1. 9/30/2011
Meet the Presenters
• Carolyn Kmet is the director of affiliate
marketing for Groupon.com. Previously, she
led the client services team at
ShareASale.com, an affiliate network; and
was responsible for growing the affiliate
channel at Orbitz.com, Bradford Exchange
and MyPoints.com.
• Carolyn has a B.A. from University of California at Berkeley, an
MSJ from Northwestern University and an MBA from Loyola
University of Chicago. She got into online marketing in an effort to
pay off her academic addiction.
Meet the Presenters
• Todd Farmer is CEO of PerformStreet Media, an
internet marketing consulting and technology firm
specializing in Affiliate Marketing. He also
teaches Internet Marketing at University of San
Francisco online.
• In January 2011, Todd was recognized
by Affiliate Summit, winning the "Affiliate
Marketing Legend" Award.
• In 2005, Todd sold the company he founded in 1996 that created
the first Affiliate Marketing Tracking & Management Solution and
offered Affiliate Program Management Services for its technology
clients. He worked as a division president for the acquiring
company until 2008.
1

2. 9/30/2011
Meet the Presenters
• Jim Gribble began his career in direct
marketing three decades ago. He served as
a profit center manager at such top direct
marketing companies as Phillips Publishing,
Grolier Direct Marketing, International
Masters Publishers, International Home
Shopping, and Xerox Education
Publications.
• In 1999, Jim founded LinkProfits, one of the first companies to
offer outsourced affiliate program management services to
ecommerce merchants. Since then, he has helped over 30
merchants realize the full potential of their affiliate program
initiatives.
10 Successful E-commerce Affiliate Program
Marketing Strategies
• Find out the most critical aspects involved with
launching and managing a successful affiliate program
and how to approach each aspect in the best way.
• Benefit from real-world examples and suggestions of
specific resources to best help you implement the
important strategies we will present.
Why Affiliate Marketing?
• Performance-based Channel
• Completely Measurable!
• Extended Reach
• Natural Search extension
• Outsource PPC
• Affiliates Focus on Direct Sales
• Recommendations by Affiliates
• Brilliant Channel -- if managed properly.
o No AutoPilot Success
2

3. 9/30/2011
Why an affiliate program is a viable marketing
channel for Groupon:
• Affiliates enable retailers to merchandise a brand
beyond its own limitations: ex. Groupon and travel
• The channel helps personify the Groupon brand: social
media mavens, mommy bloggers, etc.
Is an affiliate program a viable marketing
channel for your ecommerce business?
• Just because affiliates are paid on a performance basis,
there are still investments required to start up, build,
and manage an affiliate program.
• An affiliate program is not a panacea for a weak
business concept.
• Your site needs to be successfully converting traffic
to buyers before you consider an affiliate program.
Is an affiliate program a viable marketing
channel for your ecommerce business?
• If you're running a successful ecommerce site, then there
is no reason for you not to offer an affiliate program.
• You then need to determine how much are you ready to
invest in your program. You need to consider:
o Will I run my program on an affiliate network or have an
‘internal’ program -- or both?
o How will I compensate my affiliates?
o Who will manage my program?
We’re going to explore these questions and more, in-depth
during our presentation.
3

4. 9/30/2011
Deciding on a CPS, CPL Affiliate Program and
the differences between big “Retail Networks”
and “CPA Networks”
• When determining your Affiliate Marketing Strategy,
what do you need to know about the different payout
types, and the different types of affiliate networks?
CPS = Cost Per Sale ("commissions")
CPL = Cost Per Lead ("data")
Deciding on a CPS, CPL Affiliate Program and
the differences between big “Retail Networks”
and “CPA Networks”
CPA = Cost per Acquisition
These are both "Acquisitions":
• CPS = Cost Per Sale
• CPL = Cost Per Lead
However, the industry generally uses the terminology
"Affiliate Networks" and "CPA Networks" to
differentiate between the two.
The “Retail Networks” Include:
4

5. 9/30/2011
“Retail Networks” vs. “CPA Networks”
• Cost per Acquisition (CPA) Networks or "Lead Networks"
(CPL) typically promote 'registration' type offers where
there is no actual sale generated.
• Advertisers on these networks are typically looking for
leads. Offers types include: insurance, financial
products, vitamins, weight loss, health, beauty,
memberships and other continuities, etc..
CPA Networks: Some of the Players
• Hydra
• Motive Interactive
• ClickBooth
• Affiliate.com
• Azoogleads
• MarketLeverage
• Copeac
• MaxBounty
...there are hundreds!
Our Concerns About “CPA Networks” and Why
We Are Not Recommending Them:
CPA Networks are a "super affiliate".
-- Sub contracting with unknown "sub
affiliates".
• No control
• No transparency
• No brand management
• No placement management
• Fraud concerns
CPA Networks are for DATA - not retail.
• Incentive traffic
• Traffic quality
• Lead quality
5

