1. Affiliate Marketing David Herscott Managing Partner, NetX @dherscott 6/14/2011

2. AFFILIATE MARKETING Warm up What is it Industry trends Top do’s Top don’ts

3. WARM UP WARM UP

4. AFFILIATE MARKETING OVERVIEW WHAT?

5. WHO? More than 20,000 brands have affiliate programs

6. MARKET SIZE US affiliate revenue: larger than video, social & mobile combined Forrester 2009

7. THE SKINNY About 300,000 “active” affiliates in the US About 30,000 affiliates drive the bulk of the sales in the industry About 3,000 affiliates drive more than 70% of sales in most categories Had a reputation as the least “professional” practitioners on the DR side – reputation is changing, less of a “cottage industry” in recent years

8. THE AFFILIATE ECOSYSTEM Affiliate Network Program Manager Advertiser Manages the program on the advertisers behalf. Can be an agency, an OPM or the Network. The marketplace, the third party tracking system & the back office. Publishes content, a virtual sales team that makes money on commission. YOU. SHAMELESS SELF PROMOTION

9. FIVE TYPES

10. LOYALTY

11. COUPON

12. SEARCH (ARBITRAGE) Advertiser/Agency Affiliate Competitor

13. COMPARISON

14. CONTENT

15. THE SALES PITCH Most efficient channel Only surpassed by marketing to in-house lists Fixed margin Advertiser sets the cost per action Scalable Tech enables programs to grow without cost increases Quality of customers Affiliates drive customers of equal value to other marketing channels 100% accountable No dollar is wasted

16. INDUSTRY TRENDS

17. INDUSTRY TRENDS - ADVERTISERS While B2C programs dominate, there are more & more B2B programs 2010 Affiliate Benchmarks Study

18. INDUSTRY TRENDS - ADVERTISERS Affiliate marketing has only recently become mainstream 2010 Affiliate Benchmarks Study

19. INDUSTRY TRENDS - ADVERTISERS Over 60% of advertisers have less than 3,000 affiliates in their program 2010 Affiliate Benchmarks Study

20. INDUSTRY TRENDS - ADVERTISERS While hard to read  affiliate marketing is prevalent in most industries 2010 Affiliate Benchmarks Study

21. INDUSTRY TRENDS - ADVERTISERS Approximately half of all affiliate programs are managed internally 2010 Affiliate Benchmarks Study

22. INDUSTRY TRENDS - ADVERTISERS Over 60% of advertisers feel their program meets or exceeds expectations 2010 Affiliate Benchmarks Study

23. INDUSTRY TRENDS - ADVERTISERS Affiliate marketing is responsible for approximately ¼ of online sales 2010 Affiliate Benchmarks Study

24. INDUSTRY TRENDS - ADVERTISERS Advertisers approach search arbitrage in different ways 2010 Affiliate Benchmarks Study

25. INDUSTRY TRENDS - ADVERTISERS Customer “quality” is equal to, or better than other online channels 2010 Affiliate Benchmarks Study

26. INDUSTRY TRENDS - PUBLISHERS Affiliates care about commission, but they also care about reputation… 2010 Affiliate Benchmarks Study

27. INDUSTRY TRENDS - PUBLISHERS Promotional space is key, and there isn’t a lot of it… 2010 Affiliate Benchmarks Study

28. INDUSTRY TRENDS - PUBLISHERS The network you are on matters to affiliates… 2010 Affiliate Benchmarks Study

29. INDUSTRY TRENDS - PUBLISHERS Affiliates rely on you/your agency as the way to learn about your program 2010 Affiliate Benchmarks Study

30. INDUSTRY TRENDS - PUBLISHERS Successful affiliates are buying search traffic 2010 Affiliate Benchmarks Study

31. DO

32. Make sure you are offering competitive commissions

34. Cartera

35. Vesdia

37. Network tracking in place (CJ, Linkshare, GAN)

38. Nice to have

39. Consider a UCT (universal container tag)

40. Establish KPIs

42. Perform spot checks

43. DON’T

45. Offer seasonal sales contests

46. Press the flesh

47. Pick up the phone

50. Consider a budget for placements

52. Understand attribution

54. Thank You David Herscott Managing Partner, NetX david@netx.com 212.981.2700 @dherscott www.linkedin.com/in/herscott Affiliate Marketing