Creating a Winning E-Business Second Edition

1
Creating a Winning E-BusinessSecond Edition

• Taking Advantage of
• Affiliate Marketing
• Chapter 7

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Learning Objectives

• Define affiliate marketing
• Explain how affiliate programs function as a
  marketing tool
• Discuss how affiliate programs can serve as a
  revenue source
• List the elements of an affiliate agreement

3
Learning Objectives (continued)

• Describe affiliate tracking systems and affiliate
  management networks
• Identify affiliate marketing risks and challenges

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Online AffiliateMarketing Programs

• A revenue-sharing approach to marketing and
  promoting an e-business
• Also called associate programs or
  pay-for-performance programs
• Merchant or advertiser operates the program
• Affiliate or publisher participates in the
  program
• Marketing tool for merchant
• Revenue source for affiliate
• Require custom links from affiliate site to
  merchant site

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Online Affiliate Marketing Programs

• Pay-per-click (cost-per-click) program
• Merchant pays affiliate a set fee for each
  click-through from affiliate site
• No action at merchant site is required
• Pay-per-lead (cost-per-lead) program
• Merchant pays affiliate a set fee for each
  click-through that results in action
• Make a purchase
• Complete a form or take a survey

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Online Affiliate Marketing Programs

• Pay-per-sale (cost-per-sale) program
• Merchant pays affiliate a fee or commission on a
  sale that results from a click-through
• Thousands of diverse e-businesses operate
  affiliate programs
• Amazon.com
• Dell
• 1-800-FLOWERS.COM
• Rackspace Managed Hosting

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Online Affiliate Marketing Programs
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Online Affiliate Marketing Programs
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Online Affiliate Marketing Programs
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Online Affiliate Marketing Programs
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Online Affiliate Marketing Programs
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Online Affiliate Marketing Programs

• Advantages to merchant
• Tie marketing effort directly to sales
• Pay only for results
• Advantages to affiliate
• Additional source of revenue for affiliate who
  also sells products/services
• Primary source of revenue for affiliate who
  offers entertainment or information

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Online Affiliate Marketing Programs

• Participating in an affiliate program
• Select the program carefully to ensure a good
  fit
• Understand the terms of the affiliate agreement
• Add custom links to merchants site from
  affiliate Web pages
• Build traffic at affiliate site to increase
  click-throughs to merchant site

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Online Affiliate Marketing Programs

• Selecting an affiliate program
• Make certain affiliate site visitors will be
  interested in merchants products/services
• Learn about merchant
• Type of products/services
• Easy shopping experience
• Customer support
• Reputation in the marketplace
• Look for competitive fees/commissions

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Online Affiliate Marketing Programs

• Affiliate agreement defines program terms
• Types of Web sites merchant approves
• Guidelines for linking
• Schedule of fees and commissions
• Terms of usage of merchant logo and name

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Online Affiliate Marketing Programs

• Affiliate agreement defines program terms
  (continued)
• Restrictions on type of content at affiliate site
• Restrictions on marketing tools an affiliate can
  use
• Liability and other legal disclaimers
• Dispute resolution and termination requirements

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Affiliate Tracking Systems

• Allow merchant to control how it credits
  click-throughs
• Monitor window of time in which affiliate can get
  credit for a click-through
• Record and store affiliate information
• Provide commission/fee reports

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Affiliate Tracking Systems
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Affiliate Tracking Systems

• Affiliate management networks
• Third-party entities
• Recruit affiliates
• Manage affiliate registration process
• Track click-throughs
• Credit affiliates with click-throughs
• Arrange for commission/fee reporting and payment

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Affiliate Tracking Systems
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Affiliate Tracking Systems

• Well-established affiliate management networks
• Commission Junction
• LinkShare

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Affiliate Tracking Systems
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Affiliate Tracking Systems
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Affiliate Tracking Systems

• Affiliate tracking technologies
• Custom links containing affiliate information or
  affiliate and merchant information
• Tracking cookies
• Third-party tracking software
• Application service provider tracking service

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Affiliate Tracking Systems
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Affiliate Tracking Systems
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Affiliate Marketing Risksand Challenges

• Unethical affiliates
• Cookie stuffing
• Multiple cookies placed on visitors hard drive
  during a single visit to affiliate site
• Parasiteware
• Redirects affiliate links
• Replaces content of existing tracking cookies

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Affiliate Marketing Risksand Challenges

• Unethical affiliates (continued)
• Spammers
• Merchant is responsible if affiliates use spam to
  promote sites
• Negative perception of tracking cookies
• Many consumers install and use blocking software
• Block tracking cookies
• Delete tracking cookies

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Chapter Summary

• Affiliate marketing is a revenue-sharing approach
  to promoting an e-businesss products and
  services
• Marketing tool for merchant
• Source of revenue for affiliate
• Affiliate programs
• Pay-per-click (cost-per-click)
• Pay-per-lead (cost-per-lead)
• Pay-per-sale (cost-per-sale)

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Chapter Summary(continued)

• Affiliate program should
• Fit with affiliates products and services
• Fit with Web site content
• Affiliate agreement defines the terms of an
  affiliate program
• Coded URLs and tracking cookies are used to track
  click-throughs

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Chapter Summary(continued)

• Affiliate management network
• Recruits affiliates
• Manages registration process
• Tracks click-throughs
• Credits referral fees and commissions to
  affiliate
• Risks and challenges
• Unethical affiliates (cookie stuffing,
  parasiteware)
• Negative perception of tracking cookies