10 Successful E-Commerce Affiliate Program Marketing Strategies

• Carolyn Kmet is the director of affiliate marketing for Groupon.com. Previously, she led the client services team at ShareASale.com, an affiliate network; and was responsible for growing the affiliate channel at Orbitz.com, Bradford Exchange and MyPoints.com.

• Carolyn has a B.A. from University of California at Berkeley, an MSJ from Northwestern University and an MBA from Loyola University of Chicago. She got into online marketing in an effort to pay off her academic addiction.

Meet the Presenters

• Todd Farmer is CEO of PerformStreet Media, an internet marketing consulting and technology firm specializing in Affiliate Marketing. He also teaches Internet Marketing at University of San Francisco online.

• In January 2011, Todd was recognized by Affiliate Summit, winning the "Affiliate Marketing Legend" Award.

• In 2005, Todd sold the company he founded in 1996 that created the first Affiliate Marketing Tracking & Management Solution and offered Affiliate Program Management Services for its technology clients. He worked as a division president for the acquiring company until 2008.

Meet the Presenters

• Jim Gribble began his career in direct marketing three decades ago. He served as a profit center manager at such top direct marketing companies as Phillips Publishing, Grolier Direct Marketing, International Masters Publishers, International Home Shopping, and Xerox Education Publications.

• In 1999, Jim founded LinkProfits, one of the first companies to offer outsourced affiliate program management services to ecommerce merchants. Since then, he has helped over 30 merchants realize the full potential of their affiliate program initiatives.

Meet the Presenters

10 Successful E-commerce Affiliate Program Marketing Strategies

• Find out the most critical aspects involved with launching and managing a successful affiliate program and how to approach each aspect in the best way.

• Benefit from real-world examples and suggestions of specific resources to best help you implement the important strategies we will present.

Why Affiliate Marketing?

• Performance-based Channel • Completely Measurable! • Extended Reach• Natural Search extension• Outsource PPC• Affiliates Focus on Direct Sales• Recommendations by Affiliates• Brilliant Channel -- if managed properly.

o No AutoPilot Success

Why an affiliate program is a viable marketing channel for Groupon:

• Affiliates enable retailers to merchandise a brand beyond its own limitations: ex. Groupon and travel

• The channel helps personify the Groupon brand: social media mavens, mommy bloggers, etc.

Is an affiliate program a viable marketing channel for your ecommerce business?

• Just because affiliates are paid on a performance basis, there are still investments required to start up, build, and manage an affiliate program.

• An affiliate program is not a panacea for a weak business concept.

• Your site needs to be successfully converting traffic to buyers before you consider an affiliate program.

Is an affiliate program a viable marketing channel for your ecommerce business?

• If you're running a successful ecommerce site, then there is no reason for you not to offer an affiliate program.

• You then need to determine how much are you ready to invest in your program. You need to consider: o Will I run my program on an affiliate network or have

an ‘internal’ program -- or both? o How will I compensate my affiliates? o Who will manage my program?

We’re going to explore these questions and more, in-depth during our presentation.

Deciding on a CPS, CPL Affiliate Program and the differences between big “Retail Networks”

and “CPA Networks”

• When determining your Affiliate Marketing Strategy, what do you need to know about the different payout types, and the different types of affiliate networks?

CPS = Cost Per Sale ("commissions")CPL = Cost Per Lead ("data")

Deciding on a CPS, CPL Affiliate Program and the differences between big “Retail Networks”

and “CPA Networks”

CPA = Cost per AcquisitionThese are both "Acquisitions":• CPS = Cost Per Sale • CPL = Cost Per Lead

However, the industry generally uses the terminology "Affiliate Networks" and "CPA Networks" to differentiate between the two.

The “Retail Networks” Include:

“Retail Networks” vs. “CPA Networks”

• Cost per Acquisition (CPA) Networks or "Lead Networks" (CPL) typically promote 'registration' type offers where there is no actual sale generated.

• Advertisers on these networks are typically looking for leads. Offers types include: insurance, financial products, vitamins, weight loss, health, beauty, memberships and other continuities, etc..

