Targeting Value Added Affiliates

Affiliate Summit West, 2012

Robert GlazerFounder, Acceleration Partners

Angel DjambazovOwner, Custom Tailored Marketing

Why Value Added Affiliates?

Affiliate marketing is the 90-10 rule

The goal for affiliate marketing should be new customer acquisition

A large portion of the industry does not understand affiliate attribution

Affiliate sales are inflated 200-300% across the board

This inflation is due to merchant pressure but does not reflect real sales.

To understand the importance of value added affiliates, you need to understand why many affiliates today are not value added

What’s a Non Value Added Affiliate?

Most affiliate sales are not generated by unique or incremental new customers and are not de-duped against other channels

Companies are paying commission levels designed for new customer acquisition to a large group of affiliates who are just attracting their current customers, especially those who are already in the cart

When a well known affiliate program puts that their conversion rate at 12% on marketing materials, it’s clear that they don’t understand where sales are coming from. World class retailers do not have close to a 12% conversion ratio.

How Does Double Counting Happen?

• You have a lot of players on your marketing team who are working with consultants or employees in each of these areas

SEO Consultant

Affiliates & Affiliate Manager

PPC Consultant

Email Marketer

Re-Targeting Sites Display Ads

When 1+1+1+1+1+1=2

Total Company Revenue:

$2M

SEO: $1M

Affiliates: $1M

PPC:$1M

Email: $1M

Re-Targeting

Sites: $1M

Display Ads: $1M

• Everyone is taking credit for the same sale• When it is time to report, each channel acts like the others

do not exist

Follow The Clickpath

Organic Search

Paid Advertising

Affiliate

• This is how conversions happens in reality• Many low value affiliates are always at the end of this

chain (often a customer already in the cart), taking credit for the whole sale

Email Organic Search Display Affiliate Paid

Advertising

Or like this:

So how much is that conversion really costing you?

See What Analytics Can Show You

Email: PPC:

Affiliates:

Organic Search

Display & Retargeti

ng:

Social

* Incremental Affiliate Sales

Who is a Not a Value Added Affiliate?

Affiliates whose methods cannot be understood (where there is smoke, there is fire)

Affiliates who bought prebuilt template affiliate sites

Trademark bidders and poachers (PPC and SEO)

Cookie stuffers and sites that try to get forced clicks (coupon sites are big offenders)

Certain coupon sites. Can be especially true if your company is the only one selling a product/service with no direct competition

Toolbars or other software where the ability to uninstall is difficult or impossible. No intent by the user

Affiliates who take orders from value added affiliates

Example of Non-Value Added

Forced click & incorrect expiration

Not a real offer

Six month expired offer

Methods to Identify Low Value or Fraud

Research new affiliates and their promotional methods

Look for sudden spikes in traffic, transactions or conversions (8%+ is suspicious for non coupon sites)

If network displays referring url, check this frequently with new or high volume affiliates

Compare first referrer to last referrer cookie

Beware of conversions that come through proxies or thin sites with very high Alexa rankings (no human traffic)

Use resources like BrandVerity, AffiliateFairPlay, RiskIQ, and Fraudlogix

SAS Clickstream Tool

Who is a Value Added Affiliate?

Ability to affect a purchasing decision or vendor, not after the decision has been made

Ability to develop brand loyalty in a new audience They have the traffic or mindshare that you want 75%+ new customer referrals 2%-3%  conversion rate Promotion is often at the product level

How Do I Find Value Added Affiliates?

Need to think outside the box

Approach like business development or sales opportunity. Create target list, outreach and follow-up

Approach like a consumer would. Who uses this service/product, who benefits?

Who sells complimentary products/services?

Do they create content? Do they create community?

Do they have a major reach (Facebook, E-mail, etc)?

Tactics

Research toolso Who has the SEO or traffic you want? (SEM Rush, Alexa)

o Third party software (ie syntryx)

Deep dive into your analytics to see what sites referred quality traffic in the past

Follow-up on natural links, people who did blog posts, reviews etc. to ask them about becoming an affiliate

Reach out to your best customers

Use social analytics tools that extend past your site’s analytics (Radian 6)

Real personal 1-1 outreach (phone, email, affiliate events, etc.)

Tactics Cont.

• PR and announcing your program (ABW)

• Set up creatives and data feeds by category to attract new verticals (i.e. wedding, gifts, etc)

• Use 3rd party tools to extend creative reach

Trade associations

Promotions or contests for high value referrals

Implement new technology to open doors (i.e. pay-per-call)

Example #1:

• Professional Photographers

• Wedding Service Providers

• Mom Blogs

• Storefronts (integrated with SAS)o Professional Photographers

o School PTA

o Non-Profits

http://www.tinyprints.com/storefront/jennycrugerphotography

http://www.tinyprints.com/storefront/laef

The Results

• 900 Storefronts in the first year

• On target for $1M in revenue

• Major new product initiative for the company

• Less than 20 beta non-profits and PTA’s raised almost $125k in Nov/Dec

• Our Storefront members are doing all of the selling and marketing for us. They are giving customers a compelling (non discount oriented) reason to choose us over a competitor.

