Docstoc

A GUIDE TO AFFILIATE MARKETING

Document Sample
A GUIDE TO AFFILIATE MARKETING Powered By Docstoc
					          A GUIDE TO AFFILIATE MARKETING
                      Finance




A GUIDE TO
AFFILIATE
MARKETING
Finance
                                                                                     A GUIDE TO AFFILIATE MARKETING
                                                                                                             Finance




    INTRODUCTION TO AFFILIATE
    MARKETING FOR THE
    FINANCIAL SECTOR
    Commission Junction provides advanced affliate marketing               Company                                           Launch Date
    solutions that help marketers increase online leads and sales.         Marbles                                           Jul-01
    With key clients in the sector, such as Zurich and Capital             Morgan Stanley secured loans                      Dec-02
    One, along with 10 year’s experience in the financial affiliate        Capital One cards (Europe) Plc                    Dec-02
    marketing sector, we offer a wealth of knowledge. This                 Loans.co.uk                                       Feb-03
    document provides an insight into how financial advertisers            Lloyds Insurance                                  Aug-03
    can succesfully implement, manage and enhance an affiliate             Experian                                          Aug-04
    program with Commission Junction.                                      Zurich                                            Nov-04
                                                                           Capital One secured loans                         Nov-05
    With approximately 32 million online users in the UK (Source:          Staysure.co.uk Limited                            Aug-06
    Nielsen/Netratings global internet trends, Q1 2005) the leading        Travellers Protection Services                    Jan-06
    financial services companies have, on average, increased
    their online spend in the last 5 years significantly. In the period    Approximately 25% of all online spend for Commission Junction
    2002-2003 total online spend by the top 50 financial brands            financial clients is allocated towards affiliate marketing. Is
    was £6.5 million, and in the period 2005/2006 total online             this enough, given the return on investments that this channel
    spend by the top 50 brands was £37.5 million (figures taken            can deliver? Are you getting the best ROI from your overall
    from ADynamix/Marketmovements August 2006).                            marketing spend?

    Why the increase in spend?                                             GROWTH OF AFFILIATE
    “Consumers research financial products online because the
    web is quick and easy and lets them browse at home. Most
                                                                           MARKETING AND RETURN ON
    online researchers start at search engines and then use a              INvESTMENTS
    variety of other sites to research their financial decisions. They
    are looking for a mix of product details, comparisons, and help        Stepheny Lauer of US retail website www.art.com highlighted
    choosing the right product. As a result many people are visiting       a very interesting cost of acquisition which they conducted.
    independent websites to find the information that they need.           It compared various advertising media costs of acquiring
    These independent sites are chipping away at financial firm’s          customers versus the amount of revenue generated for every
    retail relationships, threatening to relegate financial firms to the   dollar spent. The results were dramatic:
    role of manufacturers that have to pay to secure distribution.”
    (Source: Forrester Research 31 May 2006, Where financial               Medium                    Cost of              Revenue Generated
    researchers go online)                                                                           Acquisition          per $1 spent
                                                                           Radio                     £766                 £0.04
    Consequently financial advertisers are closely reviewing               Print                     £504                 £0.05
    their overall online media plan from search engine marketing           Public Relations          £43                  £0.60
    through to banner advertising and, increasingly, affiliate             Email                     £13                  £1.33
    marketing.                                                             Online Ads                £11                  £2.42
                                                                           Affiliates                £5                   £3.76

    TOP COMMISSION JUNCTION                                                (Source: Cost of Acquisition Study, www.art.com August
    FINANCIAL SERvICES CLIENTS                                             2005, figures have been localised for UK market)

    Commission Junction has worked closely with some key                   Other merchants also validated these findings with their own
    financial services advertisers to develop successful and               statistics. Kathryn Wardell of US site www.eBags.com noted
    sustained relationships.                                               that 15% of their revenue is derived from their affiliate channel,
                                                                           and Reginald Bowser CEO of FanPowerSports reported that
                                                                           when he was the VP at LendingTree.com, there was a time

