Sme Tech Summit Presentation Viva9 V1.1


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Sme Tech Summit Presentation Viva9 V1.1

  1. 1. Performance Marketing Using affiliates and other online techniques to drive revenue and business Matt Bateman MD Viva9
  2. 2. Performance/Affiliate Marketing in Australia <ul><li>In the beginning </li></ul><ul><li>How does it work? </li></ul><ul><li>Different models </li></ul><ul><li>6 Simple rules of Performance marketing </li></ul><ul><li>Relationship with search </li></ul><ul><li>Arbitrage </li></ul><ul><li>Looking into the crystal ball </li></ul>
  3. 3. In the beginning...
  4. 4. Performance Marketing Model
  5. 5. Early Performance Models Focused on eCommerce
  6. 6. Traditional Cost Per Sale Model <ul><li>PROS </li></ul><ul><li>Guaranteed ‘can’t lose’ model for clients </li></ul><ul><li>End Consumer pays no more – commission included in sale price </li></ul><ul><li>Easy to explain and sell </li></ul><ul><li>‘ Environment’ less of a concern </li></ul><ul><li>CONS </li></ul><ul><li>Lower Margin </li></ul><ul><li>Lack of sophisticated publishers </li></ul><ul><li>Traffic becoming commoditised </li></ul><ul><li>Sometimes hard to drive volume </li></ul><ul><li>Less good for high-value products </li></ul><ul><li>Market Being driven bottom-up </li></ul>
  7. 7. Financial Model
  8. 8. Cost Per Lead/Cost Per Acquisition Models <ul><li>Cost Per Lead: </li></ul><ul><li>Qualified Lead into a database </li></ul><ul><ul><li>Phone leads </li></ul></ul><ul><ul><li>Direct email leads </li></ul></ul><ul><li>Can be as simple as First Name, Last Name, Email Address </li></ul><ul><li>Or as complex as ’25+ men in Rural NSW who don’t have Austar’ </li></ul><ul><li>One is obviously going to cost more than the other, as there is less incidence in the population and it’s harder to find them </li></ul><ul><li>Cost Per Acquisition - usually higher value – Credit Cards, Insurance customers, telco customers </li></ul>
  9. 9. Performance-Marketing
  10. 10. Performance Marketing Growth <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 driven by Search </li></ul></ul><ul><li>Lower barrier to entry to the market </li></ul><ul><li>More choice for advertisers, but also more confusion </li></ul>
  11. 11. Market by Segment in Australia – Affiliate in 2008
  12. 12. 2009 Affiliate Market Defined
  13. 13. IAB Report – Total Online Advertising
  14. 14. The Tail is no longer the tail – ‘affiliates’ are becoming sophisticated
  15. 15. The Cosmetics Club
  16. 16. Finance
  17. 17. 6 Rules for performance marketing
  18. 18. 1. WIN-WIN-WIN <ul><li>Publishers Care about EPC and ECPM </li></ul><ul><ul><li>In general categories, anything under $0.40c EPC is marginal </li></ul></ul><ul><ul><li>In Credit Cards, the benchmark EPC $3.50 up to $10 </li></ul></ul><ul><li>Networks and aggregators need volume and consistency </li></ul><ul><li>Clients want the performance marketing promise – ‘only pay if it works’ </li></ul><ul><li>It only works if it is genuinely a partnership between publisher/network/advertiser </li></ul>
  19. 19. Rule no. 2 - 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
  20. 20. Rule 3 - 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>Is it right for the performance channel </li></ul></ul>
  21. 21. Rule 4 Optimisation <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><ul><li>IF IT WORKS IN SEARCH, IT WORKS </li></ul>
  22. 22. Rule 5 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>Get educated </li></ul><ul><li>Get references </li></ul><ul><li>Affiliate/Performance Marketing is about doing lots of little things right </li></ul><ul><li>It is not easy, but can be very rewarding </li></ul>
  23. 23. 6 – Ensure you have rules around Search <ul><li>Understand what you’re buying in Search </li></ul><ul><li>Search is crucially important to any performance campaign, 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>Work with large publishers and have rules around what they can search on – closed networks </li></ul>
  24. 24. Dos and Don’ts of working with networks <ul><li>DON’Ts </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 large publishers </li></ul><ul><li>DO Work with a transparent network </li></ul>
  25. 25. Everybody Wants CPS <ul><li>Wouldn’t it be great if you could reduce everything to a cost-per-sale? </li></ul><ul><li>Key Question: ‘How well do my members know your brand/product?’ </li></ul><ul><li>Experience shows that the 3 RD COMMUNICATION has huge payout on eDM </li></ul><ul><li>WORK TOWARDS ECPS </li></ul>
  26. 26. Nightmares for a performance marketer <ul><li>The campaign does not convert </li></ul><ul><li>There is limitless budget, but we can’t fill it </li></ul><ul><li>We simply cannot find the audience the customer is after (often because it has been over-complicated) </li></ul>
  27. 27. The power of email and databases
  28. 28. 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>
  29. 29. Lifecycle of an eDM customer Initial Offer ‘ Chance to win’ ‘ Register for free’ $3 CPL un-targeted Profile Customer Commercial Rel’ship Continue conversation via Targeted eDM Build audiences Market to them Achieve end result – customer that buys
  30. 30. Models are changing <ul><li>Arbitrage on its own doesn’t work </li></ul><ul><li>Most networks are surviving by re-selling clicks and/or impressions </li></ul><ul><li>You need: </li></ul><ul><ul><li>Technology – eg Behavioural </li></ul></ul><ul><ul><li>Profiled Audiences and ways to reach them </li></ul></ul><ul><ul><li>Control over your own inventory </li></ul></ul><ul><ul><li>Add value on the strategy and planning side of things and are acting as virtual agencies </li></ul></ul><ul><li>Agencies need to be careful that if they don’t understand performance models, they might find themselves out of the conversation </li></ul>
  31. 31. A comment on E-Commerce in Australia
  32. 32. A comment on E-Commerce in Australia <ul><li>Major Retailers are beginning to migrate online </li></ul><ul><ul><li>Harveys </li></ul></ul><ul><ul><li>Bing Lee </li></ul></ul><ul><ul><li>Myer </li></ul></ul><ul><ul><li>David Jones </li></ul></ul><ul><ul><ul><li>Have all made some announcement about E-Commerce in the last 6 months </li></ul></ul></ul><ul><li>So far it has been a bottom-up push to E-Commerce and online sales </li></ul><ul><li>The traditional advertising models won’t work </li></ul><ul><li>Are large retailers ready to adapt? </li></ul>
  33. 33. 2010? <ul><li>Expect continued growth in the performance sector </li></ul><ul><li>There will be consolidation/changed business models </li></ul><ul><li>The year E-Commerce grows up in Oz? </li></ul><ul><li>What impact social? </li></ul><ul><li>Jury still out on mobile advertising </li></ul>
  34. 34. <ul><li>Matt Bateman </li></ul><ul><li>MD – Viva9 </li></ul><ul><li>Email: [email_address] </li></ul><ul><li>Twitter: viva9australia; </li></ul><ul><li>@matthieub </li></ul><ul><li>Please don’t forget </li></ul><ul><li>And if you get a chance, check out @kurtfearnley </li></ul>Contact:
  35. 35. CASE STUDIES
  36. 36. 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 Case Studies
  37. 38. The power of email
  38. 39. Crazy Sales