Affiliate Marketing Handbook

AFFILIATE

MARKETING

HANDBOOK

OCTOBER 2016

The 2016 Afliate Marketing Handbook was compiled by the IAB Afliate Marketing

Working Group.

Members of the IAB Afliate Marketing Working Group:

Anthony Capano

Rakuten Marketing

Richa Dani

Columbus

Roger Lee

APD

Verity Beard

Allure Media

Zane McIntyre

Commission Factory

Isabell Schneider

MediaCom

Chris Garner

Cashrewards

Matthew Sheppard

Navigate Digital

MediaCom is the “The Content + Connections Agency”, working on behalf of its clients to leverage their

brands’ entire system of communications across paid, owned and earned channels to step change their

business outcomes. MediaCom delivers not just individual channel silo efciencies but also connected

communications system effectiveness, by developing and optimising all content – dened as any form of

consumer messaging – as the fuel that drives high-performing systems. MediaCom measures and quanties

communications systems across paid, owned and earned through their unique Connected System Audit.

Columbus is a digital connections agency driven by a blend of performance and experience expertise underpinned

by data and technology. Our talented and passionate team partners with our clients to build meaningful connections

between people, ideas, and brands. Our expert data navigation, pioneering strategy and exploration of emerging

technology push us further to understand the customer journey and drive people’s behaviour; we create value for

our clients. Since its inception in 2006, Columbus has been a pioneer in the Performance and Experience space,

growing to become the largest agency in Australia in our eld.

APD is a full service, 360 degree digital marketing agency. Afliate has always been one of the core services that we

offer, having brought the industry to Australia in the early 2000’s as dgm. We now have ofces in Sydney, Melbourne

and around the APAC region. We believe in working collaboratively and openly with our advertisers to develop

their digital strategies and achieve their digital goals. Our premium Afliate Network uses state of the art tracking

technology and allows our advertisers to partner with Australia’s top Afliate Publishers.

Allure Media is one of the fastest growing digital publishers in Australia. We partner with some of the world’s largest

and most innovative publishing partners to bring their brands to Australia. As brand custodians in this market, we

are about fast-paced content produced by high prole local editors and distributed in a way that is fresh, relevant

and actionable. The Allure Media team is responsible for the publication and continuous development of ten global

brands in Australia, including the likes of POPSUGAR, ShopStyle, Business Insider and Gizmodo amongst others.

Cashrewards is the fastest growing online shopping community in Australia and we are still in start up phase. Based

on the NAB online retail index, Cashrewards delivered 1.05% of all online retail spend in Australia in FY16 with over

$210M in sales. We are now delivering $20M a month in sales for the largest brands including eBay, David Jones,

Expedia, Coles, Woolworth’s. Our aim is to disrupt shopping in Australia and give over 2M Australians more cash

rewards than any other loyalty site in the country.

Commission Factory is one of the largest afliate networks in APAC with over 400 retailers or service providers.

Launching in 2011 as a startup within a local tech incubator Commission Factory was researched and developed

by ex-Publishers and Advertisers that had a desire to disrupt the status quo of afliate marketing and to be more

accessible to a wider range of clients. From SME’s to large Enterprise clients, the platform lends itself to be as simple

or complex as you need it to be with new features and technology being added regularly.

IAB Afliate Marketing Working Group member companies:

Navigate Digital is an award winning, independent, experienced, straight talking and approachable performance

marketing agency. It employs a strategic approach that is bespoke to each of its clients, ensuring it creates innovative

digital media solutions that deliver tangible results.

Rakuten Marketing is the global leader in omnichannel marketing, delivering its vision of driving the omni experience

– marketing designed for a streamlined customer experience. Offering an integrated strategy that combines

consumer centric insights with e-commerce expertise, Rakuten Marketing’s omnichannel services include Rakuten

Afliate Network (formerly LinkShare), Rakuten Display, and Rakuten Attribution. Operating as a division of Rakuten

Inc. (4755: TOKYO), one of the world’s leading Internet service companies, Rakuten Marketing is headquartered

in New York City, with additional ofces in Australia, Brazil, Japan, the United Kingdom, and throughout the United

States. Follow us on LinkedIn or learn more at http://rakutenmarketing.com.au.

