IDM Affiliate Marketing Short Course - November 2011

Affiliate Marketing Presentation

Who Am I?• 10 Years Affiliate Marketing

Experience• Eteach.com

– Managed affiliate programme

– Managed partnership deals

• Result Media Limited

Who Am I?• AffiliateFuture.co.uk

– 8 years– Managing Director– Managed key accounts such

as Virgin Atlantic, Thomas Cook, EUI, CarphoneWarehouse, Sun Bingo and Scottish Friendly

– 280,000 affiliates– Global presence

Building a Monster!www.moneybackmonster.com

Welcome – Who are you?

• Company• Position• Affiliate Marketing Experience – Programmes, networks, success• What your looking to get out of today?

Introduction To Affiliate Marketing

9.45am-10.30am

Introduction To Affiliate Marketing

Performance Based Advertising

‘You pay for the advertising ONLY when something happens’

Introduction To Affiliate Marketing

There is no risk (in theory!)

Introduction To Affiliate Marketing

Affiliate Merchant Tracking Solution

Any source of traffic

Publisher

Suppliers

Paying for an action

Advertiser

Technology

Network

Software Solution

Introduction To Affiliate Marketing

Introduction To Affiliate Marketing – Affiliate Types

• Affiliates Fit into 3 main types

– Content Affiliates• People visit due to the content provided by the affiliate

– Arbitrage• Buy traffic as you or to landing pages specifically aimed at

your or your products

– Professional Affiliates• Affiliate links are the content

Introduction To Affiliate Marketing – Content Websites

Introduction To Affiliate Marketing – Content Websites

Introduction To Affiliate Marketing – Content Websites

Introduction To Affiliate Marketing – Content Websites

Introduction To Affiliate Marketing – Content Affiliates

Introduction To Affiliate Marketing – Content Affiliates

Introduction To Affiliate Marketing – Arbitrage

Introduction To Affiliate Marketing – Arbitrage

Introduction To Affiliate Marketing – Professional Affiliates

Introduction To Affiliate Marketing – Professional Affiliates

Introduction To Affiliate Marketing – Professional Affiliates

Introduction To Affiliate Marketing – Professional Affiliates

Introduction To Affiliate Marketing – Professional Affiliates

Introduction To Affiliate Marketing – Professional Affiliates

Introduction To Affiliate Marketing – Professional Affiliates

Introduction To Affiliate Marketing – Professional Affiliates

Introduction To Affiliate Marketing – Merchants

• New Customer• Customer Retention• Leads• Brand Exposure• Market Mix Weakness

– Search Marketing• PPC• Natural Listings

Please note that there is no affect on your natural listings in the search engines

Profit

Objectives

Introduction To Affiliate Marketing - Merchants

• Payments– Cost per click (visitor)– Cost per sale (cost per acquisition)– Cost per lead– Hybrid deals– Tenancy arrangements– Revenue Share

• Merchants set the commissions

Introduction To Affiliate Marketing

A balanced affiliate programme should account for 10-20% of online transactions

•Brand Traffic – Type in traffic– Search engine

•Email Marketing– 3rd party– Newsletters

•Search Engine Marketing– Paid listings– Natural listings

•Advertising– Banners– Paid Content

•Social Media

Introduction To Affiliate Marketing – Tracking Solutions

• Third Party Network• Own tracking solution

Introduction To Affiliate Marketing

Figures ignore lead based programmes, adult industry and gambling sectors

Affiliate Marketing accounts for 7% of online business

Data Source IMRG, and Econsultancy.com

Online Sales Affiliate Sales

2008 £43.8bn £3.82bn

2009 £49.9bn £4bn

2010 £58.8bn £4.6bn

2011 £81bn

Introduction To Affiliate Marketing

Network Turnover

Digital Window (Awin/Buy.at) £65m

Tradedoubler £58m *includes search revenues

Commission Junction Unknown

OMG £16.7m

AffiliateFuture £15m

Webgains £9m

Affili.net £4.3m

Linkshare £1.8m

The largest programmes are not run with networks

Exercise Why Choose Affiliate Marketing

10.30am-11.15am

Planning a fully integrated affiliate marketing programme

11.30am-12.15pm

Planning an Affiliate Programme

Conflicts

Management & Staff

Technology

Wild West

“Next year we’ll reintroduce affiliate marketing, but as it should be. No silly commissions being paid to grubby little people in grubby studios growing income at our expense,

getting in the way of genuine sales” Nick Roberston CEO ASOS 2007

To make affiliate marketing work you must plan it and implement it properly or it will be an expensive lesson.

Planning an Affiliate Programme

Understand your current marketing strategy and plan where they will fit in.

• Content Affiliates are generally issue free– Creative– Copy– Thinking out of the box

• Shop whitelabels• Exclusive suppliers

Planning an Affiliate Programme

Understand your current marketing strategy and plan where they will fit in.