2
                                                                                                     Oxford House • 182 Upper Richmond Road
                                                                                                     London • SW15 2SH • UK
                                                                                                     t +44 (0)20 8785 5870 • f +44 (0)20 8785 5844
                                                                                                     www.cj.com/uk
                                                                                         A GUIDE TO AFFILIATE MARKETING
                                                                                                                Finance




    when the affiliate program contributed 60-70% of their revenue!           WHAT SHOULD FINANCIAL
    The affiliate channel is an effective, low-cost means of acquiring
    customers.
                                                                              SERvICES ADvERTISERS
                                                                              CONSIDER WHEN LAUNCHING
    The UK market for affiliate marketing will grow 60% in                    AN AFFILIATE MARKETING
    2006, breaking through the £2 billion mark to an estimated
                                                                              PROGRAM?
    value of £2.16 billion. (source: e-consultancy Affiliate
    Marketing Network Buyers Guide 2006)
                                                                              Focus on growth - Most companies in the finance sector are
                                                                              looking to grow their programs considerably. In times where
    As our sales team would advise you, partnering with an affiliate
                                                                              inventory is less available and main portals are saying that content
    network like Commission Junction provides you with the benefits
                                                                              is king, the ‘old big’ display deals are not available and those that
    of increasing revenue through a wider access to global and local
                                                                              are available are priced out of the market on the whole.
    markets. Justin Walthall, Affiliate Program Manager, at Lloyds
    TSB Insurance confirms that “the (Commission Junction) team is
                                                                              With most financial products closely guarded in terms of the
    extremely helpful in recruiting both local and international affiliates
                                                                              allowable CPA (cost per acquisition), the security that affiliate
    onto our program.”
                                                                              marketing provides is reassuring. Of course demand starts to
                                                                              push supply, and, as such, the allowable CPAs will not be picked
    Affiliate marketing networks can help advertisers …
                                                                              up if they are not competitive. Particularly saturated markets with
                                                                              some pressure on the CPAs are: credit cards, secured loans and
    • Drive revenue                                                           insurance products - both home and motor.
      • Access affiliates
         • Generate sales/actions                                             Commission Junction’s Advertiser Development team
         • Drive acquisitions                                                 has over 20 years of combined affiliate marketing experience.
         • Generate leads                                                     Our Head of Advertiser Development Matt Reid has over 10 years
                                                                              experience in brand and direct marketing, the last six of which
                                                                              have been spent in various product and marketing roles at HFC
    • Reduce costs                                                            Bank, latterly as marketing and E-commerce manager.
      • Reduce internal costs of managing affiliate programs in-house
      • Only pay for the sales/acquisitions you make                          Ultimately, unless an experienced manager is working on an
        • Increase transparency of return on investment (which means          affiliate program, some sales will be made but very little will be
          that marketing activity can be less hit-and-miss)                   learned. Affiliate marketing opens up huge opportunities to learn
                                                                              about online customers. Connecting this knowledge back to the
        • Reduce duplication of commission payments
                                                                              core business can give insight into other acquisition techniques,
          (through use of technology)
                                                                              and highlight how effective management of relationships with
                                                                              existing customers can boost performance. Justin Walthall, Affiliate
    • Improve branding                                                        Program Manager, Lloyds TSB Insurance:
      • Ensure quality of affiliates                                          “We are delighted with the significant contribution Commission
      • Raise perceptions of your brand through exposure on quality,          Junction has made to our affiliate program. Their ability to provide
        third-party websites                                                  a clear strategy for multiple products on one program has been
                                                                              invaluable”
      • Work with networks and agencies to minimise brand-squatting
                                                                              Lifetime value - Increasingly, although there is a renewed push
    • Inform marketing activities                                             on customer acquisition, there is additional pressure on the
      • Learn from affiliates about what is working in terms of pricing,      ‘Lifetime Value’ of customers acquired. It is clear that the most
         offers, products and propositions … and what is not working          sophisticated merchants are those who are looking at their long-
      • Improve search engine marketing                                       term strategies and the implications of changing consumer trends
                                                                              rather than taking an approach which is based entirely on short-
      • Boost conversion rates
                                                                              term sales uplift.