6. 9/30/2011
Our Concerns About “CPA Networks” and Why
We Are Not Recommending Them:
• Types of advertisers (all advertisers great and
small vs. data aggregators)
• Types of payouts (all types vs. CPA)
• Relationship between you and your affiliates.
• Ad units (mini vs. all kinds -> product links,
datafeeds, geotargeting, dynamic creative, tools.)
• Technology provided (simple conversion tracking
and multi-pixels vs. robust creative tracking,
affiliate reporting, advanced tools, webservices
and API's)
Our Concerns About “CPA Networks” and Why
We Are Not Recommending Them:
• Types of affiliates (aggressive search and
emailers vs. all kinds: niche, content, product-
specific, topical, entertainment, news, loyalty,
coupon, search and email)
• Affiliate recruiting
• Application process
• Affiliate management (service, marketing, and
performance vs. deal makers and sales)
The Quality Focus...
The merchants who continue to run successful
affiliate programs are more focused on quality
networks and partnerships than ever before:
• ONE network program and/or an internal
program only.
• 90/10 rule is no longer the norm for these
merchants.
• They are focusing more on the '10' -- quality,
productive affiliates -- and expanding
relationships that make sense.
6

7. 9/30/2011
“Choosing Your Solution”
Should you join one of the affiliate program
networks or run a private/internal program?
• Before launching your affiliate program, you need to
decide the platform upon which you will run it.
• Let’s discuss the differences between an in-house
solution, and choosing one of the available networks.
“Choosing your solution”
An Overview
• A Trusted 3rd Party Network
• In-House/Private Program
• Both
• Multiple Networks
(Not going to discuss CPA Networks as an option.)
Choosing your solution:
Understanding Networks
It’s pretty clear that affiliates prefer to work with
merchants though a respected third party network.
The primary reasons for this are:
• They want to ensure they get paid.
• They don’t want to learn the ‘ins and outs’ of
working with your affiliate ‘system’.
• Centralized reporting, convenient tools, API's,
more...
7

8. 9/30/2011
Choosing your solution:
Understanding Networks
Brand strength may be a contributing factor:
• Young brand
Can you manage cutting checks, sending out tax
forms, etc. Plus, it’s easier to recruit because
you’re in a “shopping mall” of affiliate programs.
• Mature brand
Amazon and eBay have established brand
credibility and trust, and have more
infrastructure to manage payment and tax
functions.
Choosing your solution:
Understanding In-House Solutions
However, if control and flexibility is needed, then a
customized in-house solution may fit more technically --
but the recruiting challenges are typically immense.
• More integrated with the business
• Ecommerce / CRM Integration - potential tight
control
• Demands more on IT Resources
• Completely flexible
• Customizable
• Sophisticated Strategies can be executed
• Payment to Affiliates
• Tax forms (1099's, W9's)
“Choosing your solution”:
One or More Solution
Should you run your program on a single network, multiple
networks, in-house, or both?
• Most run on a single network to maintain focus
• Many run a single network and in house
o Network reach and "partner program"
• Many run on two networks
o Extended reach
• Example of a program on multiple Networks:
o VistaPrint is everywhere -- how can they effectively
manage all those relationships?
• Benefits of being on a single network
8

9. 9/30/2011
The Healthy Back Institute's Successful
Internal Affiliate Program
• In five years, with only an internal program, HBI has
developed an affiliate and joint venture channel that
generates significant sales (in the millions)...
• Success can be attributed to:
o A strong front-end offer (a free book)
o 'True' lifetime commissions for affiliates that
are tracked via a database (not cookies)
o Proven-effective promos and content provided
to affiliates
o Close relationships with affiliate partners
Establishing an affiliate compensation plan that
is attractive, yet affordable.
• When setting affiliate commission rates, you need to
determine the optimal rate that takes into consideration:
overall profitability, product profitability, lifetime customer
value, competitor payouts, conversion rates, affiliate
attraction, bonus tiers, attractive EPC, ‘room’ to secure
desired relationships, credit affiliates with phone orders
they refer, etc.
• Consider product-specific commissions! This allows
you to feature products and offers. "All next week we will
pay double commission on ..."
How to promote your Affiliate Program so
desirable affiliates find you.
• In addition to your Affiliate Manager’s direct
recruitment practices, affiliates need to know
about your program and apply.
• Let’s discuss how to publicize your affiliate
program and entice quality affiliates to apply.
9

