Affiliate Marketing<br />David Herscott<br />Managing Partner, NetX<br />@dherscott<br />6/14/2011<br />
AFFILIATE MARKETING<br />Warm up<br />What is it<br />Industry trends<br />Top do’s<br />Top don’ts<br />
WARM UP<br />WARM UP<br />
AFFILIATE MARKETING OVERVIEW<br />WHAT?<br />
WHO?<br />More than 20,000 brands have affiliate programs<br />
MARKET SIZE<br />US affiliate revenue: larger than video, social & mobile combined<br />Forrester 2009<br />
THE SKINNY<br />About 300,000 “active” affiliates in the US<br />About 30,000 affiliates drive the bulk of the sales in th...
THE AFFILIATE ECOSYSTEM<br />Affiliate<br />Network<br />Program Manager<br />Advertiser<br />Manages the program on the a...
FIVE TYPES<br />
LOYALTY<br />
COUPON<br />
SEARCH (ARBITRAGE)<br />Advertiser/Agency<br />Affiliate<br />Competitor<br />
COMPARISON<br />
CONTENT<br />
THE SALES PITCH<br />Most efficient channel<br />Only surpassed by marketing to in-house lists<br />Fixed margin<br />Adve...
INDUSTRY TRENDS<br />
INDUSTRY TRENDS - ADVERTISERS<br />While B2C programs dominate, there are more & more B2B programs<br />2010 Affiliate Ben...
INDUSTRY TRENDS - ADVERTISERS<br />Affiliate marketing has only recently become mainstream<br />2010 Affiliate Benchmarks ...
INDUSTRY TRENDS - ADVERTISERS<br />Over 60% of advertisers have less than 3,000 affiliates in their program<br />2010 Affi...
INDUSTRY TRENDS - ADVERTISERS<br />While hard to read  affiliate marketing is prevalent in most industries <br />2010 Aff...
INDUSTRY TRENDS - ADVERTISERS<br />Approximately half of all affiliate programs are managed internally<br />2010 Affiliate...
INDUSTRY TRENDS - ADVERTISERS<br />Over 60% of advertisers feel their program meets or exceeds expectations<br />2010 Affi...
INDUSTRY TRENDS - ADVERTISERS<br />Affiliate marketing is responsible for approximately ¼ of online sales<br />2010 Affili...
INDUSTRY TRENDS - ADVERTISERS<br />Advertisers approach search arbitrage in different ways<br />2010 Affiliate Benchmarks ...
INDUSTRY TRENDS - ADVERTISERS<br />Customer “quality” is equal to, or better than other online channels<br />2010 Affiliat...
INDUSTRY TRENDS - PUBLISHERS<br />Affiliates care about commission, but they also care about reputation…<br />2010 Affilia...
INDUSTRY TRENDS - PUBLISHERS<br />Promotional space is key, and there isn’t a lot of it…<br />2010 Affiliate Benchmarks St...
INDUSTRY TRENDS - PUBLISHERS<br />The network you are on matters to affiliates…<br />2010 Affiliate Benchmarks Study<br />
INDUSTRY TRENDS - PUBLISHERS<br />Affiliates rely on you/your agency as the way to learn about your program<br />2010 Affi...
INDUSTRY TRENDS - PUBLISHERS<br />Successful affiliates are buying search traffic<br />2010 Affiliate Benchmarks Study<br />
DO<br />
Make sure you are offering competitive commissions<br />
Establish relationships with the “big guys”<br /><ul><li>Upromise
Cartera
Vesdia
Vertive</li></li></ul><li>Set up reliable tracking<br /><ul><li>Must have
Network tracking in place (CJ, Linkshare, GAN)
Nice to have
Consider a UCT (universal container tag)
Establish KPIs
Dashboard reports</li></li></ul><li>Make room for negotiation<br />There are published rates and unpublished rates. Save t...
Perform spot checks<br />
DON’T<br />
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Affiliate Marketing Basics

