Affiliate Marketing and Performance Marketing

March 12, 2009
By Lisa Barone in Internet Marketing Conferences

I’m going to pretend to understand affiliate marketing! Ready for this? I’m sure it’ll be amusing. At least for you folks at home. I’m probably going to want to pull my hair out.

Lisa Riolo is moderating speakers Adam Jewell, Elisabeth Archambault, Steve Schaffer and Missy Ward.  We’re starting very, very late, so let’s hop in.

Elisabeth is up first.  I remember her from PubCon. She’s super smart.

Actually, Elisabeth is giving the exact same presentation that she gave at PubCon 2008. Which I already liveblogged. You can go read it there.  I don’t like 100 percent recycled presentations and there’s no need to re-type it all out.

Up next is Adam.

Your Web site has one goal – to make as much money as possible. Is your paid search program really that good? Is your cost of marketing from PPC less than your affiliate program? Do you have a traditional agency that puts up a few keywords and calls it a day? Is the emphasis of your PPC program on managing bids or making more sales?

What pressures do you face as a merchant?

  • The economy is in the tank. There’s little to any growth right now. Virtually everyone is concerned about cutting back on spending.
  • Your budgets may be getting cut. You are feeling the pinch. Lower revenue = lower budgets.
  • It can be tough to find talented search people. Talent isn’t cheap.
  • You need to be able to trust affiliates. Will they adhere to bidding rules on brand terms and any restrictions on 3rd party brand terms?
  • Are you focused on big management or creating a conversation with your customers?

Search marketing is conversational marketing

  • Which ad is the consumer going to respond to?
  • Does the time of day matter?
  • Does the position on the page matter?

What is the Perspective of the Affiliate?

  • Affiliates put in the time and money up front. There is no guaranteed payoff. They want to be reasonably sure it will be a profitable endeavor.
  • Affiliates are looking for consistency. Changes in program terms can cause problems.
  • Is the site set up to convert traffic? Landing pages need to be available to map keyword searches so that consumers can find exactly what they want.
  • What are the return rates? High return rates can be okay as long as they are disclosed up front.
  • Is the affiliate competing with other programs for credit for sales? Are affiliates sales backed out if another media program sets a cookie somewhere along the line?

Adam shows a bunch of cool case studies and examples. I’ll save that info for the people who actually paid the cash to be here. ;)  Too many screenshots.

How do you maximize revenue and minimize headaches?

  • Do the math – PPC vs Affiliate — What generates  sales at a lower total cost?
  • Give the affiliate manager and the few affiliates for direct linking
  • Test, test, test and get the Web site conversion rates up
  • Consider the reality of search
  • Put policies aside, focus on the bottom line, take the steps that are most profitable for your business.

Steve is up next.  We have 15 minutes left and two speakers left to go. Holy Jesus. You can thank the session before that went 20 minutes over.

The industry started as affiliate marketing. Web sites earned a commission by putting links on their sites. It took awhile to grow. Some sites became successful only on CPA and then search advertising really kick started performance marketing.  When you hear someone say they’re an affiliate, there are many types:

  • Direct linking
  • Performance publishers
  • Niche sites and blogs
  • Coupon and deal sites
  • Cashback or points

Business Models

  • Direct relationship deals
  • Affiliate networks
  • Sub-affiliates and ad networks

Retailers spend more money per new customer in other chanels.

Why Performance Marketing Works

  • It’s a win-win for the publisher and the merchant.
  • The merchant gets to determine how much an action is worth.
  • It’s very cost effective

Aw, and that’s it. He had to keep it super short. We’re very short on time here.

Up next is Missy.

She’s going to stay seated because she can’t see really far away and it makes her dizzy. It’s a “I have new contacts” issue. Poor Missy.

Rewards vs Risk

  • Affiliate Program Rewards: Minimum start up cost. Inexpensive customer acquisition. Sharp, driven sales force. Brand awareness, loyalty. SEM strategy.
  • Affiliate Program Hazards: Fraud, brand damage and legal issues.

Things you must decide on before starting an affiliate program: commission structure, payment threshold, marketing policies, affiliate approval criteria, tracking, management, etc. Just because you build it, doesn’t mean that they will come.

Strategies to get affiliates to notice you:

  • Provide tutorials
  • Share Metrics
  • Interact and get friendly
  • Get social – blog, Facebook, twitter – provide more information about your program. Get it out there.
  • Attend affiliate marketing events and organize meet ups
  • Speak and get published
  • Establish relationships with journalists and bloggers – send them birthday cards! Take them out to lunch. Do guest posts on blogs.
  • Get listed in affiliate directories
  • Advertise to recruit affiliates

If you are going to start an affiliate program, make sure you have the time and resources to invest in it. Otherwise, you’ll wind up with a program that doesn’t perform for you.

And that’s it. :( I feel bad that the speakers had to cut down their presentations so much. Stick to your time limits, people. And don’t recycle presentations word for word. It’s bad form and I’m done re-liveblogging the same thing on multiple occassions.

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