Contents

INTRODUCTION ... 4

WHAT IS AFFILIATE MARKETING? ... 5

HISTORY, KEY PLAYERS & CURRENT CHALLENGES ... 7

AFFILIATE TYPES ... 10

BEST PRACTICES FOR ADVERTISERS ... 12

CHOOSING YOUR AFFILIATE NETWORK ... 14

ROLE OF AFFILIATE MARKETING IN THE MARKETING MIX ... 16

KEEPING CONTENT ALIVE IN THE AFFILIATE CHANNEL ... 18

KEYS TO SUCCESS ... 20

CAPITALISING ON TECHNOLOGY ... 22

A MODERN MARKETPLACE ... 25

GLOSSARY ... 28

CONTENTS

INTRODUCTION

The Australian digital advertising and marketing ecosystem is growing

and Afliate Marketing is a key part of the value chain. Afliate

Marketing has outgrown its role as just another marketing channel and

become an objective in its own right. Afliate Marketing uses many of

the same tools as the more traditional digital marketers - such as email,

search, social, SEO and retargeting - and now is an integral part of

many integrated marketing campaigns.

Well managed and executed afliate campaigns will help brands

thrive by driving efcient consumer acquisition. I know from my time at

lastminute.com just how valuable Afliate Marketing can be in driving

product sales. Yet it can do so much more for a brand: With the ubiquity

of mobile devices and the continued rise of programmatic trading, it can

deliver valuable audience- and consumer-data insights across multiple

platforms.

Councils and Working Groups are the lifeblood of the IAB: With

representation from some of the best minds in the industry, they are an

unmatched repository of knowledge on all things digital. The Afliate

Marketing Working Group will help dene this ourishing marketing

discipline going forward by setting standards and best practice

guidelines to benet the entire industry.

This Handbook has been complied by the best in the industry to provide

an outline of the industry as it exists, the role of content and technology

and place of Afliate Marketing in the modern digital marketplace.

“

”

Vijay Solanki

CEO, IAB Australia

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK5

WHAT IS AFFILIATE

MARKETING?

It’s a good question, and one with an ever

evolving answer. So let’s start at the beginning

by trying to give it a simple denition:

Afliate Marketing is the practice whereby a

digital publisher or website promotes an online

retailer and earns a commission based on the

sales or leads that the advertising generates

for that online retailer.

We term this payment metric CPA – Cost Per

Action. Typically an ‘Action’ is a sale of an

online good or service, but it can also be a

lead or registration, a call, a download or any

other trackable action that is desired of the

end customer. In recent years this has grown

to even include ofine sales — provided they

can be tracked back by a coupon or barcode.

There are two ways the CPA are set:

Flat rate: For every action a xed fee is paid.

This is typically used for registration type

actions with no cost, such as a credit card

sign-up or for a xed price product like a

mobile phone contract.

Revenue Share: The price of the item

purchased is tracked and a percentage of

that price is then paid to the afliate. This is

generally favoured by advertisers selling a

range of tangible goods at varying prices,

such as fashion retailers.

Afliate Marketing is part of the performance

marketing family, meaning the return on

investment is guaranteed and the advertiser is

only paying for advertising that has succeeded.

It’s a versatile channel and is very effective at

driving actions for merchants selling consumer

products or services across a wide range of

verticals, including apparel, travel, electronics,

health and beauty, telecommunications, nance

and groceries. It should be considered as a

key part of an advertiser’s marketing mix in an

integrated campaign, specialising in turning

brand awareness and interest into conversions

towards the end-of-purchase funnel.

We use the terms ‘Afliate’ or ‘Publisher’

to dene the website that is promoting the

brand or products. In later chapters we’ll

look more in-depth at the business models

that afliates employ to drive actions for the

advertiser. For now, let’s just dispel a common

misconception: Afliate Marketing isn’t just

banner advertising, in fact, most campaigns

will get less than 10% of their sales as a

result of banner advertising. Consumers

have learned to ignore these banners, so

successful afliates employ smarter, more

engaging tactics to generate sales for the

advertisers they work with, with most sales

coming from ‘text links’ often hidden behind

‘Buy Now’ or ‘Shop Here’ type buttons. A ‘text

Link’ in the afliate world is just a trackable

URL that redirects to the relevant page of the

advertiser’s website.

