Introduction To Affiliate Marketing 20.03.2012 Final

Who or what is an affiliate

What is affiliate

marketing Will it work for me? Introduction

5 Steps to create my

own affiliate program Case Study

Agenda

Today’s Session

• Part 1: 2 hours

Understanding of the What, Why, When, How & Who of Affiliate Marketing

• Part 2: 1 Hour

Case Studies, and Break out session, and Questions

Slide � 3

What is Affiliate Marketing?

Simple definition

• Website’s (affiliates) generate leads and sales

for (merchants), in return for reward

Slide � 6

Market Size & Trends

Slide � 7

Affiliate marketing drove £4.62bn in online sales during 2010, a 12% increase on 2009(£4.13bn) This means affiliate marketing drove 8% of all online retail sales

Affiliate continues to show

strong growth

And steal share of the media

mix

A recent IAB study of 140 advertisers showed:

77% of respondents said that marketing spend

for affiliates had grown and 71% expected it to

grow again in the coming year

19% of respondents are paying out over £100k

month in affiliate commissions

Over ¼ of respondents spend more than 20% of

online marketing budgets on the affiliate

channel

Acquiring our share

IAB Survey December 2011

Affiliate Marketing is significant in spend

European Affiliate Marketers’ Online Ad Spending Distribution

5%

43%

21%

19%

12%

Classifieds

Search

Affiliate

E-mail

Display

Why use Affiliate Marketing?

Where does affiliate fit into my online strategy?

Metrics

�Performance based: only pay for conversions, clicks, leads, sales

�Tracking required: usually done through an affiliate network

�Cost per Acquisition, cost per click, cost per lead, cost per download, cost per view, cost per Facebook like

How does it work?

The 4 Key Elements

Merchant

Network

Affiliates

Consumers

A typical customer journey?

Consumer Affiliate Network Merchant

1 2 3

6 5 4

Legend

Traffic

Payments

Customer is driven to the affiliates site via a search engine , email or bookmark1 TradeDoubler tracks the referring affiliate (Fatcheese.ie) and sets a cookie on the users machineUpon conversion the TradeDoubler pixel is fired taking into account any de-duplication rulesDepending on the pixel implemented data is sent back to TradeDoublerCommission is calculated based on event ID, tiers and conversion data capturedPayments are made by TradeDoubler to each affiliate, this data is available to them through our

interface, affiliates can access using their unique login details23456

Implications for merchants

• The benefit for the merchant is simple;

– They only pay out on results

–Guaranteed ROI

– Zero risk strategy

Slide � 18

Implications for affiliates

• affiliate’s need to become experts in driving

relevant traffic to merchants websites in

order to maximise return for themselves.

• The affiliate spends their own time and

money driving traffic to the merchant and only

gets paid if they deliver results.

Slide � 19

Implications for networks

• Must work with a large number of affiliates

• Only make money if they can drive sales for the merchants

• Networks must have accurate reporting and tracking

Slide � 21

Who are these Affiliates?

What is an affiliate?

• Has anyone heard of

• affiliates are:

“companies, groups and individuals who promote

merchants through one, or many of the various forms of

affiliate marketing”

Slide � 22

Who are the affiliates?

Slide � 23

34%

46%

20%Full Time

Part Time

Hobbyists

Female V’s Male

82%

18%

Male

Female

Where do they work from

81%

19%

Home V's Office Working

Home working

Office Based

Affiliate Types

13%

6%

3%

8%

4%

31%

7%

28% Search

Email Marketing

Media Agency/ Media Broker

Portal/ ISP

Price Comparison

Reward/ Loyalty

Shopping Directories

Content

6,500 active affiliates with circa 1,000 active affiliates each month

Source; Tradedoubler

Types of affiliates?

Content

Emailers Voucher code

Comparison sites

Shopping directories

Cashback

In reality affiliates are entrepreneurial early adopters who operate across the entire digital spectrum

Content affiliates

Emailers

Slide � 29

Shopping Directories

Cash Back

Loyalty Website’s

Voucher Code Website’s

Cashback affiliates UK

Slide � 34

Slide � 35

The Affiliate Networks

What is an affiliate network?

“affiliate networks provide their clients(merchants) with a gateway to large numbers of individual affiliates and enable all parties to track results through the use of their technology”

Slide � 36

Who are the affiliate networks?

Slide � 37

TradeDoubler are the affiliates

network of choice

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

TradeDoubler Webgains Zanox Affiliate Window NetAffiliation CommissionJunction

Affilinet Daisycon PublicIdees Linkshare

Source: A4U European affiliate landscape report September 2011

Across 18 countries affiliates were

asked the question…

“Who are the preferred

affiliate networks that

you currently work with”

What makes TradeDoubler

Europe's No.1 network

0

1

2

3

4

5

6

7

8

9

Trackingreliability

Quality ofadvertisers

Paymentreliability

Paymentfrequency

Range ofadvertisers

Transparency Reputation Exclusivity ofprograms

Source: A4U European affiliate landscape report 2011

Across 18 countries affiliates were

asked the question…

“Which features makes

that network your

preferred choice to

work with ”

Who uses affiliate marketing

Biggest Verticals

Slide � 41

Financial services

Retail

Telecoms

Broadband

1

2

3

4

5

Travel

Gaming6

7 Recruitment

Some familiar brands...

Entertainment...

Telco

Online gaming...

Recruitment...

IT/Software...

To Summarise

Merchant

Network

Affiliates

Consumers

Slide � 50How does this apply to you?

