Evolution of Affiliate Marketing

January 12, 2011

SPEAKERS

Panelists

Eric Collins, COO, MobilePosse

Rob Duva, Co-Founder and CMO, RingRevenue.com

Mark Silliman, founder and CEO, Spadout.com

Moderator Carolyn Kmet

Director of Affiliate Marketing, Groupon.com

AGENDA

• Origin of the Affiliate Marketing Species• Consumer Evolution• Merchant Evolution• Affiliate Evolution• Call Performance Marketing• Mobile/Video Marketing• Consequences• Conclusion

Definition: Affiliate marketers are compensated for driving traffic and sales to retailers– From Avon to online, 1886 vs. 1990

– Straight text and banner ads

– Passive, billboard style advertising

ORIGINS

In 1994, HotWired launched one of the very first paid banner ads– Messner Vetere Berger McNamee Schmetterer

– Ask for forgiveness rather than permission

– “Oh wait, it’s clickable?”

ORIGINS

Source: http://www.wired.com/thisdayintech/2010/10/1027hotwired-banner-ads/

Consumers explore their new playground– Responsive to free and discounted offers

– Approving of smileys and animation

CONSUMER EVOLUTION

Sources: http://www.addemoticons.com/emoticons.html, http://thelongestlistofthelongeststuffatthelongestdomainnameatlonglast.com/banner42.html, http://web.archive.org/web/*/http://www.mypoints.com

Consumers lose interest in flashing marquees, marketers adapt

CONSUMER EVOLUTION

Consumers backfire: interference with browsing experience, privacy invasion

CONSUMER EVOLUTION

Sources: http://www.longtail.com/about.html

The key is delivering content that is relevant to the individual consumer– Groupon: dynamic landing page, daily deal widget

– Amazon: Omakase

– Best Buy remix

MERCHANT EVOLUTION

Affiliate marketing becomes device agnostic

“There is no spoon…”

AFFILIATE EVOLUTION

Rob Duva, RingRevenue.com

CALL PERFORMANCE MARKETING

CALL PERFORMANCE MARKETING

HELP! I have QUESTIONS! Why can’t I find a phone number?!

want human interaction before making big-ticket purchases.

want live assistance when making online purchases.

abandon their shopping carts due to lack of human interaction.

Source: Harris Interactive poll – August 2009

54%

77%

53%

Not including phone numbers on landing pages or lead forms is bad

for customers #FAIL

CALL PERFORMANCE MARKETING

“Consumers are increasingly using their mobile phones to engage with advertisers. But when it comes to making a purchase, they’re still hitting the call button” - Jason Cianchetti, Liquid Wireless

Mobile:

Affiliates not including phone numbers in mobile ads = #FAIL

CALL PERFORMANCE MARKETING

Local:

Affiliates don’t have access to local merchant offers #FAIL

CALL PERFORMANCE MARKETING

Offline Publishers:

RADIOTV PRINT Outdoor

Advertisers spend about 90% of their budgets offline

For the past 10 years, offline publishers haven't participated in

affiliate marketing #FAIL

CALL PERFORMANCE MARKETING

Track Calls Like Clicks

= 800-555-1234Affiliate marketers can now track calls like clicks. Including phone

numbers in ads = #WIN

CALL PERFORMANCE MARKETING

2010 Results

• Adopted by nearly all leading affiliate networks• Over 25,000 publishers signed up• Advertisers launched hundreds of campaigns• Millions in sales and commissions• Calls converting at 30-50%• Average order values 1.5 to 2x online• Improved CTR’s by 5-30%• Mobile users placing phone calls

Call performance marketing increases ROI across every marketing channel #WIN

CALL PERFORMANCE MARKETING

What does call performance marketing mean for

the continued evolution of affiliate marketing?

• More advertisers • More offers• More budget• More publishers

For Affiliate Networks, Advertisers, and Publishers,

More Calls = More Money #WIN

Eric Collins, Mobile Posse

MOBILE MARKETING

Case Study: Ford TaurusCase Study: Ford Taurus

• Ford Taurus– Branding/informational campaign

promoting the new 2010 Taurus

– Educates, informs users about the model on Banner, Offer Screen

– Lifts brand awareness

– Drives users to dealer locator

• Success Factors– Timely message

– Variety in messaging

– Click-to-WAP functionality

Results• 20% CTR from banner• Over course of campaign 50% of target audience interacted with creative• Delivered 270,000 consumers to Ford’s dealer locator site in the month of June

Additional Industry Coverage: eMarketer

MOBILE MARKETING

Case Study: Ford TaurusCase Study: Ford Taurus

• Industry Coverage

– “Across the board…we saw lifts in brand awareness, intent to visit the mobile site and purchase consideration… Specifically, we had a 20% click-through rate on it. So one in five people who saw the ad clicked through it.” -Alex Hultgren , Ford Digital Team 6/11/10 eMarketer

• Added Value Surveys

– In conjunction with SafeCount, Mobile Posse facilitated the pre, mid, and post-campaign audience surveys. Users “Clicked-to-Web” to complete and submit the surveys.

01/05/11 22- Confidential -

MOBILE MARKETING

01/05/11

• Jack in the Box (Restaurants)– Educates, informs users about special

offer on Banner, Offer Screen

– Prompts users to display and redeem coupon from Offer Detail and Coupon Code screens

• Success Factors– Significant in store coupon redemption

– Redemption likely under-reported by stores (training, new coupon medium, low dollar offers, minimal coupons per store)

Results Reported Redemption was almost 5% of consumers who clicked from banner

01/05/11 Confidential

Case Study: CouponingCase Study: Couponing

MOBILE MARKETING

Case Study: RetailCase Study: Retail

• Ace Hardware– Branding/informational campaign

promoting Memorial Day Sale event

– Educates, informs users about Ace Memorial Day Sale on Banner, Offer Screen

– Summarizes selected sale offer on seasonal item on Offer Screen

• Success Factors– Timely message (sales event)

– Variety in promoted items/messaging

– Special pricing encourages near-term purchase

Results• Post campaign user survey discovered a 30% lift in store visits among exposed users • Survey also discovered a 40% lift in store visits among users exposed to both Ace Hardware creative units

01/05/11 ConfidentialAdditional Industry Coverage: MobileMarketer.com

MOBILE MARKETING

Mark Silliman, Spadout.com

VIDEO MARKETING

Youtube's Solution … Wac-A-Mole Ads

Sooner or later you'll miss the X.•$0.001 earning per view | 0.005 click through rate

•(296,910 page views. 1,412 clicks. $541.20 revenue.)

VIDEO MARKETING

Spadout’s solution – Value adding ads.

Offer solutions.•$0.114 earning per view (114x) | 0.24 click through rate (48x)

•(142,010 page views. 34,239 clicks. $16,211.92 revenue.)

VIDEO MARKETING

Is mobile the new internet?– FTC policy

– Opt-in and privacy issues

– Viral deals

– Tax issues

CONSEQUENCES

CONCLUSION

Questions, comments,

kindly worded concerns?

CONCLUSION

Carolyn Kmet Eric Collins

Rob Duva