affiliate marketing

What is affiliate marketing?

Thursday, November 19, 2009

What if the restaurant gave you 10% of the bill of every friend you recommended it to?

They’d be paying you a finder’s fee.

Online, this is affiliate marketing.

What is affiliate marketing?


Affiliates: an extended sales force


“A performance based online marketer, sending targeted traffic to a specific website”


Who’s who?

Affiliate / Publisher• Sends targeted

traffic• Publishes adverts• Earns

commission

Merchant / Advertiser

• Wants targeted traffic

• Has products to advertise

• Pays commission on successful referrals


A brief history


Source: MarketingSherpa

2006: $6.5 billion paid!


The

step3process


The 3 step process


Performance based relationships

Action and Reward


CPL – Cost per Lead

CPA – Cost per Action


CPC – cost per click


e.g.

1 – 10 sales: 10% commission



51 or more sales: 15 % commission

Super Affiliate!

Revenue Share


The Key : Tracking


What is a cookie and how does it help?


http://www.firebox.com/product/1201

http://scripts.affiliatefuture.com/AFClick.asp?affiliateID=238&merchantID=214&programmeID=3897&mediaID=0&tracking=cube_world&url=http://www.firebox.com/index.html?dir=firebox&action=product&pid=1201&usg=AFQjCNGdHpzAasCefzDnyUBPxnagxqzvTA

Tracking in URLs









































A note on cookie periods and commission

1. Click to advertiser from network, affiliate

or search listing

3. Expose appropriate vendor based on

‘last vendor’ cookie

2. Fulfil transaction1st Click

2nd Click

3rd Click


A note on cookie periods and commission

1. Click to advertiser from network, affiliate

or search listing

3. Expose appropriate vendor based on

‘last vendor’ cookie

2. Fulfil transaction1st Click

2nd Click

3rd Click

Search Affiliate wins 100% of payout


Types of Affiliates


Search

Blogs

Wikis

Micro-blogging

IMPersonal portals

Social networks

Meta-search

DesktopUser-generated content

Soci

al s

hopp

ing

Product reviews

Social Bookmarks

Podc

asts


Personal Blogs and Web Sites


Niche content


Coupons and Promo sites


Email newsletters


Loyalty sites


Comparison


Social Applications


Search affiliates


Affiliates and Search

• Payment on CPA basis, not CPC

• Search marketing spend passed on to affiliates

• Greater keyword coverage


Affiliate Networks


“3rd party technical enablers, linking merchants, affiliates and their transactions”


Network benefits


• Tracking solutions & reporting

Network benefits


• Tracking solutions & reporting• Hosting creative

Network benefits


• Tracking solutions & reporting• Hosting creative• Recruiting merchants and affiliates

Network benefits


• Tracking solutions & reporting• Hosting creative• Recruiting merchants and affiliates• Quality control of affiliates and brand

compatibility

Network benefits



compatibility • One payment solution for merchants /

commission handling

Network benefits



compatibility • One payment solution for merchants /

commission handling• Tracking the market e.g. search

developments, new technology etc.

Network benefits


Some examples


Costs

• Usually no affiliate joining charge

• Merchant set up costs – followed by monthly fee (based on level of support)

• Set commission earned by affiliate


Basic Tools of the trade


Merchants : Product Feeds & Creative


Affiliates : Entire spectrum of web tactics


Setting up an Affiliate campaign


• Define the goal


• Define the goal

• Own programme vs. affiliate network


• Define the goal


• Competitor analysis


• Define the goal



• Test tracking software for possible conflict with existing tracking


• Define the goal



• Test tracking software for possible conflict with existing tracking

• Promote via forums or network


Tips in a performance market



1. Pay affiliates as much as possible




2. Focus on conversion optimization





3. Niche products can benefit





3. Niche products can benefit

4. Go global (if possible)


+ and -


Pros


Pros

• Merchants only pay when goals are achieved.


Pros


• Sales force and branding potential just got bigger


Pros


• Sales force and branding potential just got bigger

• Low barrier to entry for both affiliates and merchants.


Cons

• Loss of brand control.

• Affiliate programmes can be time consuming to manage, and often require dedicated staff.


affiliate marketing

Technology