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1. Affiliate Marketing
Introduction and Overview

2. • What is Affiliate Marketing?
• Opportunities and challenges
• Affiliate Marketing – part of the online mix
• Affiliate marketing process
• Opportunities and challenges
• Financial planning
• Policies on affiliates
• Affiliate Program Sample Display Program
• Considerations
Contents

3. What is affiliatemarketing?
 Online program in which site
owners (publishers) display ads
and links to generate sales
directly into a clients site; on a
cost per performance basis
 Equivalent of having an online
sales force working on a
commission compensation
based model
 Build a network of financially
incentivised “brand advocates”
 Affiliate Marketing normally
involves three parties:
1. Merchant
2. Affiliate
3. Affiliate Network
Your
brand
Network

4. Opportunities and Challenges
Merchant
 Supply terms &
conditions, creative,
compensation structure
and growth of
relationships
Affiliates
 Sign-up to affiliate
network, promote
merchant on their sites
Affiliate Network
 Manage billing and
tracking of activity
through proprietary
platform
Role
 Maximize volume of
transactions
Compensation  Fixed payment per
transaction
 Commission on value of
transaction
 Over ride – based
on between 20% to
30% of affiliate
payments
 Total transactions
 Cost per transaction
Key success
metric
 eCPM – number of
impressions to generate
one transaction
 eCPC – number of clicks
to generate one
transaction
 Volume of
transactions and
affiliate payments
Growth Tactics  Increase compensation
and provide flexibility on
the terms of the program
 Increase traffic through
natural search & PPC
 Design sites that fulfil
consumer missions
 Increase number
of affiliates
through
aggressive
recruitment

5. AffiliateMarketing - part of onlinemix
Affiliate
Network
 Provide reach by aggregating hundreds of small sites (tier 2
and 3 sites) across different content categories
Reach
Fragmentation

6. Affiliate
www.bestflights.com
Merchant
Affiliate
Program
Merchant
Booking Confirmation
Page
Merchant
Site
Tracking of transactions
Commission Payment
Over-ride Network Payment
Affiliate
Network
Terms & Conditions
Creative Assets
Affiliate
Network
Console
Tracking codes
Payment system
AffiliateMarketing Process

7. Challenges
 Affiliate advertising provides
reach across tier 2 and 3 sites
and excludes tier 1 sites
 Attracting quality high traffic
sites to affiliate programme
 High worth product
 Low bounty payment
 Require on-going management
and optimisation
 Commission payment to
network owner – ranging from
20% to 30% of sale
 Mid to long term investment
Opportunities
 Performance based results
 Complete control of affiliate
recruitment and management
(quantity ad quality)
 Establish strong commercial
relationship with best
performing affiliates - “super
affiliates”
 Maximise reach and exposure
at minimal cost
 Free ad exposure – only
pay for results
Opportunities and Challenges

8. Affiliate payments (commission or fixed)
Network over ride payments
Internal resource
FinancialPlanning
+
Total investment
/
Total transactions
Gross bookings – cancellations & no shows = stays
Cost per transaction
-
Example of affiliate programme. Thomas Cook payment structure > through
Commission Junction affiliate network. Generates 18% to 20% of all
transactions.

9. Google policy on affiliates:
 Affiliates allowed to use AdWords advertising.
 Google will only display one ad for affiliates and merchant
sharing the same Display URL per search query.
 Google restricts the following:
– Redirect URLs: Ads that contain Display URLs that automatically
redirect to the merchant site.
– Bridge Pages: Ads for webpages that act as an intermediary,
whose sole purpose is to link or redirect traffic to the merchant
site.
– Framing: Ads for webpages that replicate the look and feel of a
merchant site.
Policies on AffiliateMarketing

10. Affiliate Program Sample
PPC Program
BTAffiliatePPC
listing
BTPPClisting

11. AffiliateProgram Sample
Display Program

12.  Affiliate marketing requires on-going nurturing and relationship
building > Affiliates have no loyalty to brands
 How to differentiate program from competitors? Combine financial
incentives with flexibility.
 Evaluate the metrics to pay affiliates on. Bookings or completed
stays?
 Decision should be lead by internal financial objectives and overall
market dynamics
 Affiliate marketing can become a self-funded program. Bookings
can be charged back to hotels (dependant on franchise/ownership
contracts)
 Affiliate Network programs cannot be switched “on and off”
 In 2004 Thomas Cook was force to close down their first affiliate
program for lack of funding – set budget run out
Considerations

13.  Affiliate Marketing delivers the 80/20 rule – 80% of all transactions will
be generated by 20% of affiliates
 How to differentiate program from competitors? Combine financial
incentives with flexibility.
 Have the network focus on quality of affiliates as opposed to quantity
 Establish strict terms and conditions with affiliate network and
affiliates related to:
 PPC bidding
 Usage of brand on PPC copy
 Bidding on brand and generic terms
 Use of URLs
 Length of cooling period between recording of transaction and payment
for transaction
 Assign a third party or internal resource to validate transactions
attributed to program – track all transactions through an order id
Considerations

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