3
                                                                                                      Oxford House • 182 Upper Richmond Road
                                                                                                      London • SW15 2SH • UK
                                                                                                      t +44 (0)20 8785 5870 • f +44 (0)20 8785 5844
                                                                                                      www.cj.com/uk
                                                                                          A GUIDE TO AFFILIATE MARKETING
                                                                                                                  Finance




    An example of more enlightened thinking is exhibited by those              watching to see how such huge portals react to these changes
    merchants who are looking closely at their ability to retain, as well      as their business models mature. Certainly it is interesting to see
    as acquire, customers who are choosing their affiliates based on an        that the likes of Moneysupermarket.com now work with affiliate
    assessment of the quality of customers in terms of their potential         networks, like Commission Junction, to promote products.
    lifetime value.
                                                                               Beyond making substantial growth in affiliate marketing, finance
    This may translate into paying certain affiliates a higher rate of         companies monitor and are certainly more savvy to quality. With
    commission for delivering more valuable customers, rather than             credit losses increasing in recent years and the above points
    rewarding affiliates as generously if they are delivering customers        on ROI, affiliate networks have an increased requirement to
    with a greater propensity to switch.                                       ensure that financial services programs are not only meeting FSA
                                                                               requirements, but are also providing good-quality business and not
    Jonathan Forster, European Development Director of Commission              exposing brands to inappropriate promotions.
    Junction, said: “There is a lot of mileage for clients who want to
    integrate affiliate marketing and internet marketing deeper into           Creativity Required
    their businesses. This type of strategic approach may sometimes            Financial marketing is very much regulated by laws and
    mean a short-term revenue hit but it is very much in their longer-         regulations. April 2006 saw the closure of a number of credit
    term interests.”                                                           card affiliate programs across the sector. Commission Junction
                                                                               keeps abreast of the financial advertiser’s hurdles and finds
    This has manifested itself in a number of ways, particularly               strategic solutions to overcome them. Whilst best practice can be
    managing the publisher groups more closely. Here are some                  applied, a creative approach that works well for one retailer does
    comments made by Elliot Antrobus-Holder, Marketing Executive of            not necessarily work for another. Regular review and analysis
    HSBC Partnership Cards at the Commission Junction University UK            of campaigns is necessary to optimise a program and get the
    conference in July 2006:                                                   best performance. A good affiliate manager will think up new,
                                                                               innovative ways to constantly improve the performance of the
    “There’s a few key things really in terms of delivering ROI for the        creatives to meet the regulations.
    business. The first one that we found that’s fairly significant is
    communicating with the affiliates regularly, building a rapport with       WHAT ELSE DOES COMMISSION JUNCTION DO TO OFFER
    the key ones and helping them to understand our business model,            VALUE FOR THE FINANCIAL SERVICES SECTOR?
    and, in turn, ourselves understanding their business models. The
    next thing is drilling down to an individual affiliate level and looking   CJ Finance – In May 2006 Commission Junction conducted a piece
    at the traffic they’re driving through and the value of that traffic.      of marketing research amongst the top 20 leaders within the affiliate
    Obviously if you do find that one affiliate is driving particularly good   sector, encompassing both agencies and marketers with the aim
    traffic to your site, that it’s converting well, then you should reward    being to assess customer needs to ensure that we were aligning
    that affiliate accordingly, in which case you can then start looking       our services and positioning correctly. Commission Junction now
    at life term value. I think that’s one of the next big key things          has a focus on vertical sectors – travel, retail, gaming, agencies and
    that we need to start looking at as a business, actually drilling          finance. Becoming one of our financial clients within CJ Finance
    down to those key affiliates, looking at the value of the traffic that     gives you immediate access to the following:
    they provide on a lifetime basis and then paying those affiliates
    accordingly, which, I think, is really only fair.”                         • CJ Finance Portal – currently in development this password-
                                                                               protected area will give you access to Forrester, Jupiter, IAB
    Supporting this requirement is something that can be easily                research reports, links to online events, an archive of finance and
    seen if you look at initiatives like CJ Performer. CJ Performer is a       online-related news articles.
    premier affiliate marketing solution for top performing publishers
    that leverages Commission Junction’s expertise and resources to            • Roundtables – every quarter Commission Junction hosts
    facilitate new opportunities for revenue growth.                           advertiser and publisher roundtable events to discuss issues,
                                                                               opportunities, the changing landscape of the sector and publisher
    Comparison Sites                                                           business models.
    The stalwart of CPA models in finance has been comparison sites
    such as Moneysupermarket.com. It is interesting to note that these         • Vertical sector get-togethers – a finance session will be held
    have not seen substantial growth in the last few years, as more            by Commission Junction getting together key advertisers and
    content-rich inventory has played them down. It will be worth              publishers in the sector.