Whilst the majority of afliates still generate

actions for their advertisers by promoting on

ROGER LEE

APD

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK6

their own website or blog, there’s now many

other ways they generate customers. This

includes email marketing, mobile apps, paid

search, remarketing widgets or campaigns,

ofine promotions and social campaigns. The

scope is almost unlimited. Any publisher or

partner paid to promote on a CPA metric could

be considered an afliate.

How does it work technically?

Most advertisers will employ an Afliate

Network to administer the tracking of their

Afliate Campaign. The network will provide

a set of tracking links to the afliates that

sit behind the banners and text links on

the afliates’ websites. When the customer

clicks on that link a cookie is dropped onto

their computer and that click is registered by

the Afliate Network. When that customer

then completes a purchase and reaches the

advertiser’s conrmation page, the Afliate

Network’s tracking tag is red. That tag

checks for the relevant cookie and if the

customer has come from one of the Afliate

Network’s publishers, the sale is recorded

by the Afliate Network in their platform. Via

that platform both the advertiser and afliate

should be able to see that the sale has

tracked and a commission can be awarded.

The advertiser populates the tracking tag

with all of the information relevant to the sale,

typically the price and order ID are always

included, then additional elds such the

product stock keeping unit (SKU) or promotion

code can be added and tracked to assist with

analysis of the campaign’s performance.

Again, there’s a wide range of complications

and options to improve on the basic tracking

model. The more advanced networks are

able to provide cookie-less tracking, so that

sales can still be attributed to afliates when

the user has blocked or deleted the afliate

cookie. This is becoming increasingly

important as some browsers automatically

block third-party cookies. More complex

tracking can utilise unique promotional

codes or block non-afliate codes to record

sales. Afliate tracking pixels can be

conditionally red to de-duplicate against

other trafc sources — though complex

programming is needed around the rules for

this, given that cookie lengths are typically

much long than a single session.

1. Customer visits publisher

website

2. Customer sees

advertising banner/link

and clicks through via an

affiliate tracking link. The

customer will likely not

realise they have used an

affiliate link

3. The click is tracked by

the affiliate network and

a cookie is placed on the

customer’s device to identify

them as being referred by

an affiliate network

4. The customer completes

an online purchase

5. The advertiser fires the

Affiliate Network’s tracking

tag which reports the sale

to the affiliate network as

there is a cookie present

6. The Affiliate Network

reports the sale to the

advertiser and they pay the

agreed commission for that

sale

7. The Affiliate Network

pays the commission to the

publisher as a reward for

generating the sale

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK7

HISTORY, KEY PLAYERS &

CURRENT CHALLENGES

Australia’s development of Afliate Marketing

was initially based around relatively simplistic

self-serve platforms that afliates could

access in order to gather the links they

needed. This mirrored the early development

of Afliate Marketing in other markets.

In the last decade these platforms have

been overtaken by the emergence of more

advanced Afliate Networks. In Australia

these Afliate Networks are a mixture

of locally owned businesses as well as

international networks.

As the market matures it would appear

that Australian programs are consolidating

to key players with local presence.

Having feet on the ground is important to

international retailers wishing to maximise

their Australian Afliate Marketing efforts. In

addition to these networks, there has been

the emergence of specialist performance

marketing platforms. These SaaS (Software

as a Service) businesses have cemented

a position with some of Australia’s largest

retailers and perform a wide variety of

tracking services beyond Afliate Marketing.

They offer a deep dive into consumer data

that is often beyond the typical requirements

of advertisers. This market structure now

mirrors their equivalents in mature markets

like the U.S. and U.K. The businesses

involved are commonly seeing high double- or

even triple-digit growth.

With the growth of Afliate Network came

the rise of the Afliate Agency in Australia.

Agencies in Australia offer an objective

management service to retailers helping them

negotiate what can be a noisy market place.

Agencies should position their Afliate Program

amongst the often headline-grabbing digital

neighbours of Search and Display. It has been

reported that large agency groups are seeing

greater demand for these services from their

clients who lack the expert resource to manage

their own programs.

