Formic Media Seminar Series:Affiliate Marketing
Hosted by:Formic Media, Inc.
www.FormicMedia.com
John McPhee | [email protected]
Sponsored by:Spool Video
www.FormicMedia.com
Brian Schatz| [email protected]
Formic Background
Launched in 2008 to service small business & partners
Incubated by Anvil Media, enterprise SEM agency
Provide SEO/SEM, social media & web development services
Focus on education (monthly Seminar Series)
7 employees
45+ active clients
Affiliate
MarketingAugust 2011
Provided by Anvil Media Inc.©2011—All Information in This Document is Copyright Protected
and the Property of Anvil Media Inc.
Nick Herinckx
Senior Account Executive
503.595.6050x233
Anvil Media, Inc.
Nick Herinckx – Senior Account Executive
• 3 years at Anvil Media
• Responsible for most Anvil B2B PPC & SEO case studies
• Manages own network of affiliate sites in free time
• Published in AboutUs.org & PPC Insider
• Technical background in website code & development
• Grew Borders’ affiliate program 34% year-over year at 1,400% ROI
Overview
1. What is Affiliate Marketing?
2. Types of Affiliate Programs
3. How Does it Work?
4. Starting & Running a Successful Program
5. Types of Publisher Business Models
6. How to Become an Affiliate Yourself
What is Affiliate Marketing?
Affiliate marketing is paying someone else to generate business for you online, where you only pay for performance.
Definition
Section: What is Affiliate Marketing?
Publisher (the affiliate)
• Promotes your company for you
• Often owns a related website, email list or has money to test on advertising
• Gets paid only when they accomplish a sale, lead or other action you outline
Advertiser (the brand)• Wants leads/sales
• May not have a big budget or time to devote to marketing
• May simply want more exposure on other affiliates’ sites
• Pays a fixed amount or a percentage of a sale to the affiliate only when a sale is made or lead is generated
Publisher vs. Advertiser
Section: What is Affiliate Marketing?
• Amazon invented the concept of affiliate marketing online.
History
Section: What is Affiliate Marketing?
• Affiliate marketing spending is expected to reach $4 billion in 2016 (Marketing Sherpa)
• Some top brands are affiliate marketers:
History
Section: What is Affiliate Marketing?
• Risk is almost all on the publisher/affiliate
• Only pay for results
• No need to be an expert marketer, the affiliate does all the “creative” marketing
• Ability to gain visibility on some of the Internet’s top websites
Benefits of an Affiliate Program
Section: What is Affiliate Marketing?
• Must promote program when starting
• Must police affiliates to ensure they’re following your rules
• Some up-front financial investment
• Must communicate with affiliates
• Some technical implementation required
• Build up over time, not a quick fix
Challenges of an Affiliate Program
Section: What is Affiliate Marketing?
Types of Affiliate Programs
You pay for leads generated, typically a fixed cost up front plus another sum if lead turns into a sale later on.
Cost per Lead (CPL)
Section: Types of Affiliate Programs
Cost per Lead (CPL)
Section: Types of Affiliate Programs
Payout:
• $10/lead
• $700% for sale
Cost per Lead (CPL)
Section: Types of Affiliate Programs
• You pay only for sales generated, typically a % of the order total.
Cost per Sale (CPS)
Section: Types of Affiliate Programs
Cost per Sale (CPS)
Section: Types of Affiliate Programs
Payout:
• 7% of sale
You only pay for a specific action taken, typically a flat amount.
Cost per Action (CPA)
Section: Types of Affiliate Programs
Cost per Action (CPA)
Section: Types of Affiliate Programs
Payout:
• $1 per download
How Does Affiliate Marketing Work?
• Based on links
• Each affiliate gets their own unique links
• When a sale is made, the system can tell which affiliate referred the sale because the unique link that was used is tied back to the affiliate
The Tracking Process
Section: How Does Affiliate Marketing Work?
The Tracking Process
Section: How Does Affiliate Marketing Work?
• Just like if you put a unique phone number on each business card you handed out
• Which business card drove a call? Just look at the unique phone number!
Affiliate Systems
Section: How Does Affiliate Marketing Work?
• Once you install an affiliate system, the whole tracking and payment calculations happen automatically.
Affiliate Software Choices
Section: How Does Affiliate Marketing Work?
Affiliate Network
3rd party/intermediary between advertisers and affiliates.
Self-Managed Software
Easy-to-use software that provides all the tracking/technology to run your own program.
Affiliates
Network
Advertisers
Affiliates
Advertiser
Affiliate Software Choices - Pros
Section: How Does Affiliate Marketing Work?
Affiliate Network
Immediate access to thousands of affiliates
They manage affiliate relationships
Don’t worry about individual affiliate payments yourself
Built-in communication tools
Management team provided to you (for extra cost).
Other services provided (for extra cost)
Software
Much less expensive
Much better for SEO/increasing site rankings
Complete branding control
Affiliate Software Choices - Cons
Section: How Does Affiliate Marketing Work?
Affiliate Network
Expensive to start
Must pay fixed fees to affiliate network monthly
For affiliates to join, they must be a part of the network you choose
Software
Don’t have access to thousands of affiliates immediately, must work harder to promote the program
Manage payments yourself
Manage affiliate relationships & support yourself
Affiliate System Choices
Section: How Does Affiliate Marketing Work?
