Performance MarketingUsing affiliates and other online techniques to drive revenue and

business

Matt BatemanMD Viva9

Performance/Affiliate Marketing in Performance/Affiliate Marketing in

AustraliaAustralia• In the beginning• How does it work? • Different models • 6 Simple rules of Performance marketing• Relationship with search• Arbitrage • Looking into the crystal ball

In the beginning...In the beginning...

Performance Marketing Model Performance Marketing Model

Early Performance Models Focused on Early Performance Models Focused on

eCommerceeCommerce

Traditional Cost Per Sale Model

PROS

• Guaranteed ‘can’t lose’ model for clients

• End Consumer pays no more – commission included in sale price

• Easy to explain and sell

• ‘Environment’ less of a concern

CONS • Lower Margin• Lack of sophisticated

publishers • Traffic becoming

commoditised• Sometimes hard to drive

volume• Less good for high-value

products• Market Being driven

bottom-up

Financial Model

Cost Per Lead/Cost Per Acquisition Cost Per Lead/Cost Per Acquisition

ModelsModels• Cost Per Lead: • Qualified Lead into a database

– Phone leads– Direct email leads

• Can be as simple as First Name, Last Name, Email Address

• Or as complex as ’25+ men in Rural NSW who don’t have Austar’

• One is obviously going to cost more than the other, as there is less incidence in the population and it’s harder to find them

• Cost Per Acquisition - usually higher value – Credit Cards, Insurance customers, telco customers

Performance-Marketing

Performance Marketing Performance Marketing

Growth Growth • 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 driven by Search

• Lower barrier to entry to the market • More choice for advertisers, but also more confusion

Market by Segment in Australia – Affiliate Market by Segment in Australia – Affiliate

in 2008 in 2008

2009 Affiliate Market Defined 2009 Affiliate Market Defined

IAB Report – Total Online IAB Report – Total Online

AdvertisingAdvertising

The Tail is no longer the tail – ‘affiliates’ are becoming

sophisticated

The Cosmetics Club

FinanceFinance

6 Rules for performance marketing

1. WIN-WIN-WIN1. WIN-WIN-WIN

• Publishers Care about EPC and ECPM– In general categories, anything under $0.40c EPC is

marginal – In Credit Cards, the benchmark EPC $3.50 up to $10

• Networks and aggregators need volume and consistency

• Clients want the performance marketing promise – ‘only pay if it works’

It only works if it is genuinely a partnership between publisher/network/advertiser

Rule no. 2 - 3Ts and an ARule no. 2 - 3Ts and an A

•Trust •Transparency •Truth•Accountability

Source: Lee Hopkins 2009 – Better Communication Results

Rule 3 - Remember the 4 Ps Rule 3 - 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 – Is it right for the performance channel

Rule 4 OptimisationRule 4 Optimisation

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

IF IT WORKS IN SEARCH, IT WORKS

Rule 5 Work with genuine partnersRule 5 Work with genuine partners

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

• Get educated • Get references • Affiliate/Performance Marketing is about doing lots

of little things right • It is not easy, but can be very rewarding

6 – Ensure you have rules around 6 – Ensure you have rules around

Search Search • Understand what you’re buying in Search • Search is crucially important to any performance

campaign, but you need to understand what you’re buying

• Does last click win? • Are you optimising properly? • Work with large publishers and have rules around

what they can search on – closed networks

Dos and Don’ts of working with networks

DON’Ts1. DON’T let your search

provider run your affiliate program

2. DON’T ‘set and forget’ 3. 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 large publishers

4. DO Work with a transparent network

Everybody Wants CPS Everybody Wants CPS

• Wouldn’t it be great if you could reduce everything to a cost-per-sale?

• Key Question: ‘How well do my members know your brand/product?’

• Experience shows that the 3RD COMMUNICATION has huge payout on eDM

WORK TOWARDS ECPS

Nightmares for a performance Nightmares for a performance

marketermarketer1. The campaign does not convert 2. There is limitless budget, but we

can’t fill it 3. We simply cannot find the

audience the customer is after (often because it has been over-complicated)

The power of email and databases

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

Lifecycle of an eDM customerLifecycle of an eDM customer

Initial Offer ‘Chance to win’ ‘Register for free’$3 CPL un-targeted

Profile Customer Commercial Rel’ship

Continue conversation via Targeted eDM

Build audiences Market to them Achieve end result – customer that buys

Models are changing Models are changing

• Arbitrage on its own doesn’t work• Most networks are surviving by re-selling clicks and/or

impressions • You need:

– Technology – eg Behavioural – Profiled Audiences and ways to reach them – Control over your own inventory – Add value on the strategy and planning side of things and

are acting as virtual agencies

• Agencies need to be careful that if they don’t understand performance models, they might find themselves out of the conversation

A comment on E-Commerce in Australia

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

• Major Retailers are beginning to migrate online– Harveys – Bing Lee – Myer – David Jones

• Have all made some announcement about E-Commerce in the last 6 months

• So far it has been a bottom-up push to E-Commerce and online sales

• The traditional advertising models won’t work • Are large retailers ready to adapt?

2010? 2010?

• Expect continued growth in the performance sector

• There will be consolidation/changed business models

• The year E-Commerce grows up in Oz?

• What impact social? • Jury still out on mobile advertising

Matt Bateman MD – Viva9 Email: matt@viva9.com Twitter: viva9australia;@matthieub

Please don’t forget www.movember.com.au And if you get a chance, check out

@kurtfearnley

Contact:Contact:

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

Case StudiesCase Studies

The power of email The power of email

Crazy Sales Crazy Sales