Audible

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Audible

• A CASE STUDY IN ADVANCED AFFILIATE
• MERCHADISING TECHNIQUES
• Exporting A Complex, Tested, eCommerce,
  Merchandising
• Environment to Affiliate Sites

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AGENDA

• Key message
• Company overview
• Channel overview
• Affiliate program background
• Affiliate program strategy
• Affiliate program tactics
• Audibles eCommerce environment
• Affiliates in action
• Results
• Lessons learned

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• I am not a sales guy at heart, and I find
  creating a merchandising environment very
  difficult.I am reasonably OK at the tech side
  once I have figured out what I am going to do.
• Ray -- email from affiliate 3/3/04

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Audible is like any innovative and different
product that doesnt have huge brand recognition
and in order to sell it, you need to educate
people before they will buy it. Traditionally
sales people have been taught how to do this
offline. But 'web designers' and affiliate
marketers havent necessarily picked up these
skills. Audible has done a great job providing
tools to help teach these skills. Pedro AIM
from affiliate 6/14/04
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Summary Key Message

• You can export your eCommerce/ merchandising
  environment to affiliates
• Data feeds drive sales by providing affiliates a
  powerful tool to show the consumer what they
  want.

Building tools and providing support is key
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WHAT IS AUDIBLE?

• Audible (www.audible.com) is the Internet's
  largest, most diverse provider of premium spoken
  audio services for content download and playback
  on personal computers, CD or AudibleReady
  computer-based mobile devices.
• Audible allows its customers to download the
  content they want to hear so that they can listen
  anytime, anywhere.
• At audible.com, customers can choose from over
  23,000 audio programs, including audiobooks,
  audio magazines and newspapers, radio programs
  and more.

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THE AUDIBLE SERVICE
AudibleManager
www.audible.com
Audible Content
AudibleReady Devices
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44,000 HOURS OF PREMIUM CONTENT-Growing at 600
hours/week
Fiction
Non-fiction
More
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PARTNERSHIPS 160 Media Partners
Radio
Newspapers / Magazines
Audiobooks
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PARTNERSHIPS Technology
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PARTNERSHIPS Distribution
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CJ AFFILIATE PROGRAM HISTORY

• Launched in 2001
• Not a focus for 2 years
• New program management in Nov 2003
• Prior program results
• 3 data feed sites drove 80 of sales (all Audible
  customers)
• Book sites drove the rest of sales
• Mass market traditional affiliates did not drive
  revenue much revenue and in fact damaged EPC
• Re-launched program on Jan 27, 2004

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• Committed
• AudibleListener

VIP Commission 50 combined AudibleListeners a
month 25

• With 12-month commitment, customer gets free or
  discounted player.

Commission 16 to 20
Non-committed AudibleListener
A la carte

• Individual book sale
• Lead for AudibleListener

• No commitment
• Customer can cancel at any time
• Offer for sign-up

• Commission 12 to 17 plus 50 cents new customer
  bounty

Three Products in Affiliate Program
Commission 11 to 15
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KEY NUMBERS

• 25 of total sales are AudibleListener (AL)
  members
• Churn rate for AudibleListeners less than 5
• Life time value of both AudibleListener products
  similar
• 15 of affiliate A la carte (ALC) convert to
  AudibleListener
• 31 of A la carte customers (that never subscribe
  are repeat customers)
• 73 of affiliate customers are new to Audible

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CHALLENGES TO SELLING AUDIBLE THROUGH CJ
AFFILIATE CHANNEL

• Unique, cutting edge product
• Subscription-based service (affiliates do not
  like these products in general)
• Difficult product for affiliates and customers
• Hard to understand Audible is lifestyle,
  concept and a product
• Technology barrier
• Content is king! It drives sale, but
• Hot content changes all the time
• Content is a la carte sales, but we want to sell
  subscriptions.
• Niche market traditional affiliate sites dont
  work well

Challenge to export our complex merchandising
environment to affiliate sites
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CJ AFFILIATE STRATEGY

• Create an cadre of affiliate sites that implement
  Audibles tested, merchandising environment

• Export what Audible has learned about selling
  this product to our affiliates
• Focus on the up-sell of AudibleListeners with
  affiliates
• Merchandise content to drive purchase
• What is Audible/how does Audible work
• Provide useful tools and personal support to help
  affiliates
• Note this is one prong of our overall strategy

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TACTICAL OVERVIEW
Data feeds
Graphics language
Portal website
Strategy
Newsletters
Coupons
Sales documents
Contests
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TACTICS Portal Support Site
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TACTICS Segmented Data Feeds
14 data feeds updated weekly to help affiliates
merchandize our products because content drives
the sale

• Book Clubs
• Oprah's Book Club
• Today's Show Book Club
• Good Morning America Book Club
• Best Sellers Lists
• New York Times'
• Business Week's
• Publisher Weekly's
• Bargain Books
• Under 10 bin

• General Audible Lists
• All products
• Audible's books for children and young adults
• Celebrity readers list
• Audible's Best Seller's Lists
• 20 best sellers from each category
• 200 best sellers
• 200 sellers for women
• 200 top sellers for men

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TACTICS Coupons to Up-sell Users

• Committed memberships
• 100 off a Audible ready device iPod, Palm, etc
• Free Creative Muvo MP3 player
• Non-committed membership
• Free content with purchase
• Free book
• Free subscription
• Free trial (VIP link)
• 50 off first month/2 books for 10
• A la carte
• 9.95 first book
• 50 off first book

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TACTICS Detailed Sales Guides And Fact Sheets

• Overall sales guide
• Detail page guide
• Optimizing for search guide with key work help

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TACTICS Contests and Promotions

• Contests designed to promote membership rather
  than a la carte sales
• Cash awards
• Accelerated commission structure tied to level of
  membership sales

Audible has continual sales contests and
promotions to encourage affiliates to sell
AudibleListener
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TACTICS Provide affiliates graphics and language

• Develop and test graphics for affiliate sites to
  help explain Audible
• Develop and test ad and webpage language for
  affiliate sites

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TATICS Newsletters

• Monthly Newsletter
• Weekly merchandising newsletter is being developed

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AUDIBLES eCOMMERCE ENVIRONMENT Home Page
Consumer education on the home page
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AUDIBLES eCOMMERCE ENVIRONMENT Detail Page
Consumer Education
AL up-sell
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AFFILIATES IN ACTION Home Page
Consumer education
AL up-sell
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AFFILIATES IN ACTION Home Page
AL up-sell
Merchandising using feeds
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AFFILIATES IN ACTION Detail Page
AL up-sell
Consumer education about Audible
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AFFILIATES IN ACTIONDetail Page
Consumer education about Audible
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Results Affiliate sales by channels in CJ
Coupon/Shopping
6
10
/Others
Content
Datafeed
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Search Arbitrage
57
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Results AudibleListener vs. A la carte

• 200 increase in AudibleListeners during last 6
  months in CJ
• 78 increase in A la carte sale during last 6
  months in CJ
• A la carte/AudibleListeners moved from 13 to 26
  during last six months
• Data feeds sites moved from ALs as 10 of sales
  to 20 of sales

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Results Conversion Numbers

• Data feed sites
• Mean 6
• Top performer 12.5
• Content sites
• Mean 1.6
• Others
• Mean 1.1

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LESSONS LEARNED

• Most affiliates understand building merchandising
  environment
• Affiliates needed more help understanding the
  Audible eCommerce environment than expected
• Exporting eCommerce information to shopping and
  coupon sites had minimal impact on mass market
• Affiliates greatly appreciate tools that enable
  them to sell
• By giving affiliate graphics and language, we cut
  down on policing