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Using online performance marketing
to win new business
By
Ann Stanley
MD Anicca Solutions
1. An introduction to Pay On Performance or POP marketing
2. Affiliate marketing – the original performance marketing technique
3. Promotional marketing - voucher sites, daily deals and mobile phone deals
4. Lead generation for B2B and services
Agenda
1: Introduction to POP marketing
Definition of POP marketing
Pay on Performance (POP) marketing is:- ˃ Where a third party generates sales or leads for
the seller or service provider and only gets paid on performance (i.e. receives a commission for each successful sale or lead)
˃ Also called pay for performance, performance marketing, pay on results
˃ Sometimes used to describe other types of marketing such as pay on results based search engine optimisation
˃ You only pay on performance i.e. when a sale is made or a lead is generated
˃ Additional routes to market - other people do the marketing for you (often called affiliates)˃ Gain new customers at low cost˃ Often no or low start-up or upfront costs˃ Often cheaper than PPC ˃ Faster than SEO
˃ Ability to target certain types of customers e.g. by location
NOTE: You can also become an affiliate and earn extra income from your site or marketing activities
Benefits of POP marketing
Main types of POP marketing techniquesYou make the sale and take the money
3rd party takes the money
Affiliate marketingVoucher sites
Mobile/location based offersProduct syndication
Lead generation sites
Daily dealsDrop-shipping
White-label websitesMarketplaces
Product sales and ecommerce Services and B2B
Affiliate marketingVoucher sites
Daily dealsMobile/location based offers
Product syndicationDrop-shipping
White-label websitesMarketplaces
Affiliate marketingVoucher sites
Daily dealsMobile/location based offers
Lead generation sites
2: Affiliate marketing
What is Affiliate Marketing?
Affiliate marketing is:- ˃ Where a third party (or Affiliate) generates sales
or leads for the seller (or Merchant) and receives a commission for each successful sale or lead
˃ It is probably the most widespread form of POP marketing
˃ There are two parties in affiliate marketing the merchant and the affiliate - which applies to you?
Examples of affiliate websites
Quidco - Cash back
Greasy palm - Cashback
Mutual points - Earn points
Shopping directory
Click through to M & S(note url has tracking code added)
Business to business affiliates banners
How does it work?
Visitor
Clicks on
AffiliateWebsite
Goesthrough
Redirectsto
Sendscommission
TrackingSoftware
Merchant Site
˃ Merchants include both smaller businesses and large multi-national companies
˃ Affiliate marketing works very well for certain types of Merchants˃ New businesses (with no SEO traffic)˃ Companies with low budgets or where the cost per
acquisition is expensive by using other methods (such as pay per click)
˃ Big brand names that want maximum sales˃ Most Merchants tend to use affiliate marketing to sell
products to consumers (so they pay commission on a sale)˃ Also used for lead generation (for the sale of services) and
business to business (B2B)
Merchants (sellers or service provider)
˃ Affiliates, anybody with a website or blog who wishes to generate additional income
˃ Affiliates may already have established traffic, extensive database lists for email marketing, or may use SEO and PPC to get visitors to their site (and then to the merchants’ sites)
Affiliates (advertisers)
e-commerce sites Others
shopping sites loyalty sites
ecommerce aggregators cash-back sites
point earning sites blogs
How to manage an affiliate programme
˃ Having a programme and commission structure in place to attract affiliates
˃ Getting enough affiliates to join your programme˃ Ability to track which affiliate generated a successful
sale or lead˃ Easy to manage the programme and pay the affiliates˃ Ability to reject sales or leads if they are fraudulent or
payment is not received˃ Choice of DIY or using an affiliate network
Key elements
˃ The affiliate network acts as a middleman between the merchant and pre-existing affiliates
˃ Create your own programme on the network˃ Use network’s tracking software˃ Let the network promote and recruit your affiliates˃ Let the network manage all the payments˃ Use networks tools to manage the programme
˃ do this yourself˃ use networks in-house services (managed service)˃ recruit an agency
Using an affiliate network
˃ Sales or leads are tracked through a combination of tracking code on the Merchant’s website and Cookies added to the visitors computer
˃ The Merchant pays a price per lead or commission for each sale (via the network)
˃ The network makes all the payments to the affiliates
Affiliate networks – tracking sales/leads
˃ Set-up costs˃ Monthly costs˃ % over-rider (commission paid to network)˃ Number of UK affiliates˃ Experience of Merchants similar to you˃ Ease of use of interface˃ Minimum contract period˃ Other conditions and costs
The differences between networks
Overview of costs and commissions
Lower Upper
Commission to affiliate (sector and Merchant specific)
5%£1 cost per lead
25%£50 cost per lead
Over-rider commission(paid to network)
25% of commission paid to affiliates
(e.g. 12% to affiliates plus 3% to network)
30% of commission paid to affiliates
(e.g. 12% to affiliates plus 3.6% to network)
Set-up fee Free £2500
Monthly fee – DIY Free £300 per month
Monthly fee - managed £250/month (some do not offer this service)
£850 per month
Entry criteria None Minimum monthly traffic to site or monthly sales
Examples of commission
£100 sale
10% commission to affiliate = £10
30% over-rider to network = £3
Total commission = £13
£100 sale
10% commission to affiliate = £10
25% Over-rider to network = £2.5
Total commission = £12.5
Based on 50 sales per month 15%(£15)
10% (£10)
5% (£5)
Extra revenue per month at £100
£5000 £5000 £5000
Monthly costs and fees
Affiliate commission £750 £500 £250
Network commission (30%) £225 £150 £75
Example Monthly network fee* £300 £300 £300
Total fees £1275 £950 £625
Cost Per Sale** £25.5 £19.0 £12.5
Commission and costs based on 50 sales x £100
* You also need to spread the cost of your set-up fee eg £2000 over 12 months** How does this compare with the Cost Per Sale using Pay-Per-Click?