• Arbitrage Affiliates need rules!– What advertising are you doing?– What is the cost and value of your advertising? – Staff cost – salary & training– Can the affiliates do a better job?– Can the affiliates do a better job on part of the campaign?

• Ultimately a Google keyword has a value and a cost. How can you maximise this?

Planning an Affiliate Programme

• Compliment your activity

Planning an Affiliate Programme

Understand your current marketing strategy and plan where they will fit in.

• Professional Affiliates – The ‘wild west’ and they use your content– Voucher Codes – someone uses your voucher code, you give a discount and pay commission

to the affiliate– Feeds– Incentivises– Customising deals

Planning an Affiliate Programme

• Creative• Do you produce

internally?• Key size

– 468x60– 120x60– 120x600

• File Types

– Gif– Jpeg– Flash– HTML

• Issues– Call to action– No Urls– No Phone Numbers– Seasonality

Planning an Affiliate Programme• Treat your affiliates like a

sales team• Video Interviews with the

merchant• Marketing guides that are

both merchant and industry specific

• Branding guidelines• Examples of offline

promotions and advertising

• Additional creative resource

• Seasonality Charts• Frequently Asked

questions

Planning an Affiliate Programme

• Data Data Data• Product Feeds

– Product Names– Product Descriptions– Brands– Destination URLS

Don’t worry about duplicate content• Pricing Files

– Price– RRP– Delivery– VAT

• Voucher Code Feeds• Feed Types

– XML– CSV– Live – you are responsible for your data being correct

Planning an Affiliate Programme – Competitors

• Already Have Programmes• Commission Structures• Cookie Lengths• Consumer Offers• Incentives• Set-up

– Networks/Direct– Do they use an agency

• Resources

– Affiliate Manager– Regular Communications

Planning an Affiliate Programme - Affiliates

2 Top Level Groups• Key Affiliates – drive 80-90% of your programme• Long Tail Affiliates

• HitWise• Syntrax• Alexa• Google

Planning an Affiliate Programme

Planning an Affiliate Programme

• Affiliates Will Come To You• Define targets

– Who are your key affiliates– Number of affiliates– Traffic– Conversions– Sales– Spend

• Define Tracking & Reporting Requirements

Planning an Affiliate Programme

• Reporting Needs

– What do you need to report?• Internal KPIs

– Weekly/Monthly Reports– Annual budgets– Year on year changes

• Early warning system– Budgets– Stock issues

• Programme Optimisation/Monitoring– Spotting dropped affiliates– Poor Convertors– New affiliates

Planning an Affiliate Programme

• What if it goes wrong?– Too many sales

• Budget• No stock left

– Too few sales• Site doesn’t convert• Affiliates wont put up links

– Commission too low?– Competitors have better relations

• Affiliate take links down

Planning an Affiliate Programme

• What are you paying commissions on?– Including Vat (check your VAT rates)– Including Delivery– Product variations– Valid lead

• Are the Affiliates aware– Offer text– Communications

• Test Test and Test• It will break• You don’t want to reduce commissions

– However short term launch campaign works

Exercise – The network versus direct affiliate programme

12.05am-1.00pm

Technology

• Links – Cookies– Flash Cookies– Browser cache– Tracking references for affiliate

• Cookie Windows– Standard is 30 days

• Confirmation Page– Javascript – Image pixels– Pass order details

• Reporting Tools– Orders– Validate/Cancel Transactions– Assign commissions– Real-time

Technology

• Reliability– Links must not fail– Links must be ‘quick’– Browser compatibility– Reporting tools uptime– Cope with significant peaks and troughs

• De-duping– Last click wins

• Approving/Decline Affiliates– Brand protection

• Serving Banners• Providing Products Feeds• Customised Reporting

How To Choose Solution

• Cost

– Set-up costs• Hardware

– Monthly fees • Hosting Fees

– Override• Support

– Experience– Company Resources

How To Choose Solution

• Affiliates– Base– How attractive is your brand– Can they trust your solution

• Wont sign-up• Slow to test your programme

– All reporting requirements• Speed of launch

– Setting up technology– Setting up programme

How To Choose Solution

• Risk– Traffic through third party servers– You don’t own the data

• Control– Ability to customise the programme

Network or Self Managed - Networks

• There are 25/30 UK networks and growing rapidly• Many networks aren’t profitable

Do your Research!• Affiliates won’t work with all networks or directly with

you – Talk to them• Can the network handle your reporting needs?• Does the network have the technical infrastructure?• Is the network cost effective?• What are your competitors doing?• Overseas Reach

Network or Self Managed – Multiple Channels

• Running 2 networks or network and direct

• Advantages– Larger Reach

• Not all affiliates work on all networks• Some networks have own traffic

– Improve relations• Affiliates have preferred account managers and

networks• Often prefer client contact

– Build on lack of company resources

• Disadvantages– Cross tracking/Cost of technology– Admin time– Costs

Network or Self Managed – Multiple Channels

• Disadvantages– Cross tracking/Cost of technology

• Two commissions against one sale

– Admin time• Checking sales• Checking affiliates• Uploading creatives• Checking feeds• Approving affiliates• This can be automated

