Top 5 Affiliate Marketing Opportunities for 2006

Top 5 Affiliate Marketing Opportunities for 2006 Affiliate Summit 2006 January 9, 2006 Anne Holland, Publisher, MarketingSherpa © 2000-2006 Marketi...
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Top 5 Affiliate Marketing Opportunities for 2006

Affiliate Summit 2006 January 9, 2006

Anne Holland, Publisher, MarketingSherpa

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

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The Hidden Success !

$6.5 billion in 2005 (low estimate)

!

Smartest, most entrepreneurial marketers on the planet

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

2

Facts not Opinion: MarketingSherpa Methodology !

Data for our reports, case studies and newsletters is gathered from: " " " " "

776 affiliate marketers & merchants surveyed 5,000+ email & search marketers surveyed Eyetracking lab tests Research partnerships w/ dozens of vendors 500+ exclusive Case Studies

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

3

Affiliates & Search: Dramatic Shift

Affiliates and Search

Views on how affiliates use TMs are changing fast.

We don't allow our affiliates to use our TMs/branded terms in the search engine marketing.

21%

39%

January '05 August '05

We essentially outsource our search engine marketing to our affiliates, and we give them free reign with TMs and branded terms.

0%

50%

29%

10%

20%

30%

40%

50%

60%

Source: MarketingSherpa Affiliate and Merchant Survey, August 2005

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

4

Affiliates & Search Opportunity #1: News Releases

Press releases are for customers, not journalists.

Source: Shawn Collins Consulting, December 2004

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

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Search News Opportunities by Niche Optimized Release Activity by Industry

2.18% 3.17% 2.44%

Publishing

2.67% 3.72% 4.02%

Oil/Energy

Sports 0.99%

5.54% 3.82%

% of click throughs

4.22% 4.01% 2.97%

Food/Bev

% of page views

5.01% 4.60% 3.03%

Retail

% of releases optimized

5.27% 5.88%

Banking/Finance

Auto

12.92%

7.54% 6.10% 3.70% 7.10% 7.24%

Health

11.66%

10.31% 9.45%

Computer/Electronics

18.22% 21.05%

Entertainment

6.84% 0%

5%

10%

23.73% 15%

20%

25%

Source: PR Newswire Data, August, 2005 © 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

6

Affiliates & Search Dramatic change in PPC bidding

Keyword Volume - 2004/2005

E-LOAN says bid management no longer makes competitive difference

12 Month Growth Rate: 90% 6 Month Growth Rate: 36%

20,000

17,314 14,700

15,000

10,000

9,100

5,000

Keywords for September, 2004

Keywords for March, 2005

Keywords for September, 2005

Source: MarketingSherpa, Search Marketing Benchmark Survey, August 2005 and MarketingSherpa, Search Marketing Metrics Survey, June 2004

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

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Affiliates & Search Opportunity #2: Landing Pages

14.00% 11.81%

12.00% 9.28%

10.00% 8.00%

6.31%

6.00% 4.00% 2.00%

0.79%

0.00% Doesn't Match Keyword

Home Page of Matches Theme Specific Match Site of Keyword to Keyword

Source: Atlas DMT, Search Listing URL and Conversion, 04/2004

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

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Example: 30-50% conversion lift

Source: Atlas DMT, Search Listing URL and Conversion, 04/2004 © 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

9

Many landing pages still lame

Where Clicks Land - All Marketers 50% 45% 45%

41%

40% 35%

32%

32%

30%

27% 24%

25% 20% 15% 10% 5% 0% Special landing pages or microsite

Deep links within existing site

2004

Site home page

2005

Source: MarketingSherpa, Search Marketing Benchmark Survey, August 2005 and MarketingSherpa, Search Marketing Metrics Survey, June 2004 © 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

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Example: Tall Women’s Clothing

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

11

Example: Tall Women’s Clothing landing page

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

12

Which search terms are worth extra work on landing pages? Keyword Research ROI – 5+ Years Exp.

8% Segmenting website log files looking for highly converting keywords

30%

60% Low ROI

Medium ROI

24%

Great ROI

Tools from the Search Engines

59%

17%

0%

10%

20%

30%

40%

50%

60%

70%

Source: MarketingSherpa, Search Marketing Benchmark Survey, August 2005

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

13

Affiliates & Email Marketing !