4
                                                                                                        Oxford House • 182 Upper Richmond Road
                                                                                                        London • SW15 2SH • UK
                                                                                                        t +44 (0)20 8785 5870 • f +44 (0)20 8785 5844
                                                                                                        www.cj.com/uk
                                                                                      A GUIDE TO AFFILIATE MARKETING
                                                                                                               Finance




    Promoting your Program                                                 Public Relations
    We understand that part of the success of a program is how             In the business to business environment nothing is quite as
    well, and how frequently, it is communicated to the publishers.        effective or carries as much credibility as PR. Our PR team will
    Consequently we have set up a number of channels to facilitate         work closely with you to come up with suitable news angles, case
    this promotion:                                                        studies and whitepapers.

    Email newsletters                                                      Commission Junction Partnership Marketing
                                                                           “The affiliate space is about combining technology and
    CJ Offer Portal:                                                       relationships to deliver results. Commission Junction is our
                                                                           preferred affiliate network as they understand the word
    The Commission Junction offer portal is a direct Real Simple           ‘relationships’ in and out. Since starting our relationship with
    Syndication (RSS) feed to publishers promoting network programs.       them in 2001 they have delivered a significant proportion of sales
                                                                           for our business by providing proactive and pleasant account
    CJ UK Mail:                                                            management, alignment to our business goals and even building
                                                                           partnerships with the extended marketing team.” - Jackie Tasker,
    A bi-weekly communication to the top 200 UK publishers. Includes       Head of Customer Acquisition, LX Direct.
    a general intro/update, a list of new advertisers and an advertiser
    update.                                                                The key word for our financial services advertisers is
                                                                           ‘relationships’. How can we leverage these both externally and
    CJ Wire UK:                                                            internally? Our marketing department has 10 years of media,
                                                                           creative, sponsorship & event management skills, enabling them to
    A bi-monthly publisher communication that features a strategy          sit down with you and come up with a bespoke solution specific to
    piece, new and featured advertisers. This goes to all                  the affiliate/new media arena. In the last two months Commission
    UK & Ireland publishers.                                               Junction and eBay have worked on a bespoke launch party and a
                                                                           roundtable event.
    CJ What’s Hot UK:
                                                                           Commission Junction University
    A monthly publisher communication that features advertiser             Every year Commission Junction holds a full day conference
    promotions and incentives. This goes to all UK & Ireland publishers.   for advertisers and publishers, allowing them to learn from key
                                                                           industry speakers and network. In 2006 the event attracted 160
    CJ Quarterly UK:                                                       delegates, visit http://uk.cj.com/news/cju2006_agenda_uk.html
                                                                           for more details. It is important for advertisers to meet publishers
    A quarterly advertiser communication that features a strategy piece,   so we are also requesting that they come forward as speakers or
    latest news and a featured publisher.                                  with suggestions on content.

    A4UForum Banner                                                        Summary
    Commission Junction has an exclusive banner on the A4UForum            This is just a basic insight into affiliate marketing for financial
    www.a4uforum.co.uk, a site that is regularly visited by                services advertisers. For more information please contact Tina
    approximately 9,000 affiliates across the UK regularly. Once signing   Wild, Business Development Manager, Commission Junction -
    up with Commission Junction we will immediately look to run a          Tel. 020 8785 5871 email. twild@cj.com
    program banner for you.

    New Media Age Strip Advertisment
    New Media Age is one of the UK’s leading online media
    print publications, which is distributed on a weekly basis to
    approximately 6,500 new media publishers, agencies and
    marketers. Commission Junction has a 100 x 33mm size print
    sponsorship advertisment on the letters page. This strip can be
    used to advertise your program complete with branding and a call
    to action.


5
                                                                                                     Oxford House • 182 Upper Richmond Road
                                                                                                     London • SW15 2SH • UK
                                                                                                     t +44 (0)20 8785 5870 • f +44 (0)20 8785 5844
                                                                                                     www.cj.com/uk