This document discusses setting up a performance marketing affiliate program. It covers whether to use an affiliate network or in-house tracking, and whether to manage the program internally or hire an outside program manager. Key aspects of the affiliate offer are explained, including commission types, cookie duration, and bonuses/coupons. The importance of researching competitors' programs is also highlighted. The document provides advice on the first steps of getting an affiliate program off the ground.

1. Performance Marketing
Getting your program off the ground, part 1
Jon Levine
Director of eCommerce
All Inclusive Marketing

2. Today You Will Learn
• Differences in how programs are run, in-house or network
• Pros and cons of different program management styles
• The importance of research when setting up a program
• Your offer and how to create it

3. • Jon Levine, Director of eCommerce for
All Inclusive Marketing
• Director of Marketing for several industry leading
companies over the last 14 years
• Launched and managed affiliate marketing programs
for different companies in
multiple categories
• Founded and launched three successful
online startups
• Featured speaker and panelist at ShareASale
ThinkTank!, SFIMA, and Affiliate Management Days
conferences and events
About Me

4. Agenda
Getting your program off the ground, part 1
• Building your affiliate program
• Networks vs. in-house
• Managing your affiliate program
• in-house?
• OPM?
• What you can expect to get out of a network
• Know your competition
• Do your competitors have affiliate programs?
• What types of offers do they have?
• Your offer
• How much do you pay out?
• How long do affiliates have to make a sale?
• What about other incentives like bonuses or coupons?

5. Network vs. In-House
The key to how affiliate marketing works is tracking. You have to know
where a customer came from in order to pay a commission to the
correct affiliate. There’s two ways this tracking can be done: in-house
or through an affiliate network.

6. Networks
Pros Cons
• Handles all tracking, payment and
tax implications of affiliate program
• Seen as a third-party impartiality
• Central repository for all program
terms, creatives and communications
• Robust tools for creating automated
commission schedules and bonus
campaigns
• Larger recruiting ground for finding
new affiliates for your program
• Increased costs. Networks charge
commissions on your commissions
• Program details are public and can
be seen by your competitors
• Larger networks have so many
affiliates that applications can
become overwhelming
• Network guidelines can sometimes
become restrictive, especially for
larger programs.

7. In-House Tracking
Pros Cons
• Diminishing costs that are not
ongoing
• Complete control over program
• Fully-customizable commission and
bonus structures
• Potentially higher payouts due to
decrease in costs
• All payments and taxes must be
handled by you
• No recruitment pool
• Need to create own area on
website to house program terms
and creatives
• Trust needs to be established due
to no third-party oversight

8. Not an Either/Or
You don’t have to choose one or the other. You can do both!
General Program Larger Affiliates
• Manages payments for larger
group of affiliates
• Access to a larger recruiting pool
• Keep costs down for affiliates bringing
in the most revenue
• Create better offer due to lower costs
• Create full-customized commission
schedules
For programs just starting out, I recommend going with a network.

9. Program Management
Just like the decision of where to run your program from, a network or in-
house, you also need to decide who is going to run your program.
Internal Person
or Team
OPM or
Outside Program Manager

10. Pros Cons
• No additional costs. Person already
on payroll
• Full control
• Completely integrated with all
systems and processes
• Knows company culture and brand
• Very accessible and available when
needed
• Less experienced than seasoned
affiliate manager
• Lack of relationships with affiliates
• Affiliate channel could take a
backseat to other tasks assigned
• May not see the value of affiliate
program, especially at the very
beginning
Program Management: Internal

11. Pros Cons
• Very experienced and can hit the
ground running
• Brings established relationships to the
table, usually with high-quality affiliates
• Completely dedicated to the program
• Can make recommendations for
different services or program
management styles that are better
suited for you
• As an outsider, not under your
complete control
• Unfamiliar with your brand and
culture
• May not be available immediately
• May not be able to see the big
picture due to company information
sharing restrictions
Program Management: OPM

12. Program Management: Networks
Some networks offer their own ‘program management features
May be helpful in addition to an in-house affiliate manager, especially at
the beginning
Not a replacement for a dedicated person, in-house or OPM

13. Your Offer
Your offer, also known as your commission rate, is what you’re going to pay
affiliates for transactions. There’s a few different kinds, but here’re the three main
ones.
Flat Fee
• One amount per
transaction
• Usually good for non-
monetary actions like
form completions
• Never pay out more
than fee amount
• Can dissuade bigger
affiliates looking for
more earning potential
Percentage
• Amount paid is based
on percentage of what
is sold
• Limitless earning
potential
• Incentivizes affiliates
to generate larger
sales
• Can be costly on
lower-margin items
Tiered
• Variable commission
based on levels
• Encourages larger
affiliates who are able to
generate more sales
• Incentivizes smaller
affiliates to become larger
ones and move up
• More complex to manage
because different affiliates
are making different
amounts
Your offer is based on many factors. Items such as program goals, profit margin, average customer
value and others come into play. Each program is unique and it’s something you’ll have to
determine for yourself.

14. Cookie Duration
No, not that kind of cookie.
The time between when
a click happens and
when a sale takes place
is called the cookie
duration
It’s called this
because a cookie is
‘dropped’ on the
customer’s
computer that acts a
timer
This can be however
long you choose,
from no duration at
all to one year or
more
This is a big part of
your offer and
something affiliates
take into
consideration

15. Bonuses and Coupons
Bonuses
• Can be used for sales
contests
• Can be a reward for
hitting specific
thresholds
• Can be used as a tactic
to get affiliates activated
• Can be part of a
‘signing bonus’ to get
affiliates to join
Coupons
• More of a customer-
facing tool
• Very active group of
coupon affiliates
• Incents both affiliates to
push sale and customer
to make a purchase
• Effective tool for
affiliates to use to drive
traffic

16. Know Your Competition
Affiliate networks are great for research. Signing up is free and you’re able
to research the other companies in your category and see what they offer.
Look at their offer and determine if it’s something you can meet or exceed
See that types of creative they offer and how long their sales window is
Examine their program terms and they do and do not allow
This is not about copying! This is about understanding your competition

17. Move The Needle

18. Move The Needle
• Figure out if you want to run your program through a network or
run it yourself internally
• Determine if you have a manpower and expertise to have an
employee manage your program or have an outside expert do it
• Examine your internal financials and decide how much you can
pay out in commissions
• Set your cookie duration and decide whether or not to include
any bonuses and/or coupons
• Take a look at other companies in the same category as you
that have affiliate programs
First Steps

19. • There are distinct advantages and disadvantages between
using an affiliate network or your own internal tracking systems.
Understand them and determine what’s right for your business.
• Managing an affiliate program can be a full-time job unto itself.
Do you have the people and talent on staff or should you bring
in outside help?
• How much can you pay out in commissions and still be
profitable? Look at all of the factors when creating your offer,
including network fees, bonuses and coupons.
• It’s almost guaranteed that your competitors have affiliate
programs. Figure out what they’re doing and do it better!
Key Takeaways

20. www.onlinemarketinginstitute.org
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