introduction to affiliate marketing - digital vidya webinar 12/2/2014

Copyright © 2014, iProspect Communicate 2, Inc. All rights reserved.

INTRODUCTION TO AFFILIATE MARKETING

Benedict HayesVice PresidentiProspect Communicate 2@benboombastic


iProspect: Driving Digital Performance.

1. What is affiliate marketing2. Why is it good for your

business3. How to set up an affiliate

program4. Rule setting5. Do’s and Don’ts6. Finding affiliates7. How to grow a network that

collectively prospers8. The tools and the

technologies involved

WHAT WILL WE LEARN TODAY



THE BASICS


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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

WHAT IS AFFILIATE MARKETING



• The Merchant– The brand or retailer

• The Network– A middle man between the affiliate and the brand. Often a software solution

provider.

• The Affiliate / Publisher– The guy driving the traffic that he wishes to be paid for

• The Customer– The unsuspecting customer who the affiliate attracts to the brand

• The Technology– The technology provider that is implemented to track affiliate performance,

manage creative, offers, outreach and automated payments

• The Agency– An agent brought in to manage all of the above and alleviate the client’s headache

THE KEY PLAYERS



THE MERCHANTSBrands, Retailers



THE NETWORKSAffiliate and Advertising Networks



THE AFFILIATESNetwork Affiliates | Aggregators | Direct Publishers

Anyone with

Networks Aggregators Publishers



Customer comes to the…

Affiliate, who sends the customer

to the…

Merchant, who facilitates an

action.

Customer does something;

lead, sale, download etc.

Merchant pays affiliate for the

action

Everyone is happy

BASIC AFFILIATE WORKFLOW



CPM: Cost per mille (1,000 impressions)

CPC: Cost per click

CPL: Cost per lead

CPA: Cost per acquisition

COA%: % of revenue (Cost of Acquisition)

CPE: Cost per email

CPV: Cost per Video View

CPD: Cost per download

EPC: Earnings per click

AFFILIATE JARGONS



SEO PPC Display

EDM Word of Mouth Social

Coupons Content Dark Arts

HOW DO AFFILIATES MAKE THEIR BUSINESS



Pay Per Anything• Pay affiliates for certain actions the

merchant customises

Pay Per Click• Raw: IP address may be counted twice• Unique: IP Address counted once• Blind: Unknown if raw or unique

Pay Per Sale• Percentage: Pay based on the size of sale• Flat: Pay equal for all sales• Graduated: Pay set in increments

Pay Per Visit• Pay affiliate for sending customers who

only look

Second Tier• Pay affiliates for recruiting other affiliates

Combination• Pay by a combination of Percentage, Flat

and graduated

STANDARD PAYMENT MODELS



• Indian affiliate models are still very nascent, but growing rapidly.

• Primarily take the form of lead generation. • In the more mature UK and US markets, where

eCommerce is common place +80% of the affiliate programs are tracked on the resultant sale.

• CPM, CPC as well as lead based models are becoming more obsolete

Just think as a brand would you rather guarantee business or site visits?

INDIAN AFFILIATE PROGRAMS



WHY AFFILIATE MARKETING

Affiliate

Sales

ROI

Scale

Branding

Reach

Opportunity



Communicate 2 CREATING A

PROGRAM



THE STEPS TO A PROGRAM CREATION

Decide how and what you want to

sell

Set-up a tracking and reporting

solution

Test and validate sales are tracking

Configure daily disposition reporting

Decide on the affiliate payout

Define a brand and affiliate guideline

Create a go-to market strategy

Build creative off the back of your

strategy

Empanel the affiliate

Give the affiliate creative with their unique Affiliate ID integrated to track

Affiliate publishes

On a monthly basis, take stock of sales

made by the affiliate validate and payout

Set payment cycles 30-60 days after

month end

Pay on time, never default or say

goodbye to the affiliate!

Test, Hone, Refine Build and generate sustainable ROI



SET UP A TRACKING SOLUTION



• To track a program you must know your route to sale

• If your sales are primarily converted offline then a lead based CPL model may work best

• If sales can be fully completed online then a % of revenue or CPA model will be best

PATH TO SALE

It is possible to have offline sales turned to a CPA model and % of revenue, but this will require far more sophisticated

tracking mechanisms in place. Call tracking and strong CRM systems.