Australian Afliate Marketing has seen the

emergence of technology vendors, like those

who specialise in conversion optimisation,

search and display retargeting. These rms

have seen great success in Europe and are

replicating it in Australia. This will be covered

in more detail in the Technology section (see

page 20).

This work has led to the adoption of Afliate

MATTHEW SHEPPARD

NAVIGATE DIGITAL

Australia’s development of Afliate Marketing was initially based around self-serve platforms that

afliates could access and gather the links they needed. Over the past ve years these platforms

have been usurped by the emergence of Afliate Networks which were born in Australia, or

imported and served by local teams. This approach now mirrors their equivalents in other markets.

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK8

Marketing programs by some (but it has to

be said, not all) of Australia’s largest retailers

and an ever-growing base of SMEs who are

often nding the performance model to be

cost effective means of meeting their business

objectives.

The diagram above shows many of the key

players in the market today and is broadly

split between technology, strategy and

management services (the Industry) and

some of rms considered to be aflaites (the

Publishers).

The numbers

There is no unied or veried data on the

volume of Australian afliates or their value

to retailers but it’s estimated that there are

approximately 3000-4000 active afliates in

Australia. At present, there are no agreed

gures on the number of retailers at play in

the Australian market or the volume of clicks,

transactions or revenue that the channel

drives. However, future collaboration by IAB

members aims to produce rm, audited gures.

Global comparisons

Given the approximate nature of our data

on the industry it is a little difcult to make

rm comparisons to other markets. However,

taking more mature markets, such as the U.K.

and U.S., there are certainly comparisons that

can be drawn:

• We see a strong community of bloggers and

content creators utilising Afliate Marketing

to monetise their sites in both markets, yet

Australia is still developing strength and depth

of individual, niche afliates.

• As with the U.S. and U.K., incentive and

coupon sites are dominant due to the nature

of their business models and in some cases,

replication of sites and processes for the

Australian market.

• Key players in the market are actively

building the industry’s reputation in Australia

through education, events and interaction with

the wider digital industry.

• It is clear that the largest retailers in the

world have embraced Afliate Marketing.

Taking U.K. broadband internet providers

as an example: rms like Virgin, SKY and

BT all invest heavily in the channel as an

acquisition strategy. At the time of writing, this

approach had yet to be replicated in Australia

by domestic equivalents. This comparison is

easily replicated through fashion, retail and

insurance.

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK9

• As with other markets, Australian retailers

enjoy the performance-led nature of

the industry and its focus on ROI and

transparency.

• Technology platforms work on a

performance basis in order to lessen the

risk of a proposition for retailers across most

markets.

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK10

AFFILIATE TYPES

Reward sites

With online shoppers becoming increasingly

savvy, reward sites have seen a surge in

popularity. This type of afliate drives sales

by rewarding its members through a share of

the commission it earns from an advertiser.

If provided with a competitive offer, reward

sites can generate signicant volume. They

provide brands with an effective way to

increase its exposure, especially if products

are not strongly positioned on aggregator

sites. If used strategically, reward websites

can drive incremental growth (e.g. reward

to increase average order value, higher

commission for purchase of new customers).

It is important to have a sophisticated

validation process in place in order to avoid

paying commissions on cancelled bookings

or return purchases.

Content sites and blogs

These types of websites are often focused on

a niche interest and feature unique content.

A few examples are product review sites,

blogs and online forums. Often, Content

Afliates form part of an Afliate Program’s

long-tail strategy and are rarely large volume

drivers. Regardless of their contribution to

overall sales, they are valued partners. The

reason for this is that unique content suggests

editorial credibility and often has a positive

impact on an advertiser’s search engine

optimization (SEO) efforts.

Content sites can also help reach a new

audience. This audience might not necessarily

be looking for your brand in particular but

could come across it through a feature in

a newsletter as the afliate reaches an

audience that is actively looking for the topic

around your brand. A great way to engage

and optimise activity with content sites is by

providing fresh content or an exclusive offer.

Recently we have also seen an increase in

integrated content pieces as well as afliates

who are using video to monetise a product.