10. 9/30/2011
How to promote your Affiliate Program so
desirable affiliates find you.
• Network Resources
• Intra Network Promotions
• External Promotions
• Affiliate Program Blog
• Affiliate Directory Listings
• Forums
• Podcast Guests
• Networking
• Affiliate Summit
How to identify, approach and secure
partnerships with desirable affiliates.
• Your affiliate program needs the best affiliates, and you
need to be able to reach out to them and secure their
participation.
• Let’s discuss the elements important in successful
affiliate recruitment practices.
How to identify, approach and secure
partnerships with desirable affiliates.
• Quality Recruiting takes time
• SPAM is bad.
• Identify:
o First, use Basic Search tools
o Next, use more advanced tools
• Approach:
o Direct, personal, benefit-focused.
o Build Relationship
• Secure Partnerships:
o Activation is most important. "Get started!"
10

11. 9/30/2011
How to identify, approach and secure
partnerships with desirable affiliates.
Thinking Outside The Box...
• How many of you have merchant partners that operate
in your niche or a complementary niche?
• Most assume that since merchants don’t typically
advertise on their sites, that they will not be open to
becoming affiliates.
• The vast majority of Lose the Back Pain's affiliate sales
come from merchant partners who email the offer to
their subscribers. LTBP often reciprocates by mailing the
merchant partner's offer to their subscribers.
• Considerations: Leakage
Hiring an Affiliate Manager or Outsourcing
• Who will run your affiliate program and how
should you compensate them? How will your
company support the channel?
• Let’s discuss the elements important to ensuring
a well-managed affiliate program.
Hiring an Affiliate Manager or Outsourcing
The critical factor is you need to have experienced &
dedicated resources, programs don’t run themselves!
• External: OPM or Agency
• Internal: eBay
• Internal + External: Groupon team structure
Key takeaway...hire someone with experience.
11

12. 9/30/2011
Hiring an Affiliate Manager or Outsourcing
What does experience bring?
• Established relationships
• Knowledge of what it takes to activate particular affiliates:
money, exclusives, product samples?
• Experience with cross-sector performance benchmarks
• Understanding of seasonal fluctuations
• Insight into cause/effect of various affiliate tactics
Segment your affiliate base to optimize
efficiency, reporting and communications
• How can you segment affiliates?
o Niche: Coupons, Travel, Moms, etc.
o Traffic type: PPC, email, forum, etc.
o Performance: Top-tier, mid-tier, etc.
o Potential: High EPC, quality traffic, etc.
• Mine inactive affiliates = low-hanging fruit
Providing results-oriented marketing material
for your affiliates.
• The marketing material you provide your affiliates
must be perfect for each affiliate, and their
promotional efforts on your behalf.
• Let’s discuss the variety of marketing material
important for a successful affiliate program.
12

13. 9/30/2011
Providing results-oriented marketing material
for your affiliates.
Groupon creates tools that make it easy for different types
of affiliates to drive traffic to us:
Dynamic Banners
Providing results-oriented marketing material
for your affiliates.
Groupon creates tools that make it easy for different types
of affiliates to drive traffic to us:
Widgets
Providing results-oriented marketing material
for your affiliates.
Groupon creates tools that make it easy for different types
of affiliates to drive traffic to us:
Link Generator
13

14. 9/30/2011
Providing results-oriented marketing material
for your affiliates.
Providing results-oriented marketing material
for your affiliates.
Groupon creates tools that make it easy for different types
of affiliates to drive traffic to us:
API
How to best promote through affiliate
deal/coupon sites.
• Affiliates come in all shapes and sizes. Some of the
most popular affiliate types are the coupons / deals /
incentive / loyalty sites.
• Let’s discuss how to leverage their reach and influence,
while remaining profitable for you.
14

15. 9/30/2011
How to best promote through affiliate
deal/coupon sites.
• We always tie increases in commission to an actual
marketing plan: Where are you going to feature
us? How many dedicated emails and when? How
much will you increase cashback for the
consumer? Plus, we set the increase to expire after a
set period of time to force us to evaluate the ROI of the
deal.
• Recognize LTV of customer that comes in through an
incentive site
• Give specific coupon codes to individual affiliates vs.
general coupon codes.
Key Take-Aways
• An affiliate program is not a panacea for a weak
business concept.
• Focus on quality with respect to:
o One network and/or one internal program (avoid
CPA networks)
o Experienced, dedicated management
o New affiliate recruitment practices
o Relationships with affiliate partners
• Establish attractive compensation terms
• Segment your affiliate base & mine inactives
• Create effective, results-oriented promotion materials
Panel Contact Info
Carolyn Kmet Todd Farmer Jim Gribble
Groupon.com PerformStreet.com LinkProfits.com
ckmet@groupon.com todd@performstreet.com jim@linkprofits.com
@catango @toddfarmer p 301 916-3900
AffiliateMarketing @LinkProfits
Plan.com
15