– Costs• Multiple set-up costs• Multiple monthly fees• Cross tracked sales

– No longer as profitable for a network• Networks want exclusivity

Network or Self Managed – Multiple Channels

• Disadvantages– Cross tracking/Cost of technology

• Two commissions against one sale

– Admin time• Checking sales• Checking affiliates• Uploading creatives• Checking feeds• Approving affiliates• This can be automated

– Costs• Multiple set-up costs• Multiple monthly fees• Cross tracked sales

– No longer as profitable for a network• Networks want exclusivity

Optimised Programme

2.00pm-2.45pm

Optimised Programme

• Not all affiliates are equal– Different conversion rates– Different basket values– Different volumes based on commissions– More profitable customers

• Higher proportion of returning customers

• Not all affiliates are good for you– Sales you’d have got already– Picking up sales that other channels would have converted– Having to pay large commissions to get the traffic

Optimised Programme

• The Buying Path– People usually have multiple touch

points when buying– Do you know every point each

customer touches– Certain website start the booking

process– Certain websites finish the booking

Optimised Programme

• Affiliate Marketing works on a last click wins the commission

– But would the booking have occurred without the first affiliate.

– What happens when you have other channels involved.

Optimised Programme

• The industry is confused– They want to apportion commissions but how….– You have to pay Google per click and you have to pay tenancy regardless.

• Best Practice– Include all your marketing channels and de-dupe to the last click– Don’t include your brand search campaigns– Don’t include your own newsletters.– Watch your bookings closely to ensure affiliates are being rewarded.

If the affiliate doesn't’t earn enough they will reduce your exposure or drop you. Move affiliate commissions to ensure they are happy. Some affiliates can increase volumes if you pay them more

Optimised Programme

• Voucher Codes– Paying commissions and provide a discount– Customers who are ready to buy go and find a

code (you can track this with an analytics tool)

– But would the consumer have actually purchased?

– Would they have used another retailer with a code?

– Voucher codes are big brands now– MyVouchersCodes.co.uk receive around 6

million visitor a month– Strict programme terms– Ensure you have your own page

Optimised Programme

• Incentive Sites– No margin issue (although savvy shoppers can find a voucher!)– Loosing customers who are ready to buy

Optimised Programme

• Don’t Cull Affiliates– If they are not active they maybe active later

• Sites Not Live– Don’t reject them they may not come back– Affiliates are busy, they may never come back– Who is the next facebook?– Some of the smaller affiliates send the best quality customers– Networks don’t always provide full details

• Affiliate have multiple sites• Some site are large and not easy find your adverts

Ready for Launch?

Stephen Pratley

Shine Marketing

Who Am I?.

• Affiliate since 1996• Building and marketing

ecommerce stores since 2000

• CRM Manager at ipoints until sale to Maximiles in 2006

• Shine Marketing: Marketing optimised ecommerce stores inc affiliate integration

Launch Checklist - Issues

Business Issues• Budgets• Over delivery• Under delivery• Branding Issues• Quality checking affiliates• Poor Conversion rates• Competitors taking action

Site Issues• Technical failures• Leakage• Site Changes

– Browser bugs– Tracking codes– Data feeds– Secure Checkout

• Poor Conversions

Conversion

• Commission– Commission %

– Average Value

– Conversion

– Rejections

Phone Numbers

Leakage

Leakage

Discount Codes

Checking Affiliates

Communicating With Affiliates

15:30-16:00

Affiliates are businesses.Businesses are people

Events

• A4U Expo– Annual trade event– Organised by A4U Forum

• Network managed Events– Often focused on

vertical sectors

• Run your own event– Show & Tell in store?

Forums

Blogs

Affiliate Extranet

• All your affiliate info in one place:• Banners& Creative• Policies• Offers

Affiliates will often search for:“[company] affiliate”

• Prezzybox good example

One to one contact is key:

Planning an Affiliate Programme – Best Practice

• Treat Affiliates with respect• Spyware/Adware Free• Ban Pop-Ups• PPC Restrictions• IAB Policies• Affiliate Network Policies

Combating Fraud

15:30-16:00

• PPC• Lead Generation• Breaching terms• Returns

Useful Resources

Useful Resource

• Forums– www.affiliates4u.co.uk– www.acorndomains.com– www.abestweb.com

• Blogs– www.pistol101.co.uk– www.stephenpratley.com– www.internetmarketingblogs.co.uk– www.pfft.co.uk– http://www.onelittleduck.co.uk/– Network Blogs

Useful Resource

• News– Econsultancy.com– Netimperative.com– Mashable.com– Nma.co.uk

• Twitter– @pistol101– @pistol101/affiliatemarketing

Questions & Answers