• Referrer based– Links coming direct to the site

• Redirect based– Links coming via a tracking server

Principally they do the same thing though…

TWO MAIN TYPES OF TRACKING SOLUTIONS



Customer

1

TRACKING BASICS

Ad Unit

Affiliate

Tracking System

Merchant

1. Customer comes to the affiliate site

2. Clicks a banner3. Redirects to a

tracking server4. Tracking cookie

drops5. Customer is

redirected to Merchant

6. Customer buys7. Tracking server

marries cookie to sale

8. Once validated, merchant pays the affiliate commission for sale

23

4

5

6

78



• The crux of tracking revolves around two things:– The unique affiliate ID– The time of the delivery of the customer

visit

• Every affiliate will carry a unique ID, this ID will be paid out subject to the timing of the initial visit

TRACKINGYou generally don’t want to pay twice for things so…



First Click • The affiliate that delivered the first visit within a give timeframe

Last Click

• The affiliate that delivered the visit that directly resulted to the sale

Hybrid• Percentage paid to first click, middle and last click within

a given timeframe

Multi-tiered• Percentage paid out to the first / last click and the

affiliate that referred the affiliate that generated the sale

TIMINGS AND PAYOUTSThere are a number of tracked payout models:



• The most common cookie drop is a 30 day period

• 60 days can incentivize affiliates to deliver a lot more traffic

• Lifetime will mean all repeat business will also be paid out to the affiliate

COOKIE TIMESMost common set-ups



REPORTING



• Try to configure a system that gives the affiliate:– Daily real-time reports– Feed back mechanisms, Excel, API (This

can be tricky)– Content tracking for the affiliate

AFFILIATE REPORTING

The more data and feedback you give the affiliate, the more they can optimize and enhance their campaigns…

Limiting data limits what they can do!



• Using a network is a simple way to do this

• They have the systems and software to manage the program

• The disadvantage of using a network is that you have to pay for the software license as well as commissions on all payouts

• You are also limited to their affiliate base

NETWORK SYSTEMS



PAYOUTS



• Getting the payouts right can make or break your campaign

• Tiered payment structures where the big affiliates get big payouts usually work best i.e.

< 50 sales - Rs.200 / sale> 50 sales - Rs.225 / sale> 100 sales - Rs.250 / sale>500 sales - Rs.300 / sale

SETTING THE RIGHT PAYOUTS AND INCENTIVES



• Sign up for you competitor’s programs

• Assess their payouts• Can you do creative payment

structures that can entice their affiliates away from them?– Better incentives– Better promos– Better reporting

• Use your other marketing channels (PPC, FB, EDM) to assess an acceptable COA% or CPA%

• Price too low and you may not make it possible for your affiliate to monetize your program

KNOW YOUR COMPETITIONCreating the go-to market strategy



Path to sale:–Website Visit–Website Lead (Appointment)– Visit clinic– Diagnosis / free trial– Sign up for treatment

EXAMPLE PAYMENT MODELS 1:Dr Batra’s

ONLINE

OFFLINE

In this scenario affiliates could be paid on the leads. Post 90 days they receive a bonus for successful signups. Transversely

if they have a poor signup ratio they are booted from the program



Path to sale:–Website Visit– Buy online– C.O.D

EXAMPLE PAYMENT MODELS 2:Hewlett Packard

ONLINE

OFFLINE

In this scenario affiliates could be paid on any transaction. A percentage of sale would be most appropriate 3-5%. C.O.D sales will only be remunerated once the payment is made



Affiliates are as fickle as cats they will always go where the cream is richest!!

Always remember…



BRAND AFFILIATE GUIDELINES



What affiliates can or can’t do:• SEM / SEO?– Brand bidding– Competing

• Types of content they publish against• Language used• Association with other brands • Exclusivity• Miss-selling / Compliance• Mailers / Can or Can’t (Spam Watch)• The Dark Arts…

BRAND AFFILIATE GUIDELINES



• Brand Bidding• Day Parting 8-8• Cookie Bombing / Stuffing• Email Spamming• Content Spamming• Email Viruses / Trojans• Malware

AFFILIATE DARK ARTSBe aware, make provisions, you do not want your brand in the mud!



• Make sure you have very clear T&Cs that the affiliate is aware of and agrees to, this could be a web based form

• You will then need the following:– Name– Address– Contact Number– Email– Websites he plans to use for promotion– Payment details

• Cheque • Bank transfer

– Tax details PAN / TAN / VAT– Make sure you and your affiliate are aware of the tax

implications

EMPANELMENT



CREATIVE



• The more offers the better!• Give the affiliates ads that will sell:– Coupon codes–Money off– Bundles– Referrals

• Every product you wish to sell needs to have a creative unit.

• If you can dynamically generate creative based on SKU codes then nothing like it!

CREATIVE



• Manage your creative so that it encompasses the standard ad sizes

• Any site that carries ads has the potential to be an affiliate!