Preparing your affiliate campaign
˃ Apply for an account, wait to be approved˃ Pay deposit/set-up fee˃ Prepare your programme for affiliates
˃ Provide description of company and website with average sales and order size
˃ Commissions offered (and/or cost per leads)˃ Bonuses and additional commission tiers for affiliates hitting
certain targets ˃ Restrictions e.g. PPC advertising on brand name˃ Text and creative (banners and buttons) to be used on
affiliate sites˃ Add tracking code to the “thank you” page on your site and
possibly create a different landing page˃ Run test and then make live
Preparing your campaign
Viewing the Merchant directory
Programme for selling products - example
Creative
Example of a programme for lead generation
Creative
˃ It is essential to monitor daily for bogus leads or sales (you have up to 5 days to reject)
˃ Reject unsuitable affiliates˃ Police your affiliates especially if they are
“stealing” your PPC traffic˃ Top up your account with your credit card
Managing your campaign
˃ Expect up to 300 affiliates to sign up for a campaign within the first few month
˃ This will increase gradually over 6 months˃ Most sales will come from a handful of sites
(super-affiliates)˃ You could receive up to a third of your traffic and
sales from these sites (seen as referral traffic in Analytics)
Likely results
˃ Your commission has to be attractive for affiliates to bother to market your product/service, so compare yourself with similar programmes and offer multiple tiers (with higher commission for more sales)
˃ Offer monthly promotions, competitions and bonuses to increase take-up and sales (this may mean supplying new creative and banners)
˃ Email your affiliates (using the network software) and communicate directly with them
˃ Use an affiliate agency to talk directly with your affiliates offering product or information they can use on their sites or blogs, e.g. for competitions
˃ If you have an ecommerce website create an affiliate feed so that this can be used by product syndication sites
Improving your results
3: Promotional marketing
Voucher Sites
MyVoucherCodes
MyVoucherCodes
VoucherCodes
VoucherCodes
Daily Deals
Groupon – daily email
Groupon – go to website to buy
˃ Merchants are mainly local restaurants, beauticians, hotels, entertainment, days out, and other services
˃ Merchant develops a deal with Groupon, which usually has a minimum of 60% discount (usually for a minimum of 50 people)
˃ Groupon advertises the deal to their e-mail data list within the specified location and on their website as a daily deal or “side deal”
˃ Recipients are encouraged to refer the deal to friends to receive cash payment
Groupon deals – how does it work?
˃ A minimum number of customers have to pay for the deal for it to be activated
˃ They then receive a voucher code which they redeem with the Merchant
˃ The Merchant claims around 50% of the sale value from Groupon for each customer that redeems their voucher, but loses the income from anyone who does not redeem their voucher
˃ This is best used as a method of free marketing – with the Merchant often relying on repeat business to generate real income
Groupon deals - limitations
˃ KGB offer lower commission rates˃ Offers run for a longer duration˃ Better admin assistance, e.g. you receive
all the contact details˃ Better terms and conditions for Merchants
e.g. you get all the money whether they redeem the voucher or not
˃ Main disadvantage is that they have less recipients or members (lower reach)
Alternatives to Groupon
Living Social
KGB deals
Wowcher
Google Offers – currently available in the USA
HotUkDeals
Location and mobile phone deals
Mobile phone and location based deals
˃ Customers download an app onto their phone˃ When they go shopping they check-in and tell their friends
where they are˃ Customers get offered deals direct to their mobile based on
their location and the shop/place they have checked into˃ Mainly used by chains of shops, entertainment venues or
restaurants, plus bigger brands˃ These techniques are suitable for anyone with a location or
premises where customers can go
Facebook – check-in to get deals
˃ Use Facebook Places on your mobile to find special offers everywhere — just look for the deal logo.
˃ Check in to claim a deal at your favourite retailers, restaurants and entertainment venues
˃ Let your friends know about the deal˃ 4 types of deal - Charity deals, Individual deals,
Loyalty deals, and friends deals.
Deals in Leicester
Different types of deals Individual Loyalty Friends Charity
4 Lead generation for B2B and services
4: Lead generation for B2B and services
˃ Affiliate marketing˃ Voucher sites˃ Daily deals˃ Get a quote
˃ general business to business services or tradesman˃ sector or skill specific
˃ Lead generation through other channels e.g. email, surveys and telesales
Types of B2B performance marketing
Quotation sites
˃ The service provider signs up for the lead generation or quoting service˃ Business to business all sectors e.g. Approved
Index, Campaneo˃ Tradesman sites e.g. Service Magic, MyHammer˃ Sector or skill specific e.g. Choose Your
accountant, Solar-Guide
˃ You agree to receive by email a certain number of leads per week, usually by type and location
˃ Leads vary from £5 to >£100
Quotation sites
˃ You either pay online or by invoice˃ There is often a minimum contract and other
conditions˃ You may also get a listing within their directory˃ Other directory sites now offer quotes as an
added service e.g. Free Index
Quotation sites
Quotation services – B2B
Quotation services – B2B
Quotation - tradesman
Sector specific quotes
Sector specific quotes
Any Questions?
www.anicca-solutions.com
07930 384443
