Topics in Technology and Marketing Drive Marketing: Affiliate Marketing

What is affiliate marketing? CPA – cost per action Commission-only sales force for an Internet business – 100% variable cost – No overheads A global “pay-for-performance” sales team Some of the best Internet marketers are affiliates

How it works Step 1: A company (Acme) registers with a Commission Aggregator (CA) – e.g. Commission Junction, ClickBank, etc. – Provides product details, commission rate, etc. Step 2: An affiliate marketer registers with CA – Browses affiliate programs registered with CA – Signs up for Acme's affiliate program Step 3: CA issues an affiliate link containing tracking code –

How it works (continued) Step 4: Affiliate markets Acme's product or service through – Micro-sites – Social media – PPC/SEM – All calls-to-action (CTAs) contain CA's affiliate link Step 5: Buyer clicks on affiliate's CTA link – Routed through CA to Acme's shopping cart company=acme – Sale credited to affiliate promocode=aff001

How it works (continued) Step 6: Reconciliation – CA pays affiliate $12 for each sale – CA charges Acme $12 +15% ($13.80) for each sale – CA profit = $1.80 per sale

What it means For internet marketing companies Pros – Incur expenses only on final sales – Easy to administer – Potentially massive exposure Cons – Wild West – no real control over what affiliates say and do – No loyalty – affiliates will immediately abandon program if sales do not close

What it means For individuals Pros – Viable career/business option – Significant upside for......talented marketers......promoting desirable products......on a website that is conversion-optimized – Passive income potential Cons – No income unless a sale is made What happens if product is returned? – Stiff competition for lucrative opportunities

A great place to learn The Challenge (Ed Dale) – –

Questions?