1. Affiliate marketing opportunities in
Baltic states
Pjotr Tsvetkov
altex marketing

2. About me
• Have been affiliate from 2004
• I been focused on US market mostly
• Have been dealing with Internet marketing
as professional last 6 years
• I’m head of affiliate network pay4results.eu

3. I will tell you
• What is affiliate marketing?
• How affiliate marketing works
• Some facts about affiliate marketing
• How big is affiliate marketing
• Return on Investment
• Strengths, Weaknesses, Opportunities & Threats (SWOT)
• Where to start if a company wishes to open affiliate
program?

4. What is affiliate marketing ?

5. What is affiliate marketing ?
Affiliate marketing is
SOPS

6. What is affiliate marketing ?
Affiliate marketing is
Selling
Other
People’s
Stuff

7. How Affiliate Marketing works
Some
company
Submit

8. How Affiliate Marketing works
Some Affiliate
company Website
Submit

9. How Affiliate Marketing works
Some Affiliate
company Website
banner
Submit

10. How Affiliate Marketing works
Some Affiliate
company Website
Visitors
banner
Submit

11. How Affiliate Marketing works
Some Affiliate
company Website
Visitors
banner
Submit
€€€

12. FACTS ABOUT AFFILIATE
MARKETING

13. Facts about Affiliate Marketing:
• Reward affiliates when sales are made

14. Facts about Affiliate Marketing:
• Reward affiliates when sales are made
• Display your banner

15. Facts about Affiliate Marketing:
• Reward affiliates when sales are made
• Display your banner
• Outsourced marketing team

16. Facts about Affiliate Marketing:
• Reward affiliates when sales are made
• Display your banner
• Outsourced marketing team
• Easy access to technology and affiliates using networks

17. Facts about Affiliate Marketing:
• Reward affiliates when sales are made
• Display your banner
• Outsourced marketing team
• Easy access to technology and affiliates using networks
• Affiliate marketing is technique

18. Facts about Affiliate Marketing:
• Reward affiliates when sales are made
• Display your banner
• Outsourced marketing team
• Easy access to technology and affiliates using networks
• Affiliate marketing is technique
• The majority of merchants involved

19. Facts about Affiliate Marketing:
• Reward affiliates when sales are made
• Display your banner
• Outsourced marketing team
• Easy access to technology and affiliates using networks
• Affiliate marketing is technique
• The majority of merchants involved
• Affiliate market is growing

20. Facts about Affiliate Marketing:
• Reward affiliates when sales are made
• Display your banner
• Outsourced marketing team
• Easy access to technology and affiliates using networks
• Affiliate marketing is technique
• The majority of merchants involved
• Affiliate market is growing
• Not slowing down

21. Facts about Affiliate Marketing:
• Reward affiliates when sales are made
• Display your banner
• Outsourced marketing team
• Easy access to technology and affiliates using networks
• Affiliate marketing is technique
• The majority of merchants involved
• Affiliate market is growing
• Not slowing down
• The three sectors expected to experience the greatest
growth – Travel, finance and mobile phones

22. HOW BIG IS AFFILIATE
MARKETING?

23. 2004-2010 Growth of UK Affiliate Marketing
Value of UK affiliate industry, based on value of sales
driven by sector(£)
5 4,62
4,5 4,13
4 3,82
3,5 3,13
3
Billions
2,5 2,216
2
1,5 1,35
1 0,6
0,5
0
2004 2005 2006 2007 2008 2009 2010
Econsultancy 2010

24. Market Value and Growth
• Affiliate marketing is driving 8% of all online retail sales in
the UK
• For many “blue chip” merchants, particularly in retail and
travel, this figure is much higher
• 36% of responding companies were planning to increase
their affiliate marketing budgets

25. Is your company planning to spend more or less
budget in 2010?
Descrease Keep the same Increase
100%
90% 21 25
80% 46
70%
67
60%
50% 65
40% 64
30% 50
20% 29
10% 15 11
0% 4 4
Retail Financial Travel Other
Source: Econsultancy and ExactTarget. Marketing budgets 2010

26. Commission to networks and
affiliates
Commission level examples:
• Travel (flights) – 1%
• Retail – 5%
• Subscriptions – 20%
• Digital goods – up to 50%

