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Geno Prussakov's presentation on whether affiliate marketing is "merely an alternative" (to other channels of online marketing). Presented on June 27, 2013 at Search Marketing Day in Poznan, Poland
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Is Affiliate MarketingMerely an
“Alternative”?Geno PrussakovCEO & President, AM Navigator LLCwww.amnavigator.com Founder & Chair, Affiliate Management
Dayswww.affiliatemanagementdays.com
(+1) [email protected]
@ePrussakov .
Affiliate Marketing is…
State of the Industry
Trends & Opportunities
Outline
Affiliate Marketing is…
The Definition...performance-based marketing, whereby affiliates
promote your product/service & get compensated for every customer/lead referred.
Who Are “Affiliates”? “The term ‘affiliate’ means any company that
controls, is controlled by, or is under common control with another company” /Compilation of State and Federal Privacy Laws, 2002, p. 76/
“The term ‘affiliate’ can be used as a generic word to indicate either a subsidiary or division” /Business information: how to find it, how to use it, 1987, p. 38)
Terms “affiliate and subsidiary” are “used synonymously” /International dimensions of management, 1989, p. 2/
Who Are “Affiliates”?Affiliates:
Independent marketers who may choose to promote a business, and be paid on performance-based arrangement.
Types:i. Content (Answers.com)
ii. Coupons (RetailMeNot)
iii. Data feeds (Shopzilla)
iv. Display (Forbes.com)
v. Email
vi. Loyalty (TopCashBack)
vii. Mobile
viii. SEM (SEO & PPC)
ix. Social Media
x. Video
So Affiliate Marketing is…
... “the art of doing a merchant’s marketing better than they can,
and profiting from it.”Chris Sanderson, AMWSO
How Much Do They Make?
Source: Darren Rowse, The Ultimate Guide to Making Money with the Amazon Affiliate Program,
ProBlogger.net, 4/24/2013
Note: The y-axis reflects shows earnings in USD
January-September: 13,000 UVs/mo
October: 95,000 UVs
November: 2,000,000 UVs
How Much Do They Make?
“Amazon ...derived about 40% of its sales from partners participating in their “Associates”
program.”
Source: Siegel M. & Gibbons F, 2008, Stanford University,Amazon Enters the Cloud Computing Business, p. 6
How Much Business They Bring?
Our experience: 20%-40%
Affiliate Marketing ≠ Channel
“…but, rather, a way of remunerating a marketer… hence, affiliate marketing really exists on the crossroads of a number of online marketing channels and works with nearly all of them.”
Source: Affiliate Program Management: An Hour a Day (p. 24)
It is a marketing context, based on the principle of performance-based compensation.
Affiliate Marketing ≠ Channel
It is integral to understand this for ensuring proper/healthy co-existence (not conflicting, or cannibalizing, but complementing) of affiliate program with all channels of marketing that the merchant is employing.
State of the Industry
Size of the Industry (US)
• Advertiser/merchant count: 10,000+
• Publisher/affiliate count: 1,000,000+
• Spend: ≈$3,000,000,000
Size of the Industry (UK)
• UK advertiser/merchant count: ~3,000-4,000
• UK publisher/affiliate count: ~10,000
• Impact scale: ~100 million transactions, and ~70 million leads
• Scale: 7-9% of UK online marketing spend; ~6% of the UK Internet economy; .6% of GDP
• Growth: since 2008 UK affiliate marketing has registered an average 12% YoY growth
Source: PriceWaterhouseCoopers study commissioned by the Internet Advertising Bureau UK, January 2013
Size of the Industry (Russia)
Source: AdLabs.ru estimates & forecast, as quoted by a CPA Club Russian Facebook group member
$2.4 million 2003 → $65.6 million in 2012
Trends & Opportunities
From hype to reality:
Attribution (improvements in tracking & reporting; e.g.: AvantMetrics, ImpactRadius, PHG, TagMan, etc)
Video (tools; e.g.: ShareASale, Coull, Viewbix)
Offline (bridging the online/offline gap; e.g.: RingRevenue, mobile-to-store campaigns, etc)
Trends
Opportunities in EvolvingAffiliate Marketing Landscape
See video from:
http://www.youtube.com/watch?v=5f6ievv-70E
Opportunity #1: Mobile
Opportunity #1: Mobile
Set to eclipse desktop by 2014
71% of smartphone owners shop on mobile
Opportunity #1: Mobile
Mobile sales = 11% of e-commerce sales (2012), 15% (2013), 18% (2014) 21% (2015), 24% (2016)
Sources: Morgan Stanley, Skava, Branding Brand, eMarketer
Opportunity #2: Social
Source: BIA/Kelsey, April 2013
Social shopping
Opportunity #2: Social
Social shopping
Opportunity #2: Social
Social shopping
Social gaming (warning: doesn’t work w/ PPL)
Podcasting
Q&A and review websites (in US: disclosures)
Social media ads
Proactive conversation design
Opportunity #2: Social
“The total value of the global real-time mobile location-based marketing and advertising market will grow from € 192 million in 2011 at a CAGR of 91 percent to € 4.9 billion in 2016.”
Source: Berg Insight, Location-Based Advertising and Marketing, May 2012
Opportunity #3: Local
Offline performance marketing (e.g. PPCall)
Opportunity #3: Local
Source: RingRevenue.com
Offline performance marketing (e.g. PPCall)
Local search
Geo-targeted advertising
Mobile- and social-related opportunities (e.g. proximity-based location marketing, check-in services)
Opportunity #3: Local
Key: be relevant (here and now)!
Instead of a Conclusion
Perhaps the most important part of offensive basketball is the part played by each man without the ball.
~ John Woden, Naismith Hall of Fame Coach
One of the most difficult coaching tasks is to teach players to carry out actions that don’t involve the basketball — the magnet of the game.
~ Krause, Meyer & Meyer, Basketball Skills & Drills
Moving without the ball requires you to be adept at starting, stopping, faking, and changing directions. You must have excellent court awareness and vision…
~ Ralph Pim, Winning Basketball
Self-Educate to Survive Succeed!
Perhaps the most important part of offensive basketball is the part played by each man without the ball.
~ John Woden, Naismith Hall of Fame Coach
One of the most difficult coaching tasks is to teach players to carry out actions that don’t involve the basketball — the magnet of the game.
~ Krause, Meyer & Meyer, Basketball Skills & Drills
Moving without the ball requires you to be adept at starting, stopping, faking, and changing directions. You must have excellent court awareness and vision…
~ Ralph Pim, Winning Basketball
Self-Educate to Survive Succeed!
Thankyou!