Example #2:

• Photo enthusiast websites (ie: Pentax forums, Nikon Forums)

• Professional photographers

• Scrapbookers, genealogists, yearbook creators

Example #2:

• Blurb book authors• Affiliate widget for people to promote their books and

show preview pages http://www.blurb.com/affiliates/bookshow

• Mom blog contests and giveaways• Free book offer, then a contest to win $75 for blogging

and talking about their book. Blogger chose winner and 50 sites participated.

• http://eighteen25.blogspot.com/2011/12/giveaway-blurb-planner.html

• Blurb’s marketing team is leveraging affiliate base for new product launches (ie Instagram photo books, day planners, Facebook books)

Example #3: Sparkling New Hot Products

• Affiliates with a niche audience can sometimes identify hot products that you may not know are best sellers. o Onlineshoes and Nursemate

Example #3: Sparkling New Hot Products

• Affiliates with niche audience can sometimes identify hot products you may not know are best sellers. o Onlineshoes and Nursemateso Jones Soda

Example #3: Sparkling New Hot Products

• Affiliates with niche audience can sometimes identify hot products you may not know are best sellers. o Onlineshoes and Nursemateso Jones Soda

Example #3: Sparkling New Hot Products

• Affiliates with niche audience can sometimes identify hot products you may not know are best sellers. o Onlineshoes and Nursemateso Jones Soda

Example #4: Blogger Outreach

• Abe’s Market natural and organic retailer with a wide variety of divergent products from small manufacturers. Challenge was to move them beyond coupons in a way that spoke to that diversity while highlighting the Abe’s Brand.

• Outreach to Mom Bloggers via a) Product samplesb) A fee plus structurec) A monthly editorial calendar. Invited bloggers to come put forward various promotions that were right for their audience (i.e. Gift card giveaways).

• Provided baseline training in affiliate marketing for those unfamiliar with the channel.

Example #4: Blogger Outreach

• Challenge with The SafeCig was personalizesocial good message critical to new owner’sbrand focus. Key to that was telling personal stories.

• Searched for and found a blogger who had a large engaged audience, whose ideals aligned with the owner’s, and who was bravely willing to share her story.

• Liz Strauss has helped evangalize the brandvia EmpireAvenue, Facebook, Twitter, andat shows. She also wrote an extremelymoving unprompted personal experience that made SafeCig owner James Cameron tear up.

Make Your Program Attractive To Value Added Affiliates

• Low quality affiliates will drive away value added affiliates if their clicks are always hijacked.

• Have a strict T&C and enforce it. If it looks like open season for PPC bidding etc., it will drive quality affiliates away.

• You don’t need 200+ coupon sites in your program. Too hard to police.

• Create policies, terms and technology that rewards the desired behavioro Custom coupons that reward original site that posted if scraped o Mid-cart checkout rule

ExampleMID-CHECKOUT COMMISSION REDUCTION & OVERWRITE RULE

Tiny Prints uses a dynamic pixel system that may make changes to the standard commission in the case of a mid-checkout referral, which is defined as a cookie that is set within the last ten minutes before purchase. Given the extensive personalization required for most of our orders, the average visit to order time is usually days or hours, not minutes. By reducing our commission on these types of referrals and by closely monitoring the quality of traffic we receive from each affiliate, we will be able to pay out higher commissions for driving new customers and traffic. This logic also gives full credit to the first referring affiliate in the case that a second affiliate enters within this last ten minutes.

Scenarios

• Two affiliates outside of ten minutes before sale, normal "last in" logic applies

• One affiliate outside of ten minutes before sale, one within. "Last in" affiliate will receive 2% lowered commission and first affiliate will receive full commission.

• Single affiliate within last ten minutes, 2% commission will apply• Two affiliates within last ten minutes, last in will receive the reduced 2%

commission.

Summary

• Know what’s valuable and what’s not for your business

• Focus your program on new customer acquisition and measure attribution

• Put a premium on new customer creation

• Make sure your affiliate team has the sales, marketing and business development skills needed to grow your program

• Have terms and conditions that discourage low value affiliates from joining your program in the first place

• Remember, anything that seems too good to be true in affiliate marketing usually is

Questions? Contact Info

Robert GlazerFounder, Acceleration Partners

rglazer@acceleration-partners.comTwitter: @affiliatemgr

(t) (617) 264-0334

Angel DjambazovOwner, Custom Tailored Marketing

customtailoredmarketing@gmail.comTwitter: @Djambazov