Three Top Opportunities

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

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#1. Most actionable data: Opt-in recency affects response

Open rate

Clickthrough

70% 60%

58%

50%

45% 37%

40%

37%

35%

33%

30% 30%

24%

20%

19%

20%

61-90 days

4 - 6 months

19%

18%

10% 0% 0-30 days

31-60 days

6 months - 1 year

1 - 2 years

Age of User Record

Source: InformZ for MarketingSherpa, October 2005

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

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Example: New opt-in campaign

Consider an educational 57x email series before sending clicks to merchants

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

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#2. Unexpected success data: Co-registration opt-ins

40% 35%

32% 30%

30% 24%

25% 20%

14%

15% 10% 5% 0% Our co-reg names perform Our co-reg names don't about as well as leads peform as well as our from our own website. website leads, but they're worth it.

Our co-reg names aren't We don't separate out the performing well. performance of co-reg names.

Source: MarketingSherpa, Email Marketing Benchmark Survey, October 2005

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

17

Example: co-registration

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

18

Vendor recommendation !

Co-regComplete.com

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

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#3. Eye-opening data: Segmentation worth the effort Promotional Campaigns

Audience Size

Segmented

Opens

Not Segmented

Clicks

Opens

Clicks

< 5K

50.50%

11.70%

5.60%

0.60%

5K–10K

48.80%

9.00%

3.90%

0.30%

10K–50K

28.50%

7.60%

4.00%

0.50%

50K–100K

13.40%

4.00%

3.70%

0.80%

> 100K

13.10%

1.10%

3.50%

0.20%

Averages

30.86%

6.68%

4.14%

0.48%

Source: Topica for MarketingSherpa, October 2005

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

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Example: Multi-article vs single article ezine

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

21

Networking Guide for Affiliate Summit 2006 !

Who should you schmooze and how can you tell if they’ll be any good as partners?

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

22

Merchants’ Affiliate Growth Plans % of Affiliate Program Managers

We plan to slowly grow our affiliate stable, focusing on the quality of each affiliate we add.

44%

We plan to aggressively grow our total number of affiliates.

43%

We plan to keep our overall number of affiliates stable, but to replace inactive/poor quality affiliates with better ones.

7%

We plan to decrease our total number of affiliates and focus on our most profitable and accountable affiliates.

7%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Source: MarketingSherpa Affiliate and Merchant Survey, August 2005

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

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Picking the Best Affiliates: Merchant’s Revenue from Affiliates

% of Merchants' Affiliate Program Managers Fewer than 5% of our affiliates account for more than 75% of revenue

51%

Fewer than 10% of our affiliates account for more than 75% of revenue

23%

Fewer than 15% of our affiliates account for more than 75% of revenue

7%

Fewer than 25% of our affiliates account for more than 75% of revenue

6%

Fewer than 20% of our affiliates account for more than 75% of revenue

4%

0%

10%

20%

30%

40%

50%

60%

Source: MarketingSherpa Affiliate and Merchant Survey, August 2005

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

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What’s wrong with most affiliates? Quality and Conduct Problems

Affiliates with content that reflects poorly on your brand.

7%

25%

Fraud related to affiliate activities (fake leads, CCard fraud, click fraud, etc

10%

Affiliates with questionable email marketing practices.

10%

Affiliates with questionable search marketing practices.

19%

10%

32%

20%

20%

Very Common

32%

45%

50%

32%

0%

25%

39%

13%

14%

Affiliates with irrelevant content that produces low-quality leads.

43%

16%

37%

30%

40%

Somewhat Common

50%

19%

60%

70%

Happens, but Uncommon

80%

12%

90%

100%

Very Uncommon

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

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Two Main Types of Affiliates: (vast oversimplification)

!

Branded

!

Non-Branded

"

Niche/targeted

"

Mass distribution

"

Audience/topic passion

"

Cash is king

"

Custom creative does better

"

Generic creative ok – but optimize it

"

Enthusiast pubs

"

Late night cable ads

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

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Create more *true* partnerships !

Marketing w/non-branded affiliates Electronic Retailers Assn Multivariate & eyetracking testing

!

Marketing w/ branded affiliates More custom content Click-didn’t-buy campaigns Shared Web analytics

!

Affiliates partnering w/ each other Exit pops/DHTML Co-registration

© 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

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Together, let’s make 2006 a $10 billion year!

MarketingSherpa, Inc. 499 Main Street Warren, RI 02885 (877) 895-1717 Outside the U.S.(401) 247-7655

FREE Offer: Deadline Jan 15th Get ‘MarketingSherpa’s Top 10 Email Newsletter Mistakes’ $20.00 report free with any purchase www.SherpaStore.com www.SherpaStore.com (877) 895-1717

http://www.MarketingSherpa.com © 2000-2006 MarketingSherpa, Inc. You may distribute this presentation providing it is not altered in any way. Thank you.

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