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Affiliate Marketing Basics

  1. 1. Affiliate Marketing<br />David Herscott<br />Managing Partner, NetX<br />@dherscott<br />6/14/2011<br />
  2. 2. AFFILIATE MARKETING<br />Warm up<br />What is it<br />Industry trends<br />Top do’s<br />Top don’ts<br />
  3. 3. WARM UP<br />WARM UP<br />
  4. 4. AFFILIATE MARKETING OVERVIEW<br />WHAT?<br />
  5. 5. WHO?<br />More than 20,000 brands have affiliate programs<br />
  6. 6. MARKET SIZE<br />US affiliate revenue: larger than video, social & mobile combined<br />Forrester 2009<br />
  7. 7. THE SKINNY<br />About 300,000 “active” affiliates in the US<br />About 30,000 affiliates drive the bulk of the sales in the industry<br />About 3,000 affiliates drive more than 70% of sales in most categories<br />Had a reputation as the least “professional” practitioners on the DR side – reputation is changing, less of a “cottage industry” in recent years<br />
  8. 8. THE AFFILIATE ECOSYSTEM<br />Affiliate<br />Network<br />Program Manager<br />Advertiser<br />Manages the program on the advertisers behalf. Can be an agency, an OPM or the Network.<br />The marketplace, the third party tracking system & the back office.<br />Publishes content, a virtual sales team that makes money on commission.<br />YOU.<br />SHAMELESS<br />SELF PROMOTION<br />
  9. 9. FIVE TYPES<br />
  10. 10. LOYALTY<br />
  11. 11. COUPON<br />
  12. 12. SEARCH (ARBITRAGE)<br />Advertiser/Agency<br />Affiliate<br />Competitor<br />
  13. 13. COMPARISON<br />
  14. 14. CONTENT<br />
  15. 15. THE SALES PITCH<br />Most efficient channel<br />Only surpassed by marketing to in-house lists<br />Fixed margin<br />Advertiser sets the cost per action<br />Scalable<br />Tech enables programs to grow without cost increases<br />Quality of customers<br />Affiliates drive customers of equal value to other marketing channels<br />100% accountable<br />No dollar is wasted <br />
  16. 16. INDUSTRY TRENDS<br />
  17. 17. INDUSTRY TRENDS - ADVERTISERS<br />While B2C programs dominate, there are more & more B2B programs<br />2010 Affiliate Benchmarks Study<br />
  18. 18. INDUSTRY TRENDS - ADVERTISERS<br />Affiliate marketing has only recently become mainstream<br />2010 Affiliate Benchmarks Study<br />
  19. 19. INDUSTRY TRENDS - ADVERTISERS<br />Over 60% of advertisers have less than 3,000 affiliates in their program<br />2010 Affiliate Benchmarks Study<br />
  20. 20. INDUSTRY TRENDS - ADVERTISERS<br />While hard to read  affiliate marketing is prevalent in most industries <br />2010 Affiliate Benchmarks Study<br />
  21. 21. INDUSTRY TRENDS - ADVERTISERS<br />Approximately half of all affiliate programs are managed internally<br />2010 Affiliate Benchmarks Study<br />
  22. 22. INDUSTRY TRENDS - ADVERTISERS<br />Over 60% of advertisers feel their program meets or exceeds expectations<br />2010 Affiliate Benchmarks Study<br />
  23. 23. INDUSTRY TRENDS - ADVERTISERS<br />Affiliate marketing is responsible for approximately ¼ of online sales<br />2010 Affiliate Benchmarks Study<br />
  24. 24. INDUSTRY TRENDS - ADVERTISERS<br />Advertisers approach search arbitrage in different ways<br />2010 Affiliate Benchmarks Study<br />
  25. 25. INDUSTRY TRENDS - ADVERTISERS<br />Customer “quality” is equal to, or better than other online channels<br />2010 Affiliate Benchmarks Study<br />
  26. 26. INDUSTRY TRENDS - PUBLISHERS<br />Affiliates care about commission, but they also care about reputation…<br />2010 Affiliate Benchmarks Study<br />
  27. 27. INDUSTRY TRENDS - PUBLISHERS<br />Promotional space is key, and there isn’t a lot of it…<br />2010 Affiliate Benchmarks Study<br />
  28. 28. INDUSTRY TRENDS - PUBLISHERS<br />The network you are on matters to affiliates…<br />2010 Affiliate Benchmarks Study<br />
  29. 29. INDUSTRY TRENDS - PUBLISHERS<br />Affiliates rely on you/your agency as the way to learn about your program<br />2010 Affiliate Benchmarks Study<br />
  30. 30. INDUSTRY TRENDS - PUBLISHERS<br />Successful affiliates are buying search traffic<br />2010 Affiliate Benchmarks Study<br />
  31. 31. DO<br />
  32. 32. Make sure you are offering competitive commissions<br />
  33. 33. Establish relationships with the “big guys”<br /><ul><li>Upromise
  34. 34. Cartera
  35. 35. Vesdia
  36. 36. Vertive</li></li></ul><li>Set up reliable tracking<br /><ul><li>Must have
  37. 37. Network tracking in place (CJ, Linkshare, GAN)
  38. 38. Nice to have
  39. 39. Consider a UCT (universal container tag)
  40. 40. Establish KPIs
  41. 41. Dashboard reports</li></li></ul><li>Make room for negotiation<br />There are published rates and unpublished rates. Save the best (unpublished) rates for high volume, high profile publishers.<br />
  42. 42. Perform spot checks<br />
  43. 43. DON’T<br />
  44. 44. Don’t neglect your program<br />DO<br /><ul><li>Review applications
  45. 45. Offer seasonal sales contests
  46. 46. Press the flesh
  47. 47. Pick up the phone
  48. 48. Create a promotions calendar</li></li></ul><li>Don’t underestimate the importance of commissions<br />
  49. 49. Don’t have insufficient resources<br />DO<br /><ul><li>Actively manage your program
  50. 50. Consider a budget for placements
  51. 51. Refresh creative</li></li></ul><li>Don’t get tactical without seeing the big picture<br />DO<br /><ul><li>Yearly competitive review
  52. 52. Understand attribution
  53. 53. Analyze data - spot trends</li></li></ul><li>Don’t go silent - communicate!<br />
  54. 54. Thank You<br />David Herscott<br />Managing Partner, NetX<br />david@netx.com<br />212.981.2700<br />@dherscott<br />www.linkedin.com/in/herscott<br />Affiliate Marketing<br />

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