innovate! new exciting applications of affiliate marketing
TRANSCRIPT
Affiliate Summit East 2010
Innovate! New Exciting Applications of Affiliate Marketing
Joe StepniewskiCo-Founder, Skimlinks
• Joseph Schumpeter defined economic innovation in “Theorie der Wirtschaftlichen Entwicklung”
– A new ‘good’ consumers aren’t familiar with
– A better quality of an existing product/service
– A new method of producing or packaging
– Finding a totally new market
What is innovation?
The Theory of Economic Development, 1934, Harvard University Press, Boston
• Mr Schumpeter said it comes from the entrepreneurs, or wild-spirits
• He coined Unternehmergeist = German for entrepreneur-spirit (entrepreneur is derived from French for “enterprise”)
• Innovation also driven by companies with resources to invest in R&D
Where does it come from?
The Theory of Economic Development, 1934, Harvard University Press, Boston
• Limited marketing reach
• Limited sources of traffic
• Limited media or space
Innovation often sparks from limited resources or limited environment
Affiliate marketing = entrepreneurs +
limited resources = consistent innovation
Photo credit: Shawn Collins
The Innovation Landscape
The Eras of Affiliate Marketing
Wild west era
Domestication era
Affilination era
US Affiliate Marketing spending 1994-2016
Ubiquity era$bn
The Wild West: Ruled by cowboys.
Innovation came from the adult industry
• Cybererotica: 1994
• Amazon.com: 1996
• Linkshare & Be Free: 1996
• Shawn Collins: 1997
• Commission Junction: 1998
Wild West Era (WWE)
• $250m revenues, 40% annual growth
• 500,000+ affiliates
• Choice of CPC, CPA and CPL programs
• 100s of creatives
• Geo-targeted banners
• Still only do checks to non US affiliates
Adult Friend Finder
Source: Business 2.0 Magazine, Adult Friend Finder
Domestication: Taming the beast & going
mainstream
• Explosive growth: ecommerce, new sectors
• Search traffic (PPC & organic) muzzled
• Rapid affiliate innovation
• Some innovations had to be kept on a leash
Domestication Era (DE) 2001-2008
• PPC affiliates
• Squeeze pages / email affiliates
• Cashback / Rewards
• Coupon codes
• Data feeds
DE Innovations: 2001-2008
• Affiliates penalized in organic listings
• Affiliates penalized in PPC listings
• Looked for alternative traffic sources
Now
• Coupon code sites rank unchallenged
• Rewards sites rely on viral traffic
• Email affiliates just need you to sign-up
Search traffic restrictions drove innovation
Innovations have displaced and compounded revenues
Affiliate Window’s affiliate revenue sources 2005-2010
• Controversial practices
– ‘Click to reveal’
– Expired coupon codes
– Exclusive codes
• Industry response through IAB Best Practice Guidelines
Innovation must not run unchecked
• Utilization of multiple revenue channels: search, content, email, coupon codes, cashback
• Reduction of reliance on just search traffic
• Methods of converting more closely scrutinized
Affiliate snapshot at end of DE
Ubiquity: Affiliates are everywhere
• Tipping point of major brands with programs
• Recognizable affiliate consumer brands
• Intersection with tech startups
• Innovation explosion
• Social media integration
Ubiquity Era (UE) 2008-2013
Major brands have affiliate programs
• Over 20,000 affiliate programs in 2010
Consumers use affiliate sites every day (and understand the model)
• Startups see appeal of affiliate marketing
• Low barriers to entry
• No need for ad-units
• Social activity can drive purchases
Affiliate marketing, meet my friend: tech startup
Innovations improving the purchasing funnel
Advertising
Merchants helping with distribution of data feeds through ad-units
• 300x250 (MPU) ad-unit easy to add to an affiliate site
• Pre-load particular products/categories
• Usually means showing an ad for a product that has been previously viewed or placed in cart
• Retargeted customers are 4x more likely to convert than new customers
• Affiliates can recognize abandoned shopping cart and offer a discount, coupon or bundle deal
Retargeting in affiliate marketing
Source: Mythings.com
Retargeting with reward model driven by CPA
Source: Mythings.com
Free for advertiser
Post-impression cookie
CPA on sale
• Ad is tracked by a post-impression/post-view cookie, placed after 2 seconds
• On conversion ,merchant pays CPA to re-targeter
• Potential clash as merchant may de-dupe across affiliate channel
• Networks have indicated click cookie would probably supersede impression cookie
PI Cookies carefully added to the marketing mix
Social Media
• Embed a Dominos widget easily
• Available for Facebook, Myspace & more
Social media embedding brings aff marketing to masses
• Simple interface
• Add ID via signup to Affiliate Window
Interfaces adapted for ‘micro-affiliates’
• Blippy shares your purchase-stream
• Automatically based on merchant or bank statement
• Swipe.ly provides similar service
Purchase sharing unearths products I care about
• Thingbuzz tracks ‘trending products’ across Twitter
Crowdsource what’s hot right now
Product Discovery
How do ‘real people’ search or discover products?
Mashup datafeeds with apps to create value
• Premier Inn affiliate site sits alongside official listing in PPC space
• Augments official offering with destination-based search – not possible on official site
• Merchant & affiliate worked together to identify area of weakness
• Plugged a hole in the marketing strategy
Merchants collaboration with affiliates to fast-track innovation
On-page monetization
• Product references linked to top performing merchant
• Geo-targeted link based on visitor
• Pop-up price product info or price comparison
Automatically link keywords to affiliate links
Associate products right at the image source
Affilination: The future of affiliate marketing
• Social media dominance
• Microaffiliates
• Micropayments
• Real-time data
• Multi-attribution
Affilination Era (AE) 2013-?
• Activity stream will be affiliated
• Foursquare linked to physical purchases, Facebook aggregates online purchases (through Blippy etc)
• Content sites will still benefit from generating purchase-intent
Social media a dominating influence
• Social web making inroads on search
• Social powered search could have inbuilt affiliate monetization – as algorithms get replaced by social graphs
Social media overtakes search
• Everyone can be an affiliate
• Challenge of low earnings threshold mitigated with virtual currency/credits on social networks
• Micropayments e.g. electronic cash solutions will make it more compelling and compatible with offline
Microaffiliates & Micropayments
• Micro-trends – hot product sales by hour or day
• ‘Prior-purchase’ click data – most popular products being viewed right now
• Purchasing clusters could drive further group activity – Groupon style
• Requires product-level tracking at affiliate networks (Amazon does it today)
• Instant reward notification
Real-time data will redefine ‘impulse buys’
Referral Marketing or Referratization
• Not the process of turning into a furry animal
Referral Marketing or Referratization
• The tracking and reward of every individual part of a referral; whereby referrals are driving the majority of online purchases
Contact
• @digijoe
Thanks to
• Kevin Edwards – Affiliate Window
• Matt Bailey – 7ThingsMedia
Any questions?
Poll: Q&A for Innovate! New Exciting Applic...