WHY SECOND-GENERATION AFFILIATE PROGRAMS ARE PRODUCING BETTER RESULTS
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1 WHY SECOND-GENERATION AFFILIATE PROGRAMS ARE PRODUCING BETTER RESULTS ROBERT GLAZER Founder & Managing Director Acceleration Partners GREG HINTZ VP, Strategy & Corporate Development Shutterfly
2 ROBERT GLAZER Founder & Managing Director Acceleration Partners
3 WHERE AFFILIATE PROGRAMS HAVE BEEN 4
4 WHERE AFFILIATE PROGRAMS CAN BE
5 AFFILIATE PROGRAMS: THE BASICS MANAGEMENT METRICS & PAYOUT AFFILIATES NETWORKS TRANSPARENCY
6 MANAGEMENT GEN 1
7 POTENTIAL NETWORK CONFLICTS OF INTEREST
8 MANAGEMENT GEN 2
9 METRICS & PAYOUT GEN 1 MORE VOLUME = HIGHER $ PAYOUT 90% 5% 5%
10 METRICS & PAYOUT GEN 2 HIGHER QUALITY = HIGHER $ PAYOUT 60% 20% 20%
11 AFFILIATES GEN 1
12 AFFILIATES GEN 2
13 NETWORKS GEN 1
14 NETWORKS GEN 2 + = TARGET AFFILIATE NETWORK = MID & LONG TAIL
15 TRANSPARENCY GEN 1? 8 OUT OF 10 ARE NOT BRAND RELEVANT
16 TRANSPARENCY GEN 2 ALL 5 ARE BRAND RELEVANT
17 GEN 1 VS. GEN 2 SUMMARY NICE TO MEET YOU! WELCOME BACK! GEN 1 GEN 2
18 THE GEN 1 PROBLEM
19 A TYPICAL AFFILIATE PROGRAM... $100M ANNUAL ONLINE REVENUE $15M AFFILIATE PROGRAM (15%) $15,000,000 x 10% commission to affiliates $1.5M + 30% network fees $450,000 $1.95M 13% of revenue
20 ...IS ACTUALLY PRETTY UNHEALTHY $100M ANNUAL ONLINE REVENUE INCREMENTAL NON-INCREMENTAL $3.75M $11.25M $11.25M 75% is non-incremental ACTUALLY paying $1.95M for $3.75M in incremental revenue $1.95M 40% of revenue, not 13%!
21 REVENUE GENERATOR OR COST CENTER? = LITTLE INCREMENTAL AFFILIATE REVENUE BUT REAL AND SIGNIFICANT COSTS
22 HOW DOES DOUBLE COUNTING HAPPEN SEO $1M AFFILIATES $1M PPC $1M TOTAL COMPANY v REVENUE $2M /CRM $1M DISPLAY & RETARGETING $1M SOCIAL MEDIA $1M
23 CHANNEL OVERLAP / CRM PPC SOCIAL MEDIA DISPLAY & RETARGETING SEO AFFILIATES INCREMENTAL AFFILIATE SALES
24 INCREMENTAL DEMAND GENERATION COUPON COMPARISON SHOPPING DIRECT TO RETAILERS LOYALTY/CASH BACK COMMODIT Y PRODUCT
25 DEMAND INTERCEPTION SPYWARE/ADWARE SEO OR PPC TRADEMARK FORCED CLICKS INCORRECT OFFERS COOKIE STUFFING SEO OR PPC TRADEMARK DIFFERENTIATED PRODUCT
26 TRADEMARK SEO
27 COUPON SITES USING FORCED CLICKS CLICK TO REVEAL CODE NOT A REAL OFFER SIX MONTH EXPIRED OFFER
28 GEN 2: AFFILIATE MARKETING GROWS UP
29 VALUING THE ENTIRE FUNNEL INTRODUCERS ENGAGERS CLOSERS SALE $50 $25 $25 $100
30 VERIFY DISPARATE REPORTING MOVE FROM MANY REPORTS TO ONE REPORT
31 IDENTIFY VALUE-ADDED AFFILIATES Purchasing decisions New brand loyalty Traffic or mindshare 75%+ new customer referrals or incremental behavior (non-cart-based clicks) 2%-3% conversion rate Product level promotion
32 INTRA-CHANNEL ATTRIBUTION LEAP FROG LATE ENTRANCE BLOGGER COUPONS COUPON COUPONS COUPON $ $ 11/27 10:07 11/27 11:28 11/27 11:29 11/27 11:28 11/27 11:29 Paid Commission Affiliate Click Transaction Paid Commission Reduced Commission Affiliate Click Transaction
