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Performance based marketing. 4 major pillars:

  1. merchant/retailer
  2. publisher/affiliate (3rd party)
  3. customer/end user
  4. network/offers for affiliates

16% of e-commerce comes from affiliate. It can be B2C and B2B.

CPA is revenue received by a publisher when he or she sends user to an advertiser who converts. Acquisition is conversion, it involves a transaction or purchase, advertisers pays only for converts. CPL is cost per lead. Revenue received when publisher generates a lead for an advertiser on their site. Usually involves user filling contact form.

Revenue share, not fixed amount per conversion. Advertising costs are defined by revenue.

Risks of affiliate marketing

  • CPAs can be dangerous. No guarantee, expensive, frauds. Better avoid in the beginning.
  • Conversions - sending traffic with no conversions, so, no revenue. This can be due to non-targeted traffic or fraud.
  • Aligned interests - don't compete with yourself. Merchant + affiliate = partnership. Same space = problems.
  • Cash flow and receiving revenue
  • Tracking performance

Merchant AND affiliate, not OR:

  1. phase 1 = being the affiliate
  2. phase 2 = being the merchant
  3. you can be both

Merchants must have

  • website
  • product or service
  • definition of conversions
  • commercials (numbers): how much to pay and to generate
  • platform (private or network)
  • tracking sales and numbers (software)

Software requirements

  • login
  • realtime reporting
  • platform to communicate
  • platform to upload offers and product feeds
  • be able to select affiliates
  • track metrics like CPA, CPC, CPM...

Recruiting and managing affiliates

  • web searching
  • attractive payment structures
  • know your affiliate motivations
  • communicate and be adaptive
  • treat with care

www.hasoffers.com
www.hitpath.com
www.postaffiliatepro.com (have demo)

Questions to ask

  • size of audience
  • who is the audience
  • how does the affiliate communicate with them
  • frequency of communication
  • past comparable performances
  • Alexa rank

Benefits

  • low risk
  • search affiliates
  • builds your authority and ranking
  • ready made networks and providers
  • 24/7/365 workforce

Shaw Academy

Daily count

count of orders in a day

Daily revenue count

revenue on orders per day

Product sum

total revenue of a product

Reorder rate

total number of orders to the number of people making orders

KPIs = Key Performance Indicators

Daily active users

unique users each day (DAU, WAU, MAU)

Daily average revenue per purchasing user

average amount of money spent by purchasers

Daily average revenue per user

average amount of money across all users

1 day retention

users returning next day

Daily revenue

sum of money made per day