CPA Networks: Some of the Players

• Hydra• Motive Interactive• ClickBooth• Affiliate.com• Azoogleads• MarketLeverage• Copeac• MaxBounty

...there are hundreds!

Our Concerns About “CPA Networks” and Why We Are Not Recommending Them:

CPA Networks are a "super affiliate". -- Sub contracting with unknown "sub affiliates".• No control• No transparency• No brand management• No placement management• Fraud concerns

CPA Networks are for DATA - not retail.• Incentive traffic • Traffic quality• Lead quality


• Types of advertisers (all advertisers great and small vs. data aggregators)

• Types of payouts (all types vs. CPA)• Relationship between you and your affiliates.• Ad units (mini vs. all kinds -> product links,

datafeeds, geotargeting, dynamic creative, tools.)• Technology provided (simple conversion tracking

and multi-pixels vs. robust creative tracking, affiliate reporting, advanced tools, webservices and API's)


• Types of affiliates (aggressive search and emailers vs. all kinds: niche, content, product-specific, topical, entertainment, news, loyalty, coupon, search and email)

• Affiliate recruiting• Application process• Affiliate management (service, marketing, and

performance vs. deal makers and sales)

The Quality Focus...

The merchants who continue to run successful affiliate programs are more focused on quality networks and partnerships than ever before:

• ONE network program and/or an internal program only.

• 90/10 rule is no longer the norm for these merchants.

• They are focusing more on the '10' -- quality, productive affiliates -- and expanding relationships that make sense.

“Choosing Your Solution”Should you join one of the affiliate program networks or run a private/internal program?

• Before launching your affiliate program, you need to decide the platform upon which you will run it.

• Let’s discuss the differences between an in-house solution, and choosing one of the available networks.

“Choosing your solution”An Overview

• A Trusted 3rd Party Network• In-House/Private Program• Both• Multiple Networks

(Not going to discuss CPA Networks as an option.)

Choosing your solution: Understanding Networks

It’s pretty clear that affiliates prefer to work with merchants though a respected third party network.

The primary reasons for this are:

• They want to ensure they get paid.• They don’t want to learn the ‘ins and outs’ of

working with your affiliate ‘system’.• Centralized reporting, convenient tools, API's,

more...

Choosing your solution: Understanding Networks

Brand strength may be a contributing factor:

• Young brand Can you manage cutting checks, sending out tax forms, etc. Plus, it’s easier to recruit because you’re in a “shopping mall” of affiliate programs.

• Mature brandAmazon and eBay have established brand credibility and trust, and have more infrastructure to manage payment and tax functions.

Choosing your solution: Understanding In-House Solutions

• More integrated with the business• Ecommerce / CRM Integration - potential tight

control• Demands more on IT Resources• Completely flexible• Customizable• Sophisticated Strategies can be executed• Payment to Affiliates• Tax forms (1099's, W9's)

However, if control and flexibility is needed, then a customized in-house solution may fit more technically -- but the recruiting challenges are typically immense.

“Choosing your solution”:One or More Solution

Should you run your program on a single network, multiple networks, in-house, or both?

• Most run on a single network to maintain focus• Many run a single network and in house

o Network reach and "partner program" • Many run on two networks

o Extended reach• Example of a program on multiple Networks:

o VistaPrint is everywhere -- how can they effectively manage all those relationships?

• Benefits of being on a single network

The Healthy Back Institute's Successful Internal Affiliate Program

• In five years, with only an internal program, HBI has developed an affiliate and joint venture channel that generates significant sales (in the millions)...

• Success can be attributed to:o A strong front-end offer (a free book)o 'True' lifetime commissions for affiliates that

are tracked via a database (not cookies)o Proven-effective promos and content provided

to affiliateso Close relationships with affiliate partners

Establishing an affiliate compensation plan that is attractive, yet affordable.

• When setting affiliate commission rates, you need to determine the optimal rate that takes into consideration: overall profitability, product profitability, lifetime customer value, competitor payouts, conversion rates, affiliate attraction, bonus tiers, attractive EPC, ‘room’ to secure desired relationships, credit affiliates with phone orders they refer, etc.