An Email Afliate sends targeted emails to

its own (or third-party) data base to drive

conversions on behalf of a brand. In order

to drive volume, a strong and time-sensitive

offer is required and creative should be

refreshed regularly. It is important to always

consider the size and source of the data to

When we talk about Afliate Marketing, it is important to note that there are different types of

afliates. The method chosen by the afliate to promote the advertisers’ products is the key

differentiation. Each afliate type fullls a different role in terms of value, volume and reach. By

understanding afliates on an individual basis, advertisers will have the knowledge of who is best

positioned to deliver in certain industries or to promote particular products.

ISABELL SCHNEIDER

MEDIACOM

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK11

ensure it is compliant with local and brand

regulations and to avoid over promotion or

database exhaustion.

Comparison websites

These sites offer consumers the opportunity

to compare products of different advertisers

(like credit cards or phone plans). Through a

compelling offer, comparison websites can

generate large sales volumes. They vary a lot

on how they structure their rankings, which is

not always based on best product but often

earnings per click (EPC).

Retargeting Afliates

Afliates retarget most commonly through

tags that they place on the advertiser’s

site and try to re-engage with consumers

who have not completed their purchase.

This could either be via an overlay when a

consumer is about to leave a website, trying

to persuade them to stay, or via email if they

have abandoned their shopping cart, making

it easy for them to return and to complete

their purchase. The advertiser has full control

over trafc source and targeting options. It

is recommended to trial different creative

and messages and not to rely too heavily on

handing out incentives.

PPC Afliate

A PPC (pay-per-click) Afliate is a search

specialist who drives trafc to an advertiser’s

site by bidding on relevant keywords via a

custom-built landing page. They generally

work on a CPA basis but sometimes require

hybrid commercial agreements. PPC Afliates

are not for every client but can be great

strategic partners if:

• Competitors are cannibalising advertisers’

ads

• Limited budgets don’t allow for an ‘always-

on’ approach, leading to lost exposure

• Aggregator ads are appearing on

advertisers’ search terms and directing brand

trafc to competitor products

The key to a successful trial with a PPC

Afliate is to set up strict guidelines which help

ensure afliates are compliant.

Voucher and deal sites

These type of sites generate sales by offering

their users a discount code that can be

redeemed online against their purchase.

They also often promote generic deals in a

designated section. An exclusive code will

usually increase exposure on the site, where

a quick expiry date will create a sense of

urgency for consumers and can be used as a

strategic tool to drive quick sales.

Social Afliates

This type of afliate works via highly targeted

posts on social networks or sponsored

tweets, which can help to drive awareness

and assist in generating need. It is important

to keep the creative relevant, with a strong

call to action.

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK12

BEST PRACTICES FOR

ADVERTISERS

ROGER LEE

APD

An advertiser should consider their afliates

as an extension of their sales force. Therefore,

to run an effective afliate campaign, they

need to motivate their afliates appropriately

and give them the tools that they need to

promote their brand and products. As an

advertiser you should consider it a partnership

where you both have the same goal:

Generating sales of your products. These are

the key things to consider when structuring

and running an afliate campaign:

Commission

This is a key component of any campaign,

it’s the main driver in motivating afliates to

promote your brand. It’s set by the advertiser

so it could be tempting to go really low. Be

aware though, that any decent afliate is

going to choose to promote your competitors

over you if they have better payouts. A more

generous payout will give you access to better

exposure and increase the incrementality of

the sales that you receive. Equally, commission

should be set a protable rate where the

ROI on every sale is positive. Be tactical

with commission and offer higher rewards

to afliates based on their business model.

Offer short-term increases to spike sales at

key periods. Every item you sell should be

commissionable, even if it’s at a lower rate.

Always on

An effective Afliate Marketing campaign

should always be in market. As an advertiser

you’re asking afliates to write content about

your store and/or products. They will be a lot

more inclined to put in the work to promote

you if they’re condent that after building that

content they will continue to be rewarded

for that effort. This also means having an

unlimited budget, so view your Afliate

Marketing spend as a sales cost rather than a

traditional marketing budget. For every dollar

you spend on Afliate Marketing you should

be getting multiple dollars back in return so it

should never make sense to turn it off.

