Affiliate Marketing in the Media Mix

Ewan DarbyBusiness Director, AffiliatesNeo@Ogilvy

A quick show of hands...

If you feel confident that you know the role of an agency in affiliate marketing

The role of an agency is...

Defined by our client’s requirements...

• Integrated strategy with other media• 3rd party tracking and performance analysis• Planning• Network management• Reporting• Affiliate recommendations

The merchant/agency/media relationship

Media briefed by agencyAd networks, SEO, SEM, Email,

Affiliates

Agency briefed by merchant

Planning and strategy to deliver objectives

Merchant

Sales and Marketing Objectives

According to the A4U web site this session is...

...a discussion on how Affiliate Marketing fits within the online marketing mix. To assist affiliates specifically in understanding why decisions are made by agencies and merchants and how they are seldom made in isolation. Why merchants may even question the value of some of the internal channels such as vouchers, paid search or cashback and where and why affiliates are called into question. An understanding of these issues will enable affiliates to tailor their strategy to meet client demands and attempt to future proof strategy

Offline

Online

Planning

Strategy

Building media strategy

Awareness

Consideration

Conversion

Purchase

Loyalty

Building awarenessCreating demandPositioning brand

Capture demandConverting consumers

Building media strategy

Awareness

Consideration

Conversion

Purchase

Loyalty

Offline mediaOnline display

Search

SearchAffiliates

CRM

Identifying and Targeting the Audience

One-time Customers

Product Purchasers

Propensity to

purchase

Merchant Customers

Retargeting

Search - Brand

Search - generic

Affiliates

Display media

Online Media Planning - considerations

ROI•Overall target•Channel target

Offline Activity•Media used•Time frames

Competitors•What are they doing?•How they’ve done it

Audience•Current customers•Target customers

Budget•Can everything be achieved?

Time period•Weeks, months, years?

A simplistic plan...

• Search and affiliates perform an “always on” task• Display provides tactical support around key

promotions• Re-targeting ensures maximum value is achieved

from display expenditure• Email can support tacticals as well as being an

efficient CRM vehicle

Re-targettingDisplayEmailSearchAffiliates

Month 1 2 3 4 5 6 7 8 9 10 11 12

A simplistic ROI...

Each channel within the plan needs to demonstrate value to the performance of the overall campaign (ROI)Display has a lower ROI than search and affiliates as their function is higher up the sales funnelTrying to understand value in isolation is difficult and may provide a skewed view of marketing performance

Re-targetting 7.9Display 4.4Email 5.3Search 4.5Affiliates 5.7Total 5.2

Affiliate marketing in the media mix

Agencies presenting affiliate marketing within the media planning mix means:1. The channel is a serious

consideration for marketeers

2. It receives the support that other media channels have enjoyed

3. Merchants understand the opportunity and the risk better than ever

Affiliate marketing in the media mix

But this means greater scrutiny

Adding to the mix – a marketeer’s concerns

• What does affiliate marketing add to the media

mix?

• Are all affiliates appropriate?

• How can I measure channel effectiveness?

• How can I measure affiliate effectiveness?

• What is the implication of de-duping?

An affiliate shaped space

De-duplicating sales

• De-duplicating sales means agencies and

merchants can effectively segment sales

• It ensures each channel reports last click sales

• There are caveats

1. It should not be used as a cost-saving measure

2. Savings made should be put back in to the CPA

3. It’s not right for every client

4. It’s not perfect

Search

Affiliate

Display

Non de-duped programmeTra

cking

Tag

TIME

Trackin

gTa

gTra

cking

Tag

SA

LE M

AD

E

A de-duped programmeFlo

od

light

Tag

SA

LE M

AD

E

TIME

Search

Affiliate

Display

De-duping

One sale

Affiliate

DisplaySearch

Considerations

• Which data source is “King”?• Who will it affect most?• What does the client want from it?• How can it be managed professionally and effectively?• What are the benefits for affiliates?

Filtering affiliate partners

Weighing up the opportunity

• How will a search affiliate affect our own paid search activity?

• Are voucher codes claiming the last click unfairly?• How do email affiliates derive their lists?–Can they be de-duped against a merchant’s?

• How would a loyalty affiliate impact a merchant’s own loyalty programme?

• If a merchant’s prices are not competitive is it damaging to the brand to appear on price comparison sites?

• Are meta-search and comparison affiliates populated by habitual brand-switchers?–Are they valuable customers, or will I lose them this

time next year?

Getting the right balance – affiliate selection

CoverageSales

VolumesChannel

effectiveness

ValueCost

Incremental

Channel erosion

Selling in to the agency and client

1. Have you spoken to the network?

2. Why do you want to promote the brand?

3. How will you promote the brand?

4. What’s in it for the merchant?

5. Are they doing something similar already?

Further questions and comments