33 INTER-CHANNEL ATTRIBUTION
34 AFFILIATE PROGRAMS INTERNATIONAL
35 NO NETWORK IS BEST EVERYWHERE
36 NO AGENCY IS BEST EVERYWHERE
37 SOME INTERNATIONAL OFFICES ARE VERY SMALL SINGAPORE OFFICE
38 OTHERS CAN BE MISLEADING Can you do affiliate marketing?
39 GOING GLOBAL THE SMART WAY Multiple airlines working as one team CHICAGO GERMANY NEW ZEALAND Seamless check-in, baggage handling and transfers
40 GOING GLOBAL FRAMEWORK EXAMPLE 1 Merchant Point Agency US Agency US Network UK/EU Network Global SaaS Platform ROW Agency Tracking Tracking Tracking Tracking Tracking Account Management Account Management Account Management Account Management Account Management
41 TINY PRINTS: AFFILIATE PROGRAM
42 GREG HINTZ VP, Strategy & Corporate Development, Shutterfly Former General Manager, Tiny
43 TINY PRINTS: COMPANY OVERVIEW Tiny Prints is the leading premium online stationery boutique Founded in 2004, Tiny Prints was acquired by Shutterfly in main brand pillars that are synonymous with Tiny Prints: Leading designs Highest product quality Amazing customer experience 1.5M unique visitors in Dec 2015 per
44 TINY PRINTS: MARKETING STRATEGY We leverage omnichannel integrated marketing campaigns to drive growth Mainly online marketing, but our offline marketing spend is growing Every marketing channel plays a critical role: Brand awareness: print, public relations Retention: CRM, social, direct mail New customer acquisition: affiliate, partner, display, SEM, and SEO Affiliate channel is focused on new customer acquisition and incremental
45 TINY PRINTS: AFFILIATE ACHIEVEMENTS & INNOVATION One of the first programs in the industry to roll out attribution (2012) Portable cookie technology to ensure cross-device credit Tiny Prints named Affiliate Program of the Year at 2012 Pinnacle Awards (beating out Amazon and Overstock.com) Storefronts photographers, schools, and nonprofits Coupon locking
46 RECENT INNOVATIONS: COUPON LOCKING PREVENTS COMMISSION ON UNDESIRABLE CLICKS OR CODES EXCLUSIVE CODES Exclusive codes given to an affiliate are only commissionable to that affiliate. LEAKED CODES Leaked or non-approved codes are automatically not commissioned for coupon partners. NO CODE USED Coupon partners are not commissioned when an invalid code or no code is used, reducing the effectiveness of forced
47 WHAT ARE WE DOING DIFFERENTLY 6 person team (two internal, four agency) each with distinct responsibilities No toolbar affiliates and restricted participation from coupon sites Frequent, quality communications with affiliates about promotions and other relevant news. We communicate weekly 1-1 with top partners Using attribution and technology to reward desired behaviors Fresh content and new creative weekly, and for each major holiday = 40% average growth for over 5
48 AGGRESSIVE RECRUITING AND ACTIVATION Utilize all tools at our disposal to attract and activate affiliates: Constant focus on recruitment including nontraditional affiliates Conferences traditional and nontraditional Competitor recruiting Network advertising and invitations Frequent, targeted activation campaigns, including use of attractive prizes Continue to grow the program by focusing on nontraditional
49 AGGRESSIVE RECRUITING AND ACTIVATION 2014 AFFILIATE ACTIVITY 59% 26% CLICK ACTIVE SALE
50 ...WHILE REMAINING SELECTIVE IN ACCEPTANCE To protect our premium brand, we maintain a tight program that allows the most relevant and active partners to thrive: Decline nearly 50% of applications Ongoing policing of affiliates whose metrics are not in line with the norm Monitoring of affiliate marketing practices for violations of terms and/ or trademark bidding Ask questions when don t understand the affiliates business
51 TINY PRINTS: AFFILIATE SEGMENTS COUPON/DEAL Primary focus are coupons and deals for their audience (RetailMeNot and Coupons.com) LOYALTY/REWARD Collect an audience base by offering a unique reward or loyalty incentive (ebates) CONTENT Focus on quality content (mommy blogs) SUB-NETWORK/TOOL Network of sub-affiliates (RewardStyle and Skimlinks) STOREFRONTS Schools and photographers promote to their individual
52 AFFILIATE SEGMENTS: DEAL
53 AFFILIATE SEGMENTS: CONTENT
54 AFFILIATE SEGMENTS: SUB-NETWORK/TOOL
55 RECENT INNOVATIONS: PHOTOGRAPHER
56 RECENT INNOVATIONS: SCHOOL
57 RECENT INNOVATIONS: INTEGRATED
58 THANK YOU & QUESTIONS ROBERT GLAZER FOUNDER AND MANAGING DIRECTOR rglazertners.com GREG HINTZ VP, STRATEGY & CORPORATE DEV. VISIT BOOTH
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