CCT356: Online Advertising and Marketing

1. CCT356: Online Advertising and Marketing Class 4: Affiliate Marketing

2. Admin • Online ad campaign critiques due two weeks from now – questions? • Annotated bibliography coming along well – post to page please

3. Affiliate Marketing • Well before social networking technologies, the power of leveraging contacts was understood and leveraged • WOM monetized – on completion of referral (actual purchase) referee would receive a small payment

4. The Internet is for porn • As with much onlinemarketing, the adultindustry was at the fore of early innovation • Other examples?

5. Early affiliate programs • Amazon Affiliate program – allows individual users to set up their own “mini-stores” on their sites/blogs • Multiple points of presence, all centrally serviced – drives content • Good for small/independent publishers – challenges for such groups?

6. Types of Reward • Cost per acquisition • Cost per lead • Revenue sharing • Cost per click • All possible, depends what you’re trying to do

7. CPA • As with online ad models, acquisition can be anything – but it is a positive action (e.g., downloading a paper, signing up to a mail list, buying a product)

8. CPL • Sometimes, potential leads are enough • Benefit to affiliates? • Benefit to merchants? • Example: HR recruiting

9. Revenue Sharing • Benefits both merchant and affiliate • Can be tiered to encourage and reward affiliates who drive revenue – e.g., Amazon tiered rates example

10. CPC • Simple clickthrough awarded • Used early when infrastructure was less sophisticated – used less used due to click fraud • Could still drive a lot of traffic and awareness, but if clicks are garbage, more traffic is a net loss • Still handy though – e.g., blog traffic networks

11. Tracking • Tracking URLs with specific start and end points • URLs carry information – affiliation network, ID of affiliate and merchant, other relevant information to a given campaign • Supported by cookies to track behavior for given period of time determined by merchant • Allows for tracking of success by merchant and affiliate alike

12. Issues • Case: affiliate clickthrough leads to exposure, but conversation happens after cookie timeout or through other means • Cookie reputation – blocked or deleted cookies = no tracking = no commission • Offline purchasing = no easy way to track • Mobile devices = different levels of cookie support

13. Affiliate Marketing Concerns • Good affiliate marketing = supplying merchant ads that are relevant to topic and focus of site • Bad affiliate marketing = accepting any old ad, creating a cacophony of advertising and no consistency • Issues of competition – as an affiliate, you probably don’t want to host ads to competitive sites • Issues of stickiness – if affiliate program makes viewer leave your site, not effective

14. Affiliate networks • Amazon, Google etc have the resources to run their own affairs • Smaller companies use affiliate networks – middlemen who collect potential merchants and affiliates and try to make good matches

15. Setup considerations • Clear identity of business identity, goals, market • Clear identification of affiliate campaign goals – leads, acquisitions, simple exposure? • Run your own program or join network? If latter, what are costs associated, benefits? • Prepare data for feeding to affiliates – and provide copy/banners for use (e.g., download Firefox banners – designed by Firefox for consistent look/feel, ease of use)

16. A note on MLM • Multi-level marketing – a form of affiliate networking, but a problematic one • How it works – levels and trickle-up effect of commissions • Why are they problematic?

17. Next week • Search Engine Optimization – Search Engine Marketing