• Consider product-specific commissions! This allows you to feature products and offers. "All next week we will pay double commission on ..."

How to promote your Affiliate Program so desirable affiliates find you.

• In addition to your Affiliate Manager’s direct recruitment practices, affiliates need to know about your program and apply.

• Let’s discuss how to publicize your affiliate program and entice quality affiliates to apply.

How to promote your Affiliate Program so desirable affiliates find you.

• Network Resources• Intra Network Promotions• External Promotions• Affiliate Program Blog• Affiliate Directory Listings• Forums• Podcast Guests• Networking• Affiliate Summit

How to identify, approach and secure partnerships with desirable affiliates.

• Your affiliate program needs the best affiliates, and you need to be able to reach out to them and secure their participation.

• Let’s discuss the elements important in successful affiliate recruitment practices.


• Quality Recruiting takes time• SPAM is bad.• Identify:

o First, use Basic Search toolso Next, use more advanced tools

• Approach:o Direct, personal, benefit-focused.o Build Relationship

• Secure Partnerships:o Activation is most important. "Get started!"


Thinking Outside The Box...

• How many of you have merchant partners that operate in your niche or a complementary niche?

• Most assume that since merchants don’t typically advertise on their sites, that they will not be open to becoming affiliates.

• The vast majority of Lose the Back Pain's affiliate sales come from merchant partners who email the offer to their subscribers. LTBP often reciprocates by mailing the merchant partner's offer to their subscribers.

• Considerations: Leakage

Hiring an Affiliate Manager or Outsourcing

• Who will run your affiliate program and how should you compensate them? How will your company support the channel?

• Let’s discuss the elements important to ensuring a well-managed affiliate program.


The critical factor is you need to have experienced & dedicated resources, programs don’t run themselves!

• External: OPM or Agency• Internal: eBay• Internal + External: Groupon team structure

Key takeaway...hire someone with experience.


What does experience bring?

• Established relationships• Knowledge of what it takes to activate particular affiliates:

money, exclusives, product samples?• Experience with cross-sector performance benchmarks• Understanding of seasonal fluctuations• Insight into cause/effect of various affiliate tactics

Segment your affiliate base to optimize efficiency, reporting and communications

• How can you segment affiliates?o Niche: Coupons, Travel, Moms, etc.o Traffic type: PPC, email, forum, etc.o Performance: Top-tier, mid-tier, etc.o Potential: High EPC, quality traffic, etc.

• Mine inactive affiliates = low-hanging fruit

Providing results-oriented marketing material for your affiliates.

• The marketing material you provide your affiliates must be perfect for each affiliate, and their promotional efforts on your behalf.

• Let’s discuss the variety of marketing material important for a successful affiliate program.


Groupon creates tools that make it easy for different types of affiliates to drive traffic to us:

Dynamic Banners



Widgets



Link Generator




API

How to best promote through affiliate deal/coupon sites.

• Affiliates come in all shapes and sizes. Some of the most popular affiliate types are the coupons / deals / incentive / loyalty sites.

• Let’s discuss how to leverage their reach and influence, while remaining profitable for you.

How to best promote through affiliate deal/coupon sites.

• We always tie increases in commission to an actual marketing plan: Where are you going to feature us? How many dedicated emails and when? How much will you increase cashback for the consumer? Plus, we set the increase to expire after a set period of time to force us to evaluate the ROI of the deal.

• Recognize LTV of customer that comes in through an incentive site

• Give specific coupon codes to individual affiliates vs. general coupon codes.

Key Take-Aways

• An affiliate program is not a panacea for a weak business concept.

• Focus on quality with respect to: o One network and/or one internal program (avoid

CPA networks)o Experienced, dedicated managemento New affiliate recruitment practices o Relationships with affiliate partners

• Establish attractive compensation terms• Segment your affiliate base & mine inactives• Create effective, results-oriented promotion materials

Panel Contact Info

Carolyn [email protected]@catango

Todd [email protected]@toddfarmer

AffiliateMarketingPlan.com

Jim [email protected] 301 916-3900@LinkProfits

Business

10 Successful E-Commerce Affiliate Program Marketing Strategies