What is Affiliate Marketing?

Presented by Donna McCarthy

October 4, 2007

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What is Affiliate Marketing?• An online marketing channel that gives businesses access to

an online “pay for performance” sales force and allows web site owners to earn additional revenue from promoting another company’s products or services.

• Stated more simply, you send people to a web site, they buy something, and you get paid a commission.

• Merchants only pay affiliate partners for results, such as a lead or a purchase “pay-for-performance”.

• Affiliates don’t carry any inventory, they just refer their visitors to the merchant’s site.

Affiliate Marketing a.k.a. . . • Also known as . . .

– Associate Program– Internet Affiliate Marketing– Direct Marketing– Performance Marketing– Partner Marketing– Pay-Per-Performance Marketing– Referral Program

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Who are the Key Players?

There are three key players in any affiliate program:

• The Affiliate (Publisher)

• The Merchant (Advertiser)

• The Affiliate Network

• The Affiliate Program Manager

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Benefits of An Affiliate Program

Benefits for Merchant . . .

• Provides an experienced, “pay for performance” sales force

• Allows immediate access to the market

• Offers market intelligence

• Increases Merchants’ exposure and brand awareness

• Merchants and Affiliates only succeed if they both succeed

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Benefits of An Affiliate Program

Benefits for Affiliate . . .

• Generate additional income

• Part time, full time, you choose

• Low (NO) barriers to entry

• A chance to partner with top brands

• No inventory, no customer service issues

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What is an Affiliate?

A person or web site that sends visitors to another web site in exchange for a commission.

Affiliates are . . .

• Publishers or Partners• Blogs or Forums • An online Marketing Sales Force

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Types of Affiliates Sites

• Shopping – site are virtual malls. The consumer shops for various brands and products on site. These sites are not driven by particular coupon or deal offer

• Coupon/Deal – most popular affiliate model. These sites are shopping sites that require merchant to provide consumer with either a coupon, percent off savings, or free shipping offer

• Comparison Shopping – sites sell items using a comparison model. These sites usually require a data feed of merchants’ products.

• Loyalty/Rewards – sites where a percent of the merchant’s commission is used to pay reward to consumer. Allows consumer to select their reward option. Rewards can include cash, airline miles, credit card points, or donation to charity or organization

Types of Affiliate Sites (cont.)

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• Content – sites are usually not shopping sites. Consumers go to sites because the content is of particular interest. Sites to particular product contained in site

• Search – affiliates promote merchants via search engine marketing, using either natural or paid search practices.

• Blogs/Forums – sites post or feature article that focus on a particular product or merchant and include an product affiliate link to the product.

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Affiliate Sites

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What is An Affiliate Network?

An Affiliate Network is a third party which acts as liaison between Affiliates and Merchants

Also. . .

• Facilitates the forming of partnerships

• Tracking, reporting and a payment form

• Creative asset repository

• And best of all . . . Charges no fee for Affiliates to join

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Affiliate Networks

(Double Click / Performics)

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Affiliate Program Management

An affiliate program manager is highly specialized. They need to know. . . – General on-line marketing practices – HTML– Search and Social Media– Site building – Ability to trouble shoot technical issues– Comprehensive knowledge of online marketing space

Options for Affiliate Program Management: – In-House affiliate program manager– Affiliate Network Client Services– Outsourced Program Manager (OPM)

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How Does It Work?

1. Affiliate downloads Merchant creative from Network 2. Consumer visits Affiliate site and clicks Merchant’s

creative3. Cookie is set on Consumer’s browser which identifies

Merchant, Affiliate and creative link4. Consumer is directed to Merchant’s website5. Consumer makes purchase from Merchant6. Merchant captures purchase information and

transmits sales file to Affiliate Network7. Or pixel, which has been added on Merchant’s cart

page, captures purchase information8. Affiliate Network tracks sales transactions and pays

Affiliates commissions

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Merchant Programs

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Affiliate Commission Models• Pay-per-Performance (Revenue Share) - affiliate commission

based on a % of the total order value

• Pay-per-Lead / Cost-per-Acquisition – affiliate commission based on a % of the total order value

• Cost per Impression / Cost Per Click - affiliate charges the merchant a fee for banner views or clicks

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Affiliate Marketing Diagram

Order Conformation Affiliate Site

Merchant Site

Online Shopper

Q & A

Questions?

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Donna C. McCarthyDirector of Performance Marketingdonna.mccarthy@thejargroup.com646-290-8659 x6006Skype:donnamccarthyTwitter: DonnaMcCarthy