FORMATSStandard Web Sizes



FINDING AFFILIATES



• Create links on your homepage to the affiliate program

• Use PPC / SEO / Remarketing

• Start conversations on the affiliate message boards and forums– Chat up the affiliates directly– Use paid media to buy

targeted ad slots

METHOD ONEAdvertise your program



• Find content sites in your field that carry AdSense or other affiliate banners

• Approach directly with offers that are more lucrative than their AdSense payouts

• Sales revenue can sometimes be far greater than CPC payouts

• The bloggersphere would be great for this:http://www.google.com/blogsearch

METHOD TWODirect Approach

http://www.google.com/blogsearch





METHOD THREEPoach competition

• Use sophisticated link analysis software to understand your competitors affiliate base

• Tools that track upstream and downstream referral traffic will lead you to the good affiliate sources

• Use persuasive payment structures to directly snipe the affiliates away

• If they are good for your competitors they will be good for you ;)



• Sign up the networks

• Use analytics and reverse IP tracking systems to understand traffic source

• Isolate the big affiliate sites that drive value

• Approach independently outside of the Network

METHOD FOURPoach the networks



MAINTAINING A HAPPY AFFILIATE FAMILY



Don’t just set up a program and forget about your affiliates…They are cats and you must give them good cream!

• Talk to them:– Email updates– Give them offers– Festive specials

• Treat them:– Have meet ups give booze and food– Send them Diwali / Christmas gifts

• Engage with them:– Join the affiliate forums– Understand what the market is doing– Who is paying / not paying– Maintain your own reputation

MAKING AFFILIATES HAPPY



• Multi-tiered referral affiliate programs can lead to more affiliates joining

• Multi tiered means that if I refer a friend I also take a cut of the sales they deliver as my referral fees

• Affiliates know affiliates, this incentivises the affiliates themselves to drive the program

• If multi-tiered programs don’t work for you then try a CPA model for affiliate referrals

I.E. I refer a friend if that friend starts generating business you give me a one time reward.

REFERRAL PROGRAMS


““


VERY IMPORTANT!Be faithful to your affiliates, pay on

time!

PAYOUTSRaise any issue immediately.



SOFTWARE SOLUTIONS



• Pre built software will manage:– Tracking– Payouts– De-duplication– Sign-up / Empanelment– Creative management– Reporting– Email and communication–White labelling

WHY SOFTWARE



• Direct Track• PHG• AffiliatePro• AffiliateShop• AffiliateTracking.com• Commission Junction• RevResponse• AffiliateFuture• Clickinc• AffiliatesForAll

• Ultimate Affiliate• Share Results Tracking• ShareASale• LinkShare• MoreNiche• Affiliate Traction• iDevAffiliate• AvantLink• ClickBank

THE LEADING SOFTWARE SOLUTION PROVIDERS FOR AFFILIATE PROGRAMS

Very handy comparison Chart:http://www.aceaffiliates.com/affiliate-education/affiliate-marketing-software-solutions-review.html

http://www.directtrack.com/

https://www.performancehorizon.com/%E2%80%8E

http://www.postaffiliatepro.com/

http://www.affiliateshop.com/

http://www.affiliatetracking.com/

http://www.cj.com/

https://www.revresponse.com/%E2%80%8E

http://www.affiliatefuture.com/

http://clickinc.com/

http://www.affiliatesforall.org/

http://www.groundbreak.com/

http://www.shareresults.com/affiliate-software/affiliate-tracking.php

http://www.shareasale.com/

http://www.linkshare.com/

http://www.moreniche.com/

http://www.affiliatetraction.com/

http://www.idevdirect.com/

http://www.avantlink.com/

http://www.clickbank.com/

http://www.aceaffiliates.com/affiliate-education/affiliate-marketing-software-solutions-review.html





PRICING MODELSCombinations of…

Fixed Monthly Fee

Set-up fee

% of Payout

One-off fee



THE AGENCY MANAGED SERVICE

Our Proposition…

Affiliate Management

CPA Affiliate Network Base

`

Lead Generation

`

We Offer Two Core Affiliate Services

THE AFFILIATE PROPOSITION

• Affiliate network audit and consultancy

• Publisher recruitment & governance

• Strategy development and execution

• Network commercial negotiation

Our Core Services

Affiliate Management

The Affiliate Model

Affiliate Marketing at it very core is about relationships, a relationship between three parties…

ADVERTISER PUBLISHER CONSUMER

Diversify Traffic

Increase Exposure

Client Benefits of Affiliate Advertising

Incremental Revenue Channel

‘Pay on Performance’

Model

✓ ✓ ✓

✓ ✓ ✓

Develop New Partnerships & Relationships

IncreasedROI

Leveraging Public Networks

`2

Our 2 Core Affiliate Servicing Options

Public Publisher Base

Our Private network

`1

Private Publisher Base

• Private Network• Selected affiliate partners• Powered by own technology

• Public Affiliate Network• Access to thousands of affiliates• Managed by Partner Network

Performance Reporting


THANKSAny Questions?

Presented By:

Benedict HayesVP Strategy@benboombastic+91 961-901-1784

introduction to affiliate marketing - digital vidya webinar 12/2/2014

Marketing

affiliate performance

digital performance

affiliate creative

program iprospect

affiliate payoutdefine

affiliate publisher

affiliate guidelinecreate

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