Affiliate marketing in emerging markets

1 million conversions later

Dorin Boerescu, CEO 2Parale & 2Leva

2Parale – Biggest affiliate Romanian network

• Founded in 2009

• +350 advertisers

• +33.000 affiliates

• More than 1 million conversions – >660k sales (+€20 million sales for advertisers)

– >540k leads

• More than €1.5M paid commissions

• Realtime.2parale.ro – all conversions in real time

• iOS app

2Leva

• Founded in 2011

• +35 advertisers

• +4,000 affiliates

• More than 100k conversions

– >80k sales (+€2 million sales for advertisers)

– >34k leads

• Realtime.2leva.bg/realtime

8 emerging markets

• Romania

• Bulgaria

• Croatia

• Slovenia

• Hungary

• Czech Republic

• Slovakia

• Poland

8 markets at a glance

• 96 million people

• 51 million internet users

• 53% average internet penetration

• €1bn online advertising market

• €4.5bn offline advertising

• €12bn ecommerce

• €30 million affiliate marketing budgets

8 markets sizes

Population Online advertising market

€ Offline advertising market

€

Romania 19M 46M 303M

Bulgaria 7.3M 24M 169M

Croatia 4.2M 14M 195M

Slovenia 2M 16M 140M

Hungary 10M 120M 444M

Slovakia 5M 65M 300M

Czech Republik 10.5M 291M 1.3bn

Poland 38M 496M 1.730bn

Total 96M €1bn €4.6 bn

8 markets sizes

Ecommerce market € Affiliate marketing budgets €

Romania 1bn 2M

Bulgaria 300M 300k

Croatia N/A 300k

Slovenia 200M N/A

Hungary 1.3bn 1M

Slovakia 600M 500k

Czech Republik 2.7bn 5M

Poland 5.9bn 20M

Total €12.3bn €29.1M

Big guys are already here

• International/regional big players from ecommerce/advertising/affiliate

• Zanox, Tradedoubler, Vodafone, PayPal, PayU, Opencart, Magento, PrestaShop, Google, Sociomantic, AdPilot, Allegro/Naspers, BonPrix, Facebook etc.

Market specifics

• Young and undeveloped: Romania (2 significant networks), Bulgaria (1.5 ), Croatia&Slovenia (none), Hungary (1?) but with a fast growing pace

• Fast rise and fall of daily deals industry (led by international players like Groupon or regional big players like Kolektiva) – 2011-2013

• They drove a higher acceptance of online payments (5-30%) – for the benefit of all ecommerce, and a fast development of affiliate industry.

Romanian affiliate market

• Ecommerce + CPS based • 50-100% annual growth 2012-2016 • Networks:

– 2Parale – Profitshare – Forestview – Piata digitala

• Clients: emag (Naspers), Elefant (big bookstore, now moving to an everything store), regional and local players in Fashion, Home&deco, Computers&Electronics

• ~10% of the e-shops are active in affiliate marketing.

Romanian affiliate market

• Telecom is coming – Vodafone program active in 2Parale

• Banks, insurance - testing

• Big publishers and media groups – moving to ecommerce and affiliate projects

• Cash-back started in 2012/2013

• Small players on vouchers or emailing

• Strong on PPC and comparision engines/agregators

• Conversion rate 1-3% (network average)

• Average basket value: €37 - 7% average commission

• 4.5k e-shops, €1bn ecommerce

Poland affiliate market • One of the oldest in region – definitely the biggest • Big “offline” clients - banks, automotive, telecom, FMCG (e.g. Adidas,

T-mobile, Kinder, Peugeot, Pepsi) • CPC/CPL based – strong on finance/insurance • Big publishers and media groups as affiliates • Networks:

– Tradedoubler – Novem – Afilo – Netsales – Zanox – Netaffiliation – Tradetracker

• 12k e-shops, €62 average basket value, 24% of eshops using aff mkg • €5.9bn ecommerce, €500M online advertising, €20M affiliate budgets

Sources

• Mediafact Book Romania - by initiative

• Do you CEE? - by Gemius/IAB

• ADEX Benchmark - by IHS/IAB

• ROads - by pwc/IAB

• Ro e-commerce landscape - by GPeC.ro

• Is Polish e-commerce booming? - by OEX Divante

• Ecommerce Poland 2013 – by dotcom river

• 2Parale data • NB all data are for 2012/2013

Affiliate profile, behavior, traffic sources

Romania, 2013

Affiliate profile – Romania

• Market research by 2Parale

• Published in august 2013

• 851 affiliates responded

Gender

71%

29%

Male

Female

Age

25-34

18-24

35-45

45-54

under 18 55-64

When did you enter in affiliate marketing?

53%

23%

11% 6% 7%

2013 2012 2011 2010 before 2009

how much do you earn monthly from aff mkg?

90%

7% 2% 1%

less than €250 €250-1000 €1000-€10,000 €10,000 -

Direct traffic sources

54%

41%

30%

22%

21% social media

personal blog

niche content projects

reviews sites

general publishingproject

How much do you reinvest from your affiliate income?

43%

29%

11% 17%

I don't reinvest 1%-20% 21%-40% more than 40%

28% of affiliates invest more than 20%

Best practice

• Affiliates who invest constantly may be your best long term partners.

Help them to get better ROI - pay them faster, offer them incentives for bigger performance, share more information.

In how many programs are you active?

<10 80%

80%

13% 4%

3%

less than 10

11-50

51-100

more than 100

Best practice

• Most likely – you have 1/10th of your affiliates attention.

Be ACTIVE and RELEVANT!

What are the most important criteria to try a new affiliate program?

79%

48%

39%

31%

22% 22%

% of commission advertisersreputation

tools provided(banners, feeds

etc.)

advertiserscategory

% of rejectedcommissions

terms andconditions of

program

Best practice

• There are few things to draw affiliates attention when starting a new program.

Start with a BIGGER COMMISSION than

category average (at least for a while)

Top reasons to stop promoting an affiliate program

54% 52%

36% 35% 30% 27%

low eCPC % of rejectedcommissions

too high

late payments available tools low conversionrate

weakcommunication

with aff man

Best practice

• You don’t have many aspects under your control in keeping your affiliates active

• Pay the commissions as fast as you can

• Listen. Answer. Help. Share. Be honest.

Insight

• I love the statistics from 2Parale and the fact that I receive an email immediately after I generated a commission, with details about the advertiser and the sale. Also, they have a tool to generate an affiliate link directly in the browser when you visit an advertiser website.

Thank you

dorin.boerescu@2parale.ro