1. Creating a Winning E-Business Second Edition
MIS/ENTR 375
Global E-Commerce
Creating a Winning E-Business Second Edition
Taking Advantage of
Affiliate Marketing
Chapter 7

2. 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
Describe affiliate tracking systems and affiliate management networks
Identify affiliate marketing risks and challenges

3. Online Affiliate Marketing 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

4. Online Affiliate Marketing Programs (continued)
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

5. Online Affiliate Marketing Programs (continued)
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

6. Online Affiliate Marketing Programs (continued)

7. Online Affiliate Marketing Programs (continued)
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

8. Online Affiliate Marketing Programs (continued)
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 merchant’s site from affiliate Web pages
Build traffic at affiliate site to increase click-throughs to merchant site

9. Online Affiliate Marketing Programs (continued)
Selecting an affiliate program
Make certain affiliate site visitors will be interested in merchant’s products/services
Learn about merchant
Type of products/services
Easy shopping experience
Customer support
Reputation in the marketplace
Look for competitive fees/commissions

10. Online Affiliate Marketing Programs (continued)
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

11. Online Affiliate Marketing Programs (continued)
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

12. 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

13. Affiliate Tracking Systems (continued)

14. Affiliate Tracking Systems (continued)
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

15. Affiliate Tracking Systems (continued)

16. Affiliate Tracking Systems (continued)
Well-established affiliate management networks
Commission Junction
LinkShare

17. Affiliate Tracking Systems (continued)
Affiliate tracking technologies
Custom links containing affiliate information or affiliate and merchant information
Tracking cookies
Third-party tracking software
Application service provider tracking service

18. Affiliate Tracking Systems (continued)

19. Affiliate Tracking Systems (continued)

20. Affiliate Marketing Risks and Challenges
Unethical affiliates
Cookie stuffing
Multiple cookies placed on visitor’s hard drive during a single visit to affiliate site
Parasiteware
Redirects affiliate links
Replaces content of existing tracking cookies

21. Affiliate Marketing Risks and Challenges (continued)
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