Formic Media Seminar Series:Affiliate Marketing

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www.FormicMedia.com

John McPhee | johnm@formicmedia.com

Sponsored by:Spool Video

www.FormicMedia.com

Brian Schatz| brian@spoolvideo.com

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

nick@anvilmediainc.com

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- nick@anvilmediainc.com- 503.595.6050 x233- Twitter.com/nickherinckx- LinkedIn.com/in/nickherinckx

Questions?