27. RETURN ON INVESTMENT

28. Return on Investment
Drive revenue
• Generate sales/actions
• Drive acquisitions
• Generate leads
• Increase conversion rates

29. Return on Investment
Reduce costs
• Only pay for the sales/acquisitions
• Marketing activity can be less hit-and-miss

30. Return on Investment
Improve branding
• Exposure on quality affiliate websites
Improve marketing activities
• Learn from affiliates
Open new markets
• Export opportunities

31. STRENGTHS, WEEKNESSES,
OPPORTUNITIES & THREATS
(SWOT)

32. Strengths
• Merchants like the performance marketing channel due to
the reliance on the CPA model

33. Strengths
• Merchants like the performance marketing channel due to
the reliance on the CPA model
• Despite the recession, the affiliate marketing channel
continues to grow at a strong rate

34. Strengths
• Merchants like the performance marketing channel due to
the reliance on the CPA model
• Despite the recession, the affiliate marketing channel
continues to grow at a strong rate
• Affiliate marketing is often described as a “win-win”
marketing channel

35. Strengths
• Merchants like the performance marketing channel due to
the reliance on the CPA model
• Despite the recession, the affiliate marketing channel
continues to grow at a strong rate
• Affiliate marketing is often described as a “win-win”
marketing channel
• The affiliate marketing channel works well for both small
and large-sized organizations

36. Strengths
• Merchants like the performance marketing channel due to
the reliance on the CPA model
• Despite the recession, the affiliate marketing channel
continues to grow at a strong rate
• Affiliate marketing is often described as a “win-win”
marketing channel
• The affiliate marketing channel works well for both small
and large-sized organizations
• The company has control over who they work with

37. Weaknesses

38. Weaknesses
• Terms violation

39. Weaknesses
• Terms violation
• “Dark arts” affiliates

40. Weaknesses
• Terms violation
• “Dark arts” affiliates
• Fear of brand damage

41. Weaknesses
• Terms violation
• “Dark arts” affiliates
• Fear of brand damage
• Tracking is an issue

42. Opportunities

43. Opportunities
• Affiliate marketing is a highly flexible business model

44. Opportunities
• Affiliate marketing is a highly flexible business model
• The quality-based CPC model

45. Opportunities
• Affiliate marketing is a highly flexible business model
• The quality-based CPC model
• New channels opportunities

46. Opportunities
• Affiliate marketing is a highly flexible business model
• New channels opportunities
• New technologies

47. Threats
• Voucher-code VS “true content” affiliates.
• Bid on brand name terms
• Google represents a significant threat to SEO affiliates

48. WHERE TO START IF A
COMPANY WISHES TO OPEN
AFFILIATE PROGRAM?

49. Know your own numbers

50. Know your own numbers
• How much money can you share?

51. Know your own numbers
• How much money can you share?
• How much money do you currently spend for getting your
customers?

52. Know your own numbers
• How much money can you share?
• How much money do you currently spend for getting your
customers?
• Do you know something about average lifetime value of
your customers?

53. Know your own numbers
• How much money can you share?
• How much money do you currently spend for getting your
customers?
• Do you know something about average lifetime value of
your customers?
With these numbers, you can calculate
How much you can pay out commissions on sales.

54. Know your own numbers
• How much money can you share?
• How much money do you currently spend for getting your
customers?
• Do you know something about average lifetime value of
your customers?
With these numbers, you can calculate
How much you can pay out commissions on sales.

55. Test your conversions
• Website design
• Shopping process
• Pricing
• Marketing materials.

56. Test your conversions
• Website design
• Shopping process
• Pricing
• Marketing materials.
• Get the consultancy from affiliate marketing expert. Ask
him if they will review your and offer a report of suggestions
that need to be addressed before you launch

57. Test your conversions
• Website design
• Shopping process
• Pricing
• Marketing materials.
• Get the consultancy from affiliate marketing expert. Ask
him if they will review your and offer a report of suggestions
that need to be addressed before you launch

58. Test your conversions
• Website design
• Shopping process
• Pricing
• Marketing materials.
• Get the consultancy from affiliate marketing expert. Ask
him if they will review your and offer a report of suggestions
that need to be addressed before you launch
• Contact affiliate network

59. Questions please