Ecom Access

In my previous post, Affiliate Marketing – Part 1: A Return on Marketing, I went over how:

• Online retail is getting a lot more competitive;
• Affiliate marketing is a relatively low risk (i.e. cost) way to maintain a competitive edge; and
• The medium is a much more legitimate online sales strategy than some perceive it to be.

In this post, I’ll elaborate on the second point and discuss how affiliate marketing is an online sales/marketing strategy that is based on results

Why Affiliate Marketing

The two most important part of any marketing campaign is that:

• There is a way to measure results (ROI); and
• It targets the right demographic.

Since affiliate marketing is a performance-based model, it does both rather well because:

• You only have to pay for ads when they actually convert into a sale; and
• It allows you to target the right audience when they’re in the right mood.

Pay Only for Performance

To recap: through affiliate marketing, merchants/advertisers deploy their ads through a network of affiliates. Affiliates in that network who are interested in promoting that product place those ads on their site.

If a user clicks on an ad, a cookie is used to track them over to the advertiser’s site. If the user ends up making a purchase, the affiliate gets a commission on that sale. If the user doesn’t purchase anything, there is no cost to the advertiser.

In this respect, affiliate marketing is like tapping into an army of freelance salesman that work only on commission. Even if shady affiliates are advertising your product, it’s not going to cost you to advertise on their site.

Better Targeting

Because affiliates only get paid when their ads convert, the affiliates that are going to promote your product are going to do so because they have targeted traffic. In other words, they are already running sites with content that’s relevant to your product line.

For example, if you’re a cloth diaper retailer with an affiliate program, I, as a content publisher, will only join your program if I have family-oriented traffic. If, on the other hand, I have adult or sports traffic, I don’t stand a chance at making a commission through your ads because none of my users are going to click on your ads.

Consequently, your ads are distributed according to user-demographic and mindset/mood. Users on affiliates’ sites are only there because they are actively interested in your type of product at that moment.  It’s like you’ve got hundreds or even thousands of tiny, highly-targeted boutique sites on the internet aligning your product offering with relevant content.

One of the things that has made affiliate marketing a popular and smart choice for product marketers recently is the rise of blogging.  A number of bloggers are looking for ways to earn money for their efforts.  By placing affiliate ads on their highly targeted niche content, they have a low-effort/potentially high-value way to earn commissions.

Choosing the Right Network

Of course, just as every retailer has its own business model and range of product offerings, so does every affiliate network. Although most any affiliate network will likely welcome you in, that doesn’t mean that they’re going to connect you with the right affiliates to promote your product.

There are a number of other considerations you need to make when shopping around for an affiliate network, I’ll be taking a look at what those considerations are in my next post.

According to Hitwise, the recession is driving ecommerce growth. As consumer budgets tighten, shoppers are turning online to shop, compare, and save.

With growth, however, comes increased competition, so it’s going to that much more important to step up your online marketing campaigns and target them better. One of the ways that an etailer can do both of these without breaking the marketing/advertising budget is through affiliate marketing.

Basically, affiliate marketing is an online advertising medium that doesn’t cost you until an ad converts into a sale. Through affiliate marketing, you deploy your ads through a network of affiliates. Affiliates in that network who are interested in promoting your product place those ads on their site. Then if a user clicks on an ad and subsequently makes a purchase, the affiliate gets a commission on that sale. If the user doesn’t purchase anything, there is no cost to the advertiser.

It’s like recruiting an army of freelance salesman who work on a commission-only basis. Consequently, it comes with relatively less risk than impression-based or cost-per-click advertising campaigns.

A Brief History of Affiliate Marketing
Now, even though the online medium is over a decade old (and the technology has been evolving for just as long), affiliate marketing has always been the red-headed stepchild of online marketing. But now that even Google has launched an affiliate network (GAN), there’s just no way to ignore affiliate marketing as a legitimate and credible online marketing channel.

Basically, when Google acquired DoubleClick, they also got the company’s affiliate ad network program called Performics. Only recently, however, has Google added the Performics affiliate network to its list of namesakes, giving both the network and the affiliate marketing medium as a whole an entirely new level of credibility.

You see, before GAN, the only major brand name affiliate network was Amazon Associates. None of Amazon’s brand name credibility trickled down to the rest of affiliate marketing, however, because Amazon was the only merchant advertising on the network.

Not only is GAN open to any merchant/advertiser, but Google has a name that’s synonymous with online advertising/marketing, performance, and analytics. Of course, even though GAN carries the Google name, it’s still the same Performics affiliate network which had many competitors.

In a word, GAN isn’t the only kid on the blog, and for good reason: just as different conventional ad networks are better suited for different brands and their product offerings, there are different affiliate networks for different business models.
When pursuing affiliate marketing as an online sales strategy, then, you have to consider:
• How the medium can increase your revenues and add value to your business;
• What your business model and resources; and
• What kind of support you’re going to need from an affiliate network to make your affiliate marketing program work.

I’ll be elaborating on these three points over the next few posts, so stay tuned to find out how you can drive sales to your ecommerce portal through an advertising medium with a much more performance based cost structure than cost-per-click or impression-based advertising.

As social media continues to become more mainstream, many businesses are still trying to figure out the best way to use these as marketing tools. Approaching a customer in an online community demands a different approach, which should be considered if you are thinking about venturing into social media.

Online communities are all about interaction and building relationships. In order to engage members of communities, it’s important to first become a trusted member of that community. There are essentially two ways that you can go about participating in existing communities: direct engagement and indirect engagement.