Types of Affiliate Campaigns

Slide � 51

Sales

Online form completion – insurance quote/laser eye surgery

Email acquisition – qualified email address for database

Sign up / subscriptions – competitions/prize draws

1

2

3

4

5

Downloads – music / promtional code

Merchant objectives are varied...

Free samples – beauty, mailing address 6

7 Account acitvation – gaming sites/ banks

Types of Affiliate Programs

CPACPA

CPLCPL

CPCCPC

Description CPA CPC CPL

Cost per acquisition/sale Cost per click Cost per lead

You pay for Sales Clicks Contact details

Best for: brand awareness & sales traffic drivingbuilding customer database

Creative requirements: Price led offers Call to action Competition

Publishers like variation in formats potential revenue Variation in formats

High conversions High Click through rates

Sticky content

No purchase necessary

Publishers dislike Reliance on your: Reliance on your:

- Product - Creative Appeal of offer

- Sales process - Strong call to action Sharing user data

- Ability to convert online - Use of CPM inventory

Testing required? YES YES NO

Types of Affiliate Programs

Slide � 54

� Cost per click- Social Ads on Facebook. These ads can be micro-targeted, there is no “Like” feature here.

� Cost per Like- Social ads and sponsored stories that are micro-targeted. The likes are published as social interactions into the newsfeeds of users. A user can additionally like a Facebook page after click through.

� Cost per connect- using Facebook Connect button, gives access to certain user information. The user double opts-in to allow access to the information requested by the advertiser, whether it’s basic user info or more detailed like e-mail address and access to their calendar.

� Cost per download/lead/action- offers are distributed in-game to drive CPL, CPA, and CPI in exchange for Facebook Credits.

Social affiliate

4 Questions to ask myself?

When to use Affiliate Marketing?

Affiliate Marketing

1. Is your website e-Commerce

ready?

2. Are you selling B2C products or services?

3. Do you want to grow your online sales by 15 -

20%?

4. Do you want to

deliver sales or leads to your call centre?

5 Steps to creating your affiliate programme

Set commission levels

Integrate pixel tracking

Identify suitable affiliates

Provide collateral & test

Soft launch, Go Live

• Guidelines for CPA:

• Can be set amount or % commission

• Should be approx. 50% of your profit after

costs

• Need to incentivise the publishers

Step 1: Set your commission levels

• Pixel tracking software tracks:

- The source of the traffic

- The number of impressions

- The number of clicks

- Time and date of activity

- No consumer data is captured

Step 2: Integrate pixel tracking

Step 3: Identify suitable publishers

• Who is your target market?

• What sites do they frequent?

• Broad reach / high volume sites?

• Niche targeted sites?

• Existing off line relationships?

Step 4: Provide ammunition / collateral

• Banner ads IAB standard unit sizes

• XML feeds

• Text links

• Logos

• Price led offers

• Widgets

Automate as much as possible

Step 5: refresh your creative

• Use dynamic content where possible (XML)

• Update offers frequently – keep them fresh

• Use appealing images (easy for travel)

• Use special offers and discounts to achieve a

high CTR

Affiliate program charges vary

• Network over-ride Charges- Typically 30% of affiliate commission

• Set up- Technical Integration- Between Zero to €1,500

• Monthly Management Fee-Typically between €250 - €1,000 PM

Guidelines for CPA:

Work out life time value of a customer

DMA (direct marketing association) estimate that one

qualified contact on an email database generates

on average 2.7 SALES over a 18 month period.

CPLs range from €3 - €50 depending on industry

Step 1: Set your commission levels

Creative Examples

Slide � 65

Souls email

Pricing

Site usability

Look and feel

Brand

Relevant content / deep linking

Simple Booking/sale process

Conversion – its up to you

Publisher’s that see

results will give you more prominence

Key Benefits

CPACost

Effective Customer Acquisition

Only Pay for Sales

SEO

Brand Visibility

Achieve high

Rankings

ROIDrive

Revenue

Measurable

Transparent

Case Study

• Type: Pan European CPA

• Focus: Online Sales

• Regions:10

• Length of Program: 11 years

• Number of Events: 8

• Bonus/Tariffs: Varied between events

• Irish Affiliates working on the program: 210

• Yearly Sales

Slide � 68

Case Study

• Type: UK & Ireland CPA

• Focus: New online Shoppers

• Regions:2

• Length of Program: 11 years

• Number of Events: 10

• Bonus/Tariffs: Varied per program

• Figures to date 2011 : Clicks 18M, Sales 653K, Cart Value £56M

Slide � 69

Case Study

Slide � 70

� Type: Lead Generation CPC

� Regions: 1

� Length of Program: 8 weeks

� Number of Events: 1

� Bonus/Tariffs: €1.75CPC

� Targets: 500 =clicks per month

Case Study

Slide � 71

� Type: Lead Generation CPL

� Regions: 1

� Length of Program: 1 years

� Number of Events: 1

� Bonus/Tariffs: €7 CPL

� Targets: 500 per month

Breakout Session

Summing Up

1. Know the value of a sign up/sale in order to set

commissions

2. Make it worth it for the publisher

3. Its up to you to convert traffic to sales!

4. Review & refine

5. Don’t view it short term – integrate into

marketing plan

4 Key Elements

Merchant

Network

Affiliates

Consumers

3 Key Benefits

CPACost

Effective Customer Acquisition

Only Pay for Sales

SEO

Brand Visibility

Achieve high

Rankings

ROIDrive

Revenue

Measurable

Transparent

Open Forum?

Slide � 77

Daniel Desmond

Sales Director TradeDoubler Daniel.desmond@tradedoubler.com

@danielmdesmond +353 86 7852345

Retargeting Example

Slide � 78

Retargeting

Slide � 79