Digital Cadet Presentation

Matt Bateman

MD Viva9

Affiliate Marketing – An Australian Perspective

• Affiliate Marketing explained • Performance Marketing Explained• The numbers

– Market Size – Growth Expectations– How it fits into the overall marketing mix

• Real World Examples and Case studies• Job types in performance marketing

Affiliate Marketing Explained

– Key Metrics and terminology used– A brief History of Affiliate in Australia, including a brief

market overview – How it fits into the wider performance mix – Banners, text links – effectiveness and metrics– eDM – how email is used in affiliate marketing to great

effect

Let’s start with a definition

• Affiliate Marketing is:

Revenue sharing between online advertisers/merchants and online publishers/salespeople, whereby

compensation is based on performance measures, typically in the form of sales, clicks, registrations, or a hybrid model.

Affiliate NetworkAffiliate Network

In the beginning...Amazon Affiliate Program

First things first – what the hell am I talking about?

• CPC – Cost Per Click • CPL – Cost Per Lead • CPA – Cost Per Acquisition • CPS – Cost Per Sale • CPR – Cost Per Response (or Cardio-Pulmonary

Resuscitation) • CPM – Cost Per Thousand

• It really is CPW

• In the Performance Marketing Space, Results count, and the actual tools are irrelevant

Affiliate Landscape in Australia

• Fastest-growing sector of online advertising in the Australian market

• By our estimates, the affiliate market will be worth approx A$40-50M in 2009

• The total performance-advertising part of the market is going to be worth $100-120M+ in 2009

• Estimates have the ‘performance’ part of the market growing at 20-30% year-on-year

Performance Marketing Tracking – how it works

Central DB

Consumers

Analytics Layer

Publishers

Multiple entry points

$ Leads Sales

Landing pages

Remarketing opportunity

Landing pages

Tracking pixel

Key PrinciplesKey Principles

- Pay only when the objective of the campaign has been achieved;

- Obtain centralised reporting, tracking and billing across all participating publishers without the need to pay for expensive third party tracking;

- Full approval of publishers/websites running the campaign. No Blind Buys.

Advertising that worked…then

Majority of advertising via text and banners as well as XML feeds

All sold on a Cost Per Sale basis

What does an affiliate publisher look like?

Publisher Perspective

• Concerns over cannibilisation • Are you really maximising your inventory in terms

of ad spend? • House ads should be almost non-existent now • Databases and Profiling – how to make the most

out of these • What’s next?

– Behavioural Targeting (Valueclick have just announced their first efforts in this space)

– Consolidation across verticals

A comment on E-Commerce in Australia

• Where are the major retailers online?

• How do we get them to engage online?

• The Avis model...

Affiliate marketing in Australia

CPA

RETAIL/CPS

CPC/CPL

SEARCH – SEO AND PPC

10

10

10

10

Quality

Volume

Performance Marketing

• Natural decentralization of Ad Spend online• Increasing number of Ad $s going to Search, Ad

Networks, and Performance/Affiliate • ‘Portal’ strategies now being replaced by:

– Ad Networks (AdConion, Drive PM, 3Di)– Ad Exchanges – Diversified Performance strategies

• Sophistication in ad-serving and tracking is enabling agencies and clients to work with multiple networks

Pricing Models – US IAB

  FH 2007 FH 2008

Performance Deals50%($4,997)

52%($6,007)

CPM45%($4,497)

44%($5,026)

Hybrid 5%($499) 4% ($477)

Performance Marketing Landscape in Australia

The power of email

How not to do it....

• Scott Richter – Mass Email Deployer

New revenue streams – Facebook Advertising as a traffic driver

• 200 apps In 1 weekend• 18 Apps for

platinum cards in one week

Twitter Feeds – Commission Monster and Viva9

• We are currently using twitter as a general feedback and information tool on Viva9

• Commission Monster is updating campaigns and campaign changes on the fly as we do new things

• Viva9australia • Promotional medium at this early

stage

CASE STUDIES

Australia Post /FDS – Database build

Objective - To build an annual survey panel of approximately 150,000 unique members. Campaign was broken into 2 x 3 month surveys.

Delivery Channel – Combination of targeted eDM, using quality opt- in databases, and banner placement, through selected affiliates within the Viva9 network.

Results – Both surveys were completed well ahead of schedule.

Strawberrynet – Sales Campaign

Objective – To drive sales of women’s cosmetics and men’s grooming products

Delivery Channel – Combination of targeted eDM, banner placement and search, through selected affiliates within the Viva9 network.

Affiliates were paid on a Commission basis based on sales.

Results – Achieved in excess of $1 million in sales on a monthly basis

Campaign ExamplesCampaign Examples

Case Study – Coca Cola

• CPL Program• Driving a DB for

coke• Focus on families

interested in holidays

ANZ Cards– Lead Generation

Open ended lead generation campaigns for the whole ANZ Credit Card range.Campaigns employ a combination of targeted eDM, using quality opt-in databases, and banner placement,through selected affiliates.

Campaign ExamplesCampaign Examples

Case Study – Finance – CBA affiliate program

Apply today for an everyday Low Rate credit card with Commonwealth Bank

•Market-leading brandMarket-leading brand•Regular promotions to publishers Regular promotions to publishers •Focus on comparison-based sites Focus on comparison-based sites

Job Types in Affiliate/Performance

• Account Management • Campaign Management/Trafficking • Affiliate Manager • Sales Support • Marketing • BDMs

WHAT’S NEXT?

Social Media and Performance Advertising

• At this stage, affiliates/publishers are driving acquisition in social media

• Facebook already has profiling and targeting capability

• My Space new tools announcement will be interesting • Social media looks more attractive, as search

becomes more expensive • Is information-gathering changing? • Twitter and Search combination could be a game-

changer

QUESTIONS?

Matt Bateman

MD – Viva9

Level 2, 62-64 Riley Street

East Sydney

Ph: (02) 9368 6850

Email: matt@viva9.com

Twitter: viva9australia;matthieub

Contact:Contact:

Resources

• www.affiliatetip.com • www.affiliates4u.com• www.emarketer.com

Mobile?• Mobile advertising is estimated to be a A$5m

market in 2009 • Even in the US, mobile affiliate is still very slow in

getting off the ground • Some interesting companies in the space:

– ADMob – Pudding Media – behavioural targetting and advertising

• Drew Ianni (chairman of Ad-Tech)

‘2009 is not the year for mobile advertising’