2009