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Slide 1: Affiliate Marketing: A Better Alternative? Content Revenue Strategies NY November 5th, 2009 Moderator: Steve Schaffer
Slide 2: Session Agenda • Questions About the Audience • Panel Introductions • Performance Marketing Overview • Panel Discussion -- I will Ask the First Few Questions • Questions From the Audience • Panel Discussion – Questions of each other 11/5/2009 2
Slide 3: Our Panel Steve Schaffer Founder of Vertive and publisher of Offers.com @SteveSchaffer Brook Schaaf Founder of Schaaf Consulting @BrookSchaaf Shawn Collins Co-Founder of Affiliate Summit @AffiliateTip Peter Bordes CEO of MediaTrust @MediaTrustPete Will Martin-Gill Director, Internet Marketing at eBay, Inc. @eBay_affiliates 11/5/2009 Gil Abir VP, Corporate Partnerships, Payoneer, Inc. 3
Slide 4: What is Affiliate Marketing? • Three primary forms of online marketing – Pay per impression – Pay per click – Pay for performance (sales or leads) • For this panel we are focusing on Pay for Performance – Also called Performance Marketing or Affiliate Marketing 11/5/2009 4
Slide 5: Publisher Business Models • Direct-linking affiliates (Search & Ad Networks) • Niche sites and blogs • Coupon and deal sites • Cash back or points 11/5/2009 5
Slide 6: Three Main Types of Actions Transaction Type Lead Types of Offers Form or application Loans, insurance, car, free trial Account/Subscription Credit cards, subscriptions, memberships Payment Method Per lead fee Payment Details Merchant pays ~$25 for a customer who is worth ~$50 Merchant pays a percent of the value of initial sale or Pays a predetermined bounty often based on the estimated lifetime value Merchant pays a commission on the transaction (~3-10%) 6 Pay-per-sale or revenue share New Customer Sale Retail/Service Gifts, shoes, electronics, travel Percent of the sale (commission) 11/5/2009
Slide 7: How Big is the Industry? According to one source: Source: Forrester Research, Inc. 11/5/2009 7
Slide 8: U.S. Affiliate Landscape This is just 25% of ONE network’s (LinkShare) affiliate universe! 11/5/2009 8
Slide 9: Why Such Rapid Growth? Revenue Spend Measurable, Performance-based ROI+ for merchants, $$$ for publishers More consumers looking online for info, deals 11/5/2009 New tools are making it easier to implement 9
Slide 10: Why Publishers Like Affiliate Marketing • Performance model pays publishers for the quality of their work • More flexibility for ad integration, adding to a publisher’s content • Connect directly with top-tier advertisers, no insertion orders required • More control over the ads displayed 11/5/2009 10
Slide 11: What We Hear “Many publishers are reporting between a 10 to 12% increase in payouts on select non-premium inventory when using affiliate marketing vs. CPC. CPM-based publishers are reporting similar increases on the same type of inventory.” --Mike Oulette, Director, Publisher Development, Commission Junction 11/5/2009 11
Slide 12: Example: Spadout.com The keyword “gloves” takes the reader to a page featuring gloves on sale – each glove listing is an affiliate link “Our audience leaves Spadout knowing exactly what they want to buy, where they want to buy it, and confident they are getting a fair price. This creates high converting traffic that can outperform other websites’ revenue.” Mark Silliman, Spadout.com “Since we became free of untargeted advertising, our revenue has increased and we're 100% on mission: take readers and make high, fast converting shoppers." 11/5/2009 12
Slide 13: Example: ShopWiki.com A click on the “shoes” link takes the consumer to a buying guide ShopWiki is educating the consumer and moving them closer to a sale. Clicking on “boots” reveals boots on sale from popular merchants that have affiliate relationships with ShopWiki “Performance based advertising allowed us to take on the appropriate risk (instead of our advertisers), so we could find innovative ways of putting information on our site that would optimize our yield and still deliver high quality traffic.” James Keating, ShopWiki.com “With performance based advertising, consumers vote with their dollars as to how much they like a merchant. We can put those advertisers at the top of the list so consumers find them faster and they convert faster. “ 11/5/2009 13
Slide 14: Example: TopDatingTips.com Content site uses both contextual ads and affiliate links 11/5/2009 14
Slide 15: Where Can I Learn More? 11/5/2009 15
Slide 16: Questions for Panel 11/5/2009 16