Beyond the Franchise

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The New Face of Affiliate Programs Arbitrage,
Master Resellers, and The Direct Marketing
Numbers that Matter
Declan Dunn CEO ADNet International
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Agenda for Today

• The New Face of Affiliate Programs
• Arbitrage when you have a great affiliate
  program, your top affiliates will compete for
  paid advertising on per click search engines,
  pops, and other advertising. Be careful how this
  can affect your results.
• Master Resellers Right now there are only a
  limited number of partners, or Master Resellers,
  who will consistently move product. Make sure
  you know who they are and how to reach them
  before your competition.
• The Direct Marketing Numbers that Matter Many
  do not understand the 100 year tradition of
  direct marketing that makes the best affiliate
  strategies. Whether you call them affliates or
  not, its all about direct marketing.
• ..

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Before beginning, who are the affiliates?

• Top traffic web sites (and adware)?

• Email Lists?
• Per click search engine affiliates?
• Mom n pop sites?
• All of the above?

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Remember the old days?
1.  More affiliates were better, how many do you
have? 2.  You expected them to just sign up
from an affiliate software provider. 3.  You
wondered why no one was buying.
The Old Numbers
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Even better, what do we call them?

• Affiliates?

• Partners?
• Joint ventures?
• Resellers?
• All of the above?

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1. Arbitrage Do you regulate? The best
affiliates buy ads on the Internet and get paid
on performance. They are your performance media
buyers, but they can also increase the price you
pay for advertising..be careful.
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Per Click Affiliates Dynamic Arbitrage
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Per Click Affiliate Challenges
1.  Do you let your affiliates bid what they
want, even when your company buys clicks?
2.  Do you let affiliates buy brand names? Try
to buy a big brand name on a per click search
engine and you will likely find it prohibited.
3. Do you let affiliates buy clicks on WhenU
and other sites who pop and sell per click? Why
not?
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Network Solutions Case Study Managing CPC
. For example, the Network Solutions Valued
Affiliate Program provides their most effective
keywords directly to affiliates (like "domains",
"domain registrations" "domain names" "web
address", etc.). They do not allow the purchase
of the trademark name, Network Solutions. Gloria
Borza, Affiliate Program Manager of the Network
Solutions Valued Affiliate Program says, "Five of
our top 10 affiliates now are exclusively CPC
advertisers, which is a big shift from the
banner-ad marketing model of yesterday. Working
directly with them to improve their keyword
selection is a win-win our sales increase and
their rev share goes up!"
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Arbitrage is not just about per click.

• Pops

• Banners
• Leads
• Email

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2. Master Resellers Your top affiliates will
likely generate 67 of your sales at leastbut
what about the rest? The best affiliates are
Master Resellers you have to make your deal
easy to understand, reward them richly, and
provide unique ads for them to share, along with
unique offers if possible.
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Master Resellers The Traffic Funnel
Masses
Branding
Web Sites

• Adware
• Per Click Search Engines
• Email
• Web Sites
• The Masses

Email
Per Click Search Engines
Adware
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ADWARE MARKETING BECOMES SOFTWARE
Internet Retailer, Wednesday, June 4,
2003          Self-interest drives
affiliate-marketing conversion rates, says new
study In nearly every category of retail site
that Afftrack analyzed, customers coming from
programs that pay a portion of the purchase into
a consumers account, such as for college savings
or 401(k), or into a consumers favorite cause,
created the highest conversion rates. Also strong
were loyalty programs that reward frequent
shoppers and cash rebates to the shopper. This
confirms that cash-to-cause, rebate and loyalty
sites are really the powerhouses for the majority
of retail categories, Molander says. These are
the affiliates that you cannot afford not to work
with. Gifts and flowersConversion rate
Cash-to-cause 12.39Loyalty 8.94E-mail
6.46Average purchase Rebates 54.57General
shopping 52.36
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Email (Endorsed and responsive!)
ConsciousOne.com (3 days) Email
219,000 Visitors 19,545 Sales About 1000
Conversion 5.1 We also obtained more than
6,000 emails from exit pop.
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Per Click Search EnginesThe best marketing
sources are at per click search engines like
Overture and Google.
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Web Sites Use banner ads wisely and use text
links so you dont just wallpaper your web site.

• Web sites from Network Solutions let you get
  started with easy to use design tools - so you
  can create unique, customized Web sites that
  reflect who you are.
• All the benefits of a professionally designed Web
  site for pennies a day? Heres a solution that
  lives up to the promise, with no risk thanks to a
  30-day money back guarantee! Try it now for free!
  
• Get professional results at a fraction of the
  cost of hiring a Web designer. You dont have to
  spend thousands to get a professional quality Web
  site.
• Network Solutions makes it easy for you. No need
  to hire a designer, learn HTML, or figure out
  complicated software. Designing, editing and
  publishing your site on the Web is as easy as
  clicking a button! See more now!

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3. The Direct Marketing Numbers That Matter Make
sure you watch them!
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1. Effective CPM Your benchmark
Most top partners convert their revenue into
effective CPM to determine how much money they
receive from placing advertisements on their
pages. Even if youre paying these publishers
on a CPA basis, you should always know the CPM
equivalent of your campaign to see if you have a
competitive offer, and make sure youre not
overpaying. You may find that what 3rd party
sites charge for CPM is either way too much, or
sometimes less than you'd expect. Follow this
formula to get the CPM equivalent of your CPA
campaign ( of Sales X CPA) /
(Impressions/1000) Effective CPM Follow this
Affiliate formula to find out the cost per sale
when youre paying CPM ((Impressions/ 1000) X
CPM) / of Sales Cost per Sale
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2. Act on numbers, not hype.

• Know your numbers. You and your affiliate
  program are almost entirely evaluated based upon
  your effective CPM and the revenue you put into
  your partners pockets if you pay on performance.
• Work very closely with your top 40 partners.
  Get to know them personally. Build a
  relationship. It will help you tremendously.
• Offer unique incentives to drive results. Make
  your offer stand out from your competitors.
  Customize offers for your top affiliates.

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3. Test Always, dont make affiliates test

• Always provide tested, proven ads to your
  partners. While you can use your affiliate
  program to test your ads, you should dedicate CPM
  resources to determine how your ads perform
  before a roll-out.

1. Media placement
2. Creative Clickthrough
3. Tracking Conversion
4. Landing page
5. Thank you page
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Be Sure Your Affiliate Offer is Good and Easy to
put in Action

• Know your numbers and know your best sellers.
• Dont ignore the rest of the affiliates, but make
  sure you develop deals that benefit top partners.
  
• Watch arbitrage.
• Keep an in house person on top of your affiliate
  program no matter whaqt.

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Review

• The New Face of Affiliate Programs
• Arbitrage when you have a great affiliate
  program, your top affiliates will compete for
  paid advertising on per click search engines,
  pops, and other advertising.
• Master Resellers Right now there are only a
  limited number of partners, or Master Resellers,
  who will consistently move product.
• The Direct Marketing Numbers that Matter Many
  do not understand the 100 year tradition of
  direct marketing that makes the best affiliate
  strategies. Whether you call them affliates or
  not, its all about direct marketing.
• ..

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Before Questions, A Gift for You