Direct engagement may sound straightforward, but where it can get tricky is in the practical application. This is a kind of longtail strategy, because it is so imperative to build trust within that community. The best practice is to have someone acting as a brand ambassador who is a trusted member of the community, and to ensure that your products or services have some relevance to the community’s interests.

With indirect engagement, you’ll be working with third-parties who can help to increase your brand’s awareness in the community without arising suspicion. If you can get together with members of specific communities who wield a certain amount of influence, then you may be able to offer them opportunities to announce “sneak peeks” into products or promotions.

It is essential to maintain good relationships with these third-parties. With this in mind, never ask them to exploit their status or deceive them into doing so. A bad relationship with a third party can serve to hamper your efforts, instead of help.

The rewards are palpable for those who make the effort to create interest in their brands in specific communities. Let’s take a look at some stats (source):

• Community users remain customers 50% longer than non-community users
(AT&T, 2002)
• Community users spend 54% more than non-community users (EBay, 2006)
• Community users visit nine times more often than non-community users
(McKinsey, 2000)

As with every aspect of every successful business enterprise, trust is a key aspect, and relationships are what help to build that trust. Consumers don’t purchase products until a trust has been established, and social media can be a great way to establish relationships as a means of establishing that trust.

Using social media to accomplish this might take some time, but is worthwhile for anyone attempting to build brand awareness in these exciting new markets.

As many businesses continue to struggle with an economic downturn, and with the gaming industry particularly under pressure, the recently released report by Ernst & Young, predicting a bright future for the online gambling industry, was certainly a breath of optimism.

With more operators entering the market space and the reopening of Google adwords, there are plenty of reasons to get excited about online gambling in 2009 and beyond.

The annual report by Ernst & Young that analyzed the gaming industry said the economic downturn was bringing challenges to the sector, but that innovation in online gambling was still bringing in money.

Our own findings at Income Access have been overwhelmingly positive as well. This year alone (January-October), we have secured 28 new clients, compared to 19 new clients last year. That translates to a 47% increase and we still have more to sign up!

US consulting firm, Christiansen Capital Advisors, published an analysis of online gambling’s global scope earlier this year, which also supports Ernst & Young’s findings. Their figures indicated that our industry accounts for about $22 billion a year in global revenue, with $25 billion a year expected by 2010.

That is bright!

And it’s not as if the iGaming industry has not been thrown its share of curve balls over the last couple of years. The Unlawful Internet Gambling Enforcement Act of 2006, combined with the recession has brought many challenges to our industry. To bounce back unscathed, indeed prospering, is something we can all be proud of. It’s something we should be proud of.

And certainly, companies have had to make changes, and now more than ever, play their marketing cards right. They are more budget conscious and carefully measure their ROI on campaigns to focus more strongly on what works, and stay away from what doesn’t.

And maybe it was time for that anyway. To be smarter marketers, that is. Perhaps, if nothing else, these curve balls, this economic struggle have taught us an important lesson: be savvy, demand more; drive your success to ensure that the future for online gaming remains, indeed, bright.

It’s been a while since I last contributed to my blog and so I thought I would do coffee on the go

Q: What is the most important consideration for affiliate marketing and the software that powers those programs?

A: The important thing to consider with affiliate marketing is that it’s really performance-based marketing. If it’s performance-based marketing, what a retailer/merchant or affiliate needs in terms of software is the ability to see accurate information. Accurate information can be measured in terms of which affiliates are promoting, or how a banner is converting. This can also be keeping track of what affiliates are doing.

Q: How can merchants keep track of affiliates?

A: Usually in a program, there is a percentage of affiliates that are consistently producing very good traffic, and there can be other affiliates that are producing a volume of traffic, that may not be as high quality. Looking at the metrics of a program is very important, and that includes being able to track a campaign from the clicks, to the conversions to the retention of the customers.

Q: Why is the ability to look at historical trends so important?

A: When a merchant has access to historical trends, they can analyze trends over a period of time, from season to season, or trends that occur from year to year—and this is crucial information. Also, merchants can see what affiliates have done in the past, and what they’re doing currently, which is also a powerful activation tool. This is not necessarily on a granular level, but definitely on a trend level.
At the end of the day the most important features of software that merchants should look for are transparency, accuracy and reliability.

In my experience, affiliates come from all walks of life and have all kinds of experience. In this episode of Coffee with Nicky, I discuss why I think it is that this industry attracts such a wide cross-section of individuals.

 Podcast Video: Download

Almost every affiliate has the potential to make a full-time career out of their online marketing activities. In this episode, I explore what’s involved in taking that step from being a part-time to being a full-time affiliate, including experience, the leap of faith, and their passion.

  Coffee with Nicky - Episode 8: Becoming a Full-Time Affiliate: Download

Although affiliates are often used primarily for acquistion, they also have a lot of potential for retaining customers. In this episode, I discuss how merchants can work with their affiliates for retention purposes and convert one-time buyers into repeat customers.

 Affiliates for Retention: Download

The software that powers a merchant’s affiliate program also reflects on their brand. The features and tracking offered through their chosen software tells affiliates how serious the merchant is about their affiliate program and the business relationships they build with affiliates. In this episode, I explore what those features are, and how merchants can better evaluate and choose an affiliate marketing platform.

iPhone Version

Affiliates rely on the software that powers a program to track and calculate their revenue. In that respect, the software powering the programs they promote is their life-blood. In this episode, I discuss exactly what affiliates should look for in the software that powers the programs they promote — from overall transparency to the specific reports they need to optimize their online marketing efforts.

iPhone Version