SlideShare a Scribd company logo
How affiliate
marketing
works
On today's
agenda:
MAIN TOPICS
Response to Brief:
• What is affiliate marketing?
• Benefits of working with affiliates
• Promotional types
• How an affiliate program works
• Key performance metrics
• Q&As
What is affiliate
marketing?
Definition
Affiliate marketing - definition
“Affiliate marketing is a type of performance-
based marketing in which a business rewards one
or more affiliates for each visitor or customer
brought by the affiliate's own marketing efforts.”
Affiliate marketing – via Commission Junction
See the link here:
https://www.youtube.com/watch?time_continue=80&v=0t2R8qp3N4c&feature=emb_logo
Affiliate marketing players:
New Look
Publishers
Advertiser
Advertisers sell products, experiences, and services,
rewarding publishers for driving desired results.
Publisher
Publishers engage consumers through a variety of distribution
models including websites, social media, search, email, mobile
apps, offline marketing and more.
Network
Offers tracking and reporting technology to help record
leads/sales generated by the publisher. The advertiser as a result
is able to track results and reward publishers according to set
commissions.
The
customer
pretty self-explanatory
How an affiliate
program works?
How does it work?
Affiliates drive traffic to an advertiser’s site and in turn the advertiser pays a commission if that
traffic completes a desired action
Tracked Sale,
Affiliate
Commission
Publisher site
Product Catalogue Page
(multi-product listing)
Product Description Page
(single product listing)
How sizeable is affiliate marketing?
15% - 25% of the total digital media advertising revenue is attributed to affiliate marketing*.
In 2017, Affiliate Marketing generated £8.9 billion sales, up 9.2% year-on-year (Internet
Advertising Bureau, UK)
* Stats as of 2020, May via Business Insider
Affiliate marketing is generally counted as second most popular channel after search that
helps improve conversion rates and boost customer loyalty.
81% of marketers and 84% of publishers leverage the power of affiliate marketing.
Industry spend by sector:
* Source: IAB
Benefits of working
with affiliates
Industry spend by sector:
* Source: IAB
Clear ROI
The only channel allowing
sales validations: profit-
orientated
Only pay when you get a sale
Leverage a range of strategies
from category to product-
focus
Work with a wide variety of
sites and promotional types
Flexible payment methods
Affiliates are able to enhance any
purchase funnel: from single to
multi-touch
Awareness & Brand building
Targeted Audiences
Who are affiliates?
Meet key global publishers
Key players:
* Source: IAB
Cashback
Voucher Code
Loyalty
Employee Benefits
Who are Affiliates?
Eg. Affiliates acquiring new customers - Lighting-direct.co.uk
Affiliate offer type: £10 off on sign up - Lights.co.uk
Affiliate Programme type- Lights.co.uk
Key performance metrics
• Clicks – Traffic driven by publisher to the site
• Conversion – how many of these visits results in sales- the quality of affiliate
traffic?
• AOV – How can we encourage customers to spend more?
• COS – Cost of sale for the activity
• New Vs Existing – what % are new and returning
• Product level performance – Specifically what products are selling and which
category's
Clicks COSConversions
AOV New VS ExistingProduct level
Sum up
KEY BENEFITS
15-25% of total digital
media revenue
Multi-touch, cross-
device and all purchase-
funnels enhancement
The only digital channel
profit orientated: growth
marketers’ secret tool
Q&A
THANK YOU

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How Affiliate Marketing Works via STEPP Digital

  • 2. On today's agenda: MAIN TOPICS Response to Brief: • What is affiliate marketing? • Benefits of working with affiliates • Promotional types • How an affiliate program works • Key performance metrics • Q&As
  • 4. Affiliate marketing - definition “Affiliate marketing is a type of performance- based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate's own marketing efforts.”
  • 5. Affiliate marketing – via Commission Junction See the link here: https://www.youtube.com/watch?time_continue=80&v=0t2R8qp3N4c&feature=emb_logo
  • 6. Affiliate marketing players: New Look Publishers Advertiser Advertisers sell products, experiences, and services, rewarding publishers for driving desired results. Publisher Publishers engage consumers through a variety of distribution models including websites, social media, search, email, mobile apps, offline marketing and more. Network Offers tracking and reporting technology to help record leads/sales generated by the publisher. The advertiser as a result is able to track results and reward publishers according to set commissions. The customer pretty self-explanatory
  • 8. How does it work? Affiliates drive traffic to an advertiser’s site and in turn the advertiser pays a commission if that traffic completes a desired action Tracked Sale, Affiliate Commission Publisher site Product Catalogue Page (multi-product listing) Product Description Page (single product listing)
  • 9. How sizeable is affiliate marketing? 15% - 25% of the total digital media advertising revenue is attributed to affiliate marketing*. In 2017, Affiliate Marketing generated £8.9 billion sales, up 9.2% year-on-year (Internet Advertising Bureau, UK) * Stats as of 2020, May via Business Insider Affiliate marketing is generally counted as second most popular channel after search that helps improve conversion rates and boost customer loyalty. 81% of marketers and 84% of publishers leverage the power of affiliate marketing.
  • 10. Industry spend by sector: * Source: IAB
  • 12. Industry spend by sector: * Source: IAB Clear ROI The only channel allowing sales validations: profit- orientated Only pay when you get a sale Leverage a range of strategies from category to product- focus Work with a wide variety of sites and promotional types Flexible payment methods Affiliates are able to enhance any purchase funnel: from single to multi-touch Awareness & Brand building Targeted Audiences
  • 13. Who are affiliates? Meet key global publishers
  • 14. Key players: * Source: IAB Cashback Voucher Code Loyalty Employee Benefits Who are Affiliates?
  • 15. Eg. Affiliates acquiring new customers - Lighting-direct.co.uk
  • 16. Affiliate offer type: £10 off on sign up - Lights.co.uk
  • 18. Key performance metrics • Clicks – Traffic driven by publisher to the site • Conversion – how many of these visits results in sales- the quality of affiliate traffic? • AOV – How can we encourage customers to spend more? • COS – Cost of sale for the activity • New Vs Existing – what % are new and returning • Product level performance – Specifically what products are selling and which category's Clicks COSConversions AOV New VS ExistingProduct level
  • 19. Sum up KEY BENEFITS 15-25% of total digital media revenue Multi-touch, cross- device and all purchase- funnels enhancement The only digital channel profit orientated: growth marketers’ secret tool