Affiliate Marketing Online Retailer August 2009

Matt Bateman

Agenda Agenda

• Affiliate Marketing explained • The Australian Marketplace• Why do you need an affiliate program?• Network vs individual affiliates• Rules for building a successful affiliate marketing

program • Case Studies – success in online retailing

Let’s start with a definition Let’s start with a definition

• Affiliate Marketing is:

Revenue sharing between online advertisers/merchants and online publishers/salespeople, whereby

compensation is based on performance measures, typically in the form of sales, clicks, registrations, or a hybrid model.

In the beginning...Amazon Affiliate Program

Affiliate NetworkAffiliate Network

Affiliate marketing in AustraliaAffiliate marketing in Australia

CPA

RETAIL/CPS

CPC/CPL

SEARCH – SEO AND PPC

10

10

10

10

Quality

Volume

Performance Marketing Performance Marketing

• Natural decentralization of Ad Spend online• Increasing number of Ad spend going to Search, Ad

Networks, and Performance/Affiliate • ‘Portal’ strategies now being replaced by:

– Ad Networks (AdConion, Drive PM, 3Di)– Ad Exchanges – Affiliate networks– Diversified Performance strategies

Affiliate Marketing & online retailers –

foundation principles

Affiliate Marketing PrinciplesAffiliate Marketing Principles

• Low-risk advertising - pay commission on a sale, rather than the click at a guaranteed % commission rate

• Get access to a range of Web sites for advertising rather than having a number of individual relationships

• Get centralised tracking and management of creative

Some Basic Rules

What can you afford to pay to acquire a What can you afford to pay to acquire a

customercustomer? ? • The margin available is absolutely key, and is

different across categories – Travel and Whitgoods can start @2-5% – Online Florists range is from 10-15%

• Factor in lifetime value of a customer and likelihood of repeat business

• Err on the generous side for affiliates

3Ts and an A3Ts and an A

•Trust •Transparency •Truth•Accountability

Source: Lee Hopkins 2009 – Better Communication Results

Remember the 4 Ps Remember the 4 Ps

• Price – Test, niche, less than offline

• Place– Where are your customers? - Search, affiliates,

newsletters, social

• Promotion – FREE works– WIN works – Recommendations work– Special offers work – with clients and affiliates

• Product – Make sure you shop yourself, keep developing - UVP

Is your product right for the affiliate channel? Is your product right for the affiliate channel?

• Does your product suit online sales? • Have you got a reasonable margin, so that you can

pay a commission that will motivate a publisher to run your ads, and feature your products on your site?

• Is it relatively commoditised

UVP – Unique Value Proposition

The Amazon UVP has expanded

Amazon Tools

Amazon Ctd

Optimise your site Optimise your site

• Landing pages • Test, Test and Test• Good usability principles• Continue to test• Easy ordering process and follow up • Reviews • Change creative regularly • Datafeeds

Give Great Customer Service Give Great Customer Service

• There is no reason online customer service shouldn’t match that of bricks and mortar retailers

• With Twitter, IM, IVR and the plain old telephone, there is no excuse not to give good customer service

Work with genuine partnersWork with genuine partners

• Never work with someone who can’t tell you where the traffic is coming from

• Never use a Search agency who won’t tell you what keywords they’re using

• Get educated • Get references

Be engagedBe engaged

• Affiliate Marketing is about doing lots of little things right

• It is not easy, but can be very rewarding • You need to be on top of your reports and have a

relationship with your partners • Analytics

Rules around Search Rules around Search

• Understand what you’re buying in Search • Search is crucially important to any eTailer, but you

need to understand what you’re buying • Does last click win? • Are you optimising properly? • Using Super-affiliates and rule around what they

can search on – closed networks

Work with Super affiliates

Dos and Don’ts of working with networks

DON’Ts1. DON’T sign an exclusive

contract – it is advertising, you should have choices

2. DON’T let your search provider run your affiliate program

3. DON’T ‘set and forget’ 4. DON’T work with a

network that isn’t transparent and won’t return calls

DOs1. Do trial different

networks1. But, have clear rules in

place2. DO Have clear metrics in

place – understand what success looks like

3. DO Establish a relationship with super-affiliates

4. DO Work with a transparent network

Don’t underestimate the power of Don’t underestimate the power of

emailemail• Pareto Principle – don’t always hunt new customers • Relevant email communications work – newletters,

special offers• Test building an external database on a Cost-Per-

Lead basis • Use professional email tools like Campaign Master –

www.campaignmaster.com.au • Any money spent will be a huge saving downstream

The power of email The power of email

What does an affiliate publisher look like?

A comment on E-Commerce in Australia

A comment on E-Commerce in AustraliaA comment on E-Commerce in Australia

• Where are the major retailers online?

• How do we get them to engage online?

• The Avis model...

New revenue streams – Facebook Advertising as a New revenue streams – Facebook Advertising as a

traffic driver traffic driver

• 200 apps In 1 weekend• 18 Apps for

platinum cards in one week

CASE STUDIES

Strawberrynet – Sales Campaign

Objective – To drive sales of women’s cosmetics and men’s grooming products

Delivery Channel – Combination of targeted eDM, banner placement and search, through selected affiliates within the Viva9 network.

Affiliates were paid on a Commission basis based on sales.

Results – Achieved in excess of $1 million in sales on a monthly basis

Campaign ExamplesCampaign Examples

Other success storiesOther success stories

Resources Resources

• www.affiliatetip.com • www.affiliatesummit.com.au • http://www.affiliateforum.com.au/

QUESTIONS?

Matt Bateman MD – Viva9 Level 2, 62-64 Riley Street East Sydney Ph: (02) 9368 6850Email: matt@viva9.com Twitter: viva9australia;matthieub

Contact:Contact:

Mobile?Mobile?

• Mobile advertising is estimated to be a A$5m market in 2009

• Even in the US, mobile affiliate is still very slow in getting off the ground

• Some interesting companies in the space: – ADMob – Pudding Media – behavioural targetting and advertising

• Drew Ianni (chairman of Ad-Tech)

‘2009 is not the year for mobile advertising’

The Ripple Effect in Social Networks The Ripple Effect in Social Networks

Laurel Papworth Presentation – affili@syd 2009