making the longtail wag - owen hewitson
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Making the Long Tail Wag
Owen HewitsonClient StrategistAffiliate Window & buy.at
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I. Definitions and Context
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What is the ‘Long Tail’?“Using the efficient economics of online retail to aggregate a large inventory of relatively low sellers” – Chris Anderson, The Long Tail: How Endless Choice is Creating Unlimited Demand, 2004
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What is the ‘Long Tail’?
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Why would you want to cultivate an affiliate Long Tail?
Find an audience for all types of products
No cost to maintaining as long a tail as you like
Extend your reach over the wider web
… And of the search spaceFree advertising
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What can the Long Tail do for you?
2007 2008 2009 20100
10
20
30
40
50
60
70
Sales from Top 10 Sales from Long Tail
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II. Advertisers’ Experiences
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Why aren’t there more
affiliates referring
sales?
Why am I so reliant on a
few top players?
Why shouldn’t I just bring my top
affiliates in-house?
Why can’t I just cull non-
performers?
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Affiliate Window’s Top 200 vs Long Tail
2007 2008 2009 2010 2011
Total Commis-sion
Top 200 Commission
Longtail Commission
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Amongst the top 20 programmes on Affiliate Window...
2716 Average affiliates on a programme
16% Average affiliates which have driven at least one sale in 2011
47% Average of affiliates which have driven at least one click in 2011
76% Average of total sales driven by top 10 affiliates
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Teleco
ms
Teleco
ms
Teleco
ms
Fash
ion
Fash
ion
Fash
ionRetai
lRetai
lRetai
l
Trave
l
Trave
l
Trave
l
Finan
ce
Finan
ce
Finan
ce
Electr
icals
Electr
icals
Electr
icals
0%
10%
20%
30%
40%
50%
60%
70%
80%
11%
28%
18%21%
17%
27%25%
17%
22%
6%
16%
9%
32%
7%4%
18%21%
14%
37%
59% 58%
49%
44%
71%
51%
43%
53%
33%
48%
37%
60%
26%
20%
59%
64%
44%Affiliates generating sales YTD
Affiliates generating clicks YTD
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Teleco
ms
Teleco
ms
Teleco
ms
Fash
ion
Fash
ion
Fash
ionRetai
lRetai
lRetai
l
Trave
l
Trave
l
Trave
l
Finan
ce
Finan
ce
Finan
ce
Electr
icals
Electr
icals
Electr
icals
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
61%
91%88%
68%
76% 76%
55%
70%67%
84%
69%
94% 95% 95%
70%
59%
71%68%
Sales gen-erated by top 10 affil-iates YTD
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Where is your Long Tail?TOP 10Autonomous; mature; strong relationships; respond quicklyLONG TAILSmall sales volumes; moderate click-throughs and good traffic/content
INACTIVENo sales; small or no click-throughs; not started or started but stopped
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VSAdvocacy
Compliance
Problems advertisers face with the Long Tail
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VS
Plurality
Control
Problems advertisers face with the Long Tail
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A Problem of Scalability?
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A Problem of Scalability?
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Part III – Managing the Long Tail Successfully
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Long Tail optimisation is like SEO
January
Marc
hM
ay July
September
November
January
Marc
hM
ay July
September
November
Long Tail Sales VolumeTop 10 Sales Volume
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1. What kind of Long Tail do you want?
Is it necessary to cull existing inactive affiliates to
focus on the Long Tail?
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1. What kind of Long Tail do you want?
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1. What kind of Long Tail do you want?
Is it necessary to recruit a Long Tail or are they
already members of your programme?
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Recruitment is not an issue but relevance is.... We use our PR
team to feed us new affiliates
We ask potential resellers to start as affiliates.... Many find us through the
affiliate page on our site
We target and recruit new
affiliates according to seasonality.... We don’t expect them all to be
active all the time
The Long Tail of our affiliate
programme is the Long Tail of
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2. What constitutes the Long Tail?
The importance of a twin-track approach
First step is to segment the Long Tail by re-categorising it
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3. What constitutes the Long Tail?
Mid-tier
Lower-tier
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3. What constitutes the Long Tail?
On-brand
Off-brand
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3. What constitutes the Long Tail?
New
Custome
rs
Lower
Churn
Higher
AOV
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3. Understanding what makes the Long Tail the Long Tail
Affiliate Marketing is not a zero-sum game where the Long Tail drops as top performers rise
The Long Tail is not a product of mass cookie-overwriting or other affiliates ‘stealing’ sales
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3. Understanding what makes the Long Tail the Long Tail
Nevertheless, important to understand the customer’s path to purchase within the affiliate
channel
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4. Benchmarking the Long Tail
We want our Long Tail to
convert at half the rate of the programme as
a whole
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4. Benchmarking the Long Tail
We want our Long Tail to
convert at half the rate of the programme as
a whole
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4. Benchmarking the Long TailWe want to
decrease our reliance on the
top 20 and increase the proportion of
revenue-generating affiliates
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4. Benchmarking the Long TailWe look at the
relevance of placement we
receive on affiliates’ sites and the click-
through rate they produce
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4. Benchmarking the Long Tail
TOP 10
LONG TAIL
LONG TAIL THEN
LONG TAIL NOW
We look at month-on-month growth of the Long Tail rather than the proportion of
sales
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5. Treating the Long Tail Differently – Quick Wins
Flexibility on copy and creative
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5. Treating the Long Tail Differently – Quick Wins
Products to review
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5. Treating the Long Tail Differently – Quick Wins
Prizes and Rewards
We run a ‘Publisher of the Month’ award –
show us how you promote and you could win a £50
gift card
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5. Treating the Long Tail Differently – Quick Wins
Cash incentives
We email our Long Tail with
an personalised invitation: £10 for your ‘next’
sale
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5. Treating the Long Tail Differently – Quick Wins
Exclusive customer incentives
When traffic doesn’t convert
we offer an exclusive 10% code on one of our products
directing to a co-branded page
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5. Treating the Long Tail Differently – Quick Wins
On-site recruitment
page
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Part IV: Is this Enough?
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Do we need to look at leveraging CPA-based display opportunities with Long Tail affiliates on a post-view
cookie?
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AuthorityEngagementTrustPassion
To their users…
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RevenueRecognitionExclusivesAttention
To affiliate marketing…
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Last Wins
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Exposure: 950,000Cost: £10,500
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800k impressions/week
£1000/per week
Top UK
Cashback
Site
Top UK
Voucher
Code Site
2.5 million addresses
In packages starting from £1500
Exposure: Cost:
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As top affiliates pursue fixed-fee tenancies...
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Advantages
Scalable – advertisers hand-pick the sites rather than buying blind from a display network
Recognises affiliates as a brand force as well as a sales force
Retains the commitment to the CPA model
More control in targeting products and messaging to different audiences
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Advantages
Fewer concerns around ‘incrementality’ compared to re-targeting
Supports content and more effective at encouraging clicks than banner ads
Possibility to access display networks’ inventories on a CPA through the affiliate channel
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Making the Long Tail Wag
Owen HewitsonClient StrategistAffiliate Window & buy.at