Affiliate Network Software
Starting & Running a Successful Program
Step #1: Affiliate Network
Section: Starting & Running a Successful Program
Choose an affiliate network or choose your affiliate software
Step #2: Competitive Research
Section: Starting & Running a Successful Program
Must research companies like yours that have affiliate programs so yours will be competitive.
Questions to answer:1. How much do competitors offer for commissions?2. Are commissions 1-time or recurring?3. What kind of resources do competitors provide their affiliates?
1. Banner ads2. Videos3. Drafted emails4. Custom landing pages
4. How long after a visit is generated will competitors pay for sales from that visitor?
5. What kind of advertising techniques do competitors disallow?6. How often do affiliates get paid?
Step #2: Competitive Research
Section: Starting & Running a Successful Program
Tip: Most companies who run an affiliate program have a “partners” page or “affiliate” page which outlines the answers to
these questions.
Step #2: Competitive Research
Section: Starting & Running a Successful Program
Example: Benchmark Email
Step #3: Affiliate Terms & Conditions
Section: Starting & Running a Successful Program
• Your affiliate program Terms will dictate the rules of your program.
• Keep in mind that these rules must be enforceable
• These rules need to be in-line with or better than your competitors
Step #3: Affiliate Terms & Conditions
Section: Starting & Running a Successful Program
What to Include:
1. What exactly constitutes a commissionable event?
2. What are your commissions? % or Fixed?
3. 1-time payment or recurring payments?
4. How many days will you attribute a sale to an affiliate?
5. How often will you pay affiliates? Do they have to reach a commission balance before payout?
6. Do you accept international sales/traffic?
7. How are they allowed to promote your program? What’s prohibited?
Step #3: Affiliate Terms & Conditions
Section: Starting & Running a Successful Program
How are They Allowed to Promote Your Program?
1. Can the affiliate use your brand name? In URL, in ad text, in creative?
2. Can the affiliate bid, in PPC, on your brand name?
3. Can the affiliate use PPC, SEO, social media, email?
4. Will you accept incentivized traffic?
5. Can affiliates promote you with pop-ups?
Step #3: Affiliate Terms & Conditions
Section: Starting & Running a Successful Program
Example: Brand Name PPC Bidding
Step #4: Affiliate Support Materials
Section: Starting & Running a Successful Program
• Banner ads
• Drafted emails they can use
• Reports they can promote with your links inside
• Videos
• Custom landing pages just for affiliates
• Data feed (for eCommerce sites)
• Customer testimonials they can use
Step #5: Promote Your Program
Section: Starting & Running a Successful Program
• Create a page on your website for the program
• Search for relevant sites in your niche and reach out to their webmasters soliciting participation.– Complimentary services– Current partners– Review websites– Deal websites– Personal blogs
• If in affiliate network, pay to send out a mass email to publishers in a specific vertical
Step #6: Management Ongoing
Section: Starting & Running a Successful Program
• Typical time commitment: 1-2 hours per day.
• Approve or deny publishers that apply
• Answer publisher questions or issues
• Accommodate individual publisher requests
• Police current publishers to ensure compliance
Types of Publisher Business Models
Coupon Websites
Section: Types of Publisher Business Models
Lead Farms
Section: Types of Publisher Business Models
Review Website
Section: Types of Publisher Business Models
Cash Back Website
Section: Types of Publisher Business Models
Virtual Currency
Section: Types of Publisher Business Models
Incentive
Section: Types of Publisher Business Models
Arbitrage
Section: Types of Publisher Business Models
Blog
Section: Types of Publisher Business Models
How to Become an Affiliate Yourself
Step 1: What Would Help Your Customers?
Section: How to Become and Affiliate Yourself
• Decide what types of companies you want to promote before looking for offers.
• Examples:– A website design company can also promote stock
photo websites or website hosting companies
– A recycling center could promote green home products
– Yoga instructors could promote online stores selling Yoga equipment
Step 2: Determine Promotion Strategy
Section: How to Become and Affiliate Yourself
• How will you promote the other companies in a way that customers will appreciate?
• Examples:– Free guide you can offer that includes links to
affiliate offers
– Occasionally promote them via your current email list
– Place them in a “resources” or “recommended partners” section on your website
Step 3: Join Affiliate Network
Section: How to Become and Affiliate Yourself
• Apply to an affiliate network (like www.cj.com) to browse offers/companies you can promote.
Step 4: Apply for Offers & Get Links
Section: How to Become and Affiliate Yourself
• Browse through companies inside the affiliate network and apply to them.
• Once accepted, include their provided links in your promotional materials!
Review
Review
1. What is Affiliate Marketing?
2. Types of Affiliate Programs (CPS, CPA, CPL)
3. How Does it Work?
4. Starting & Running a Successful Program
5. Types of Publisher Business Models
6. How to Become an Affiliate Yourself
Thank You
Contact Information- [email protected] 503.595.6050 x233- Twitter.com/nickherinckx- LinkedIn.com/in/nickherinckx
Questions?