Affiliate Marketing

The place to invest in Online

Marketing!

What is Affiliate Marketing?• Affiliate Marketing is a revenue sharing venture between a website owner

and an online merchant. The website owner will place advertisements on his websites to either help sell the merchant's products or to send potential customers to the merchant's website, all in exchange for a share of the profits.

• It’s the equivalent of developing a powerful online sales force paid only on commission;

• There are 4 key players in the affiliate Marketing arena:– The Merchants– Affiliate networks– Web site publishers– The customers

How does it work?

Affiliate Sites

AFFILIATE NETWORKS - Act as an intermediary between publishers (affiliates) and merchant affiliate programs.

Affiliate sites generate Sales, Leads or visitors to the merchant

The merchant pays a commission to the affiliates for each sale, lead or visitor (depends on the payment model)

The customers

Payment Models in affiliate marketing:

Every time a potential customer leaves the affiliate website by "clicking" on the link leading to the merchant's website, a certain amount of money is deposited in the affiliate's account.

This amount can be pennies or dollars depending on the product and amount of the commission.

Pay Per Click

Every time a sale is made as a result of advertising on the affiliate's website, a percentage, or commission, is deposited into the affiliate's account.

Pay Per Sale

Every time a potential client registers at the merchant's website as a result of the advertisement on the affiliate's account, a previously determined amount is deposited into the affiliate's account.

Pay Per Lead

Benefits of Affiliate Marketing

• Increased reach of the brand and its campaigns trough the network of affiliates;

• Increase in qualified traffic for the RayBan’s websites and consequent increase in sales;

• Affiliate marketing Pay-per performance schemes tend to reduce the acquisition costs;

• Pay-per-performance scheme will keep the affiliates focused on generating sales and leads to Ray.-Ban;

• Easy to recruit “new sales channels”;

• Most affiliate marketing programs are free to join. => More people are likely to join=> More reach;

• Opportunity to earn money 24 hours a day.

• One benefit the Internet provides affiliate marketers is the option of responding swiftly to new developments;

• No need to create their own product. The merchant takes care of that. For this reason you are able to get started very quickly as an affiliate marketer making money online once you have joined the merchant's affiliate program.

• No financial risk involved in signing up to the program.

• Your one job as an affiliate marketer is to promote your affiliate website.

• Unlike a traditional business you do not have to open a retail store to sell products. On the Internet sales are not dictated by your personal working hours.

• Many affiliate marketers choose to capitalize on what's going on in the world today and make product sales around that.

• Affiliate merchants make it very easy for their affiliates to make money online. They provide everything the marketing materials, they collect the money, deal with product shipping and customer service.

For Ray-Ban For Affiliates

Why invest in this channel?• It’s a win/win deal - Affiliate marketing is mutually beneficial to both the merchant and the

affiliate marketer;

• It is the most COST EFFECTIVE way to make selling products around the clock on the Internet;

Cost-effectiveness of channels for driving customer acquisition

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Em ail m arketing Affiliate m arketing Paid search Online displayadvertis ing

Mobile m arketing

Very cost-effective

Quite cost-effective

Not cost-effective

Source: E-consultancy / buy.at Affiliate Marketing Merchants Report 2007

• According to an E-consultancy report, 95% of UK merchants say Affiliate marketing is ‘very cost effective’ or ‘quite cost effective’. This compares to 90% for paid search and 82% for email marketing;

• A Pay-per-performance Affiliate Marketing program can effectively and with minimum risk:• Increase the Brand’s reach;• Increase the Brand’s sales Volume with controlled acquisition costs;• Reduce the Brand’s global acquisition costs;

• Affiliates commitment - When the merchant recruits active and determined affiliates they get their products promoted instantly without doing anything themselves. They leave it up to their growing team of committed affiliate marketers to handle all of the advertising and promotion for them.

How much to invest in Affiliate Marketing?• According to the E-consultancy report:

– Total value of online sales generated by this channel was £3.13 billion for 2007, compared to £2.16 billion in 2006;

– On average, UK merchants surveyed drive 16% of their online sales via affiliate marketing;

– On average, 18% of online marketing budget and 10% of overall marketing budget goes on affiliate marketing;

– 4 out of 5 merchants expect to be spending more on affiliate marketing in two years’ time;

Source: E-consultancy / buy.at Affiliate Marketing Merchants Report 2007

• We propose that 25% of the online budget is allocated to affiliate marketing

– It is an extremely COST EFFECTIVE way of INCREASING REACH AND SALES ;

– It is based PAY-PER-PERFORMANCE=> minimizes risk and increases control of acquisition costs;

– In a time of financial crisis this is a method that ensures the ROI;