Track and analyse everything

Track in real time and give your afliates as

much visibility as possible across what’s selling.

If they know which products they’re selling the

most of, they can tailor content accordingly.

Get reports on the devices your customers are

shopping on, know which ‘promocodes’ have

been successful, review which creatives worked

and which didn’t. Understand which afliates

are generating sales for you and understand

why. It’s also key that tracking is accurate —

don’t track in the wrong currency or expect to

manually remove delivery costs later on. It’s

absolutely vital that your tracking is accurate

and never removed or broken.

Communicate

If you don’t talk to your afliates they won’t

know how best to promote your brand.

Provide them with your unique selling

propositions (USPs) and key messages.

Give them advance notice of sales and new

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK13

product launches. However don’t take this as

licence to spam them with new offers three

times a day or they will switch off.

Validate fairly

Most Afliate Networks will ask you to validate

the sales they have tracked at the end of each

month to allow you to avoid paying for any

fraudulently generated sales or incomplete

sales. If you are de-duplicating against other

marketing channels it should be made clear

in advance and should not include natural

search or paid search on brand terms as other

marketing channels — these customers are

just trying to navigate back to your website

after being introduced by an afliate. Again

this inuences the afliate’s motivation, if they

see a high rejection rate on your campaign,

they’ll choose to promote a different advertiser

instead. It’s also highly important to validate

sales in a timely manner so that the afliates

can be paid.

Promotional Creative

Whilst banners aren’t the most effective form

of afliate advertising they still help, especially

with coverage for key promotions. Understand

the popular sizes that your afliates need and

provide them in advance.

Strategy

Afliate models are diverse, consider each

one individually and work with your afliate

network to build an ongoing strategy for each

to give them what they need. Run tailored

promotions with Coupon Afliates, provide

content to your Content Afliates, provide an

accurate and clean product feed to your price

comparison partners, schedule promotions

with Cashback and Loyalty partners, leverage

seasonal events etc.

Beyond sales

Think about how else you can use your

afliates beyond purely generating sales.

Using afliates to build a newsletter database

is common. You can also use afliates

tactically to increase your average basket

value, to encourage customers to download

your app or shop via their mobile. Again

create a strategy for each goal you wish to

achieve and track performance. Offering an

attractive reward to afliates for encouraging

certain customer actions will help with

success.

Avoid fraud and afliate

malpractice

Very occasionally an afliate may try to

generate sales fraudulently or members of

cashback and loyalty sites will try to exploit a

loophole. With tight program rules and vigilant

monitoring it should be easy to identify this

activity and avoid paying for these sales. Have

very clear rules in place around brand bidding

and how your brand is to be advertised.

Most Afliate Networks will have tools and

processes to monitor the space and ag any

untoward activity so that you are not charged

for it. Sense check anything that looks

odd with your Afliate Network so that you

understand what is actually happening and

the value of that activity. With particular view

to cashback and loyalty sites: Don’t pay out

for large sales that could be later cancelled

— like holidays — and don’t pay out more in

commission than the customer is required to

spend to qualify for the commission — such

as a betting campaign paying $100 for a $10

deposit.

Be Responsive

Afliate Marketing is a team effort between

the advertiser, the network and afliates. It

requires constant attention and input to work

effectively. Like any marketing campaign, you

can’t set and forget, then expect good results

and growth.

Evolve

The afliate space is always changing,

there are always new opportunities and new

challenges to what worked last year. Keep

learning, keep analysing what your afliates

are doing for you and keep trialling new ways

of generating sales via the channel.

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK14

CHOOSING YOUR

AFFILIATE NETWORK

Whether you are new to Afliate Marketing

or have lots of experience in the channel it

always pays to weigh up the options between

different Afliate Networks and their strengths.

Armed with the knowledge of some of the

Network variables and what that means to

your margins and ROI’s makes an enormous

difference to the potential of your program.

The benets of Afliate Marketing are many but

none so great as the ability to pay commission

to publishers based purely on performance.

This alleviates the risk that if the trafc doesn’t

convert to sales you’re not still being charged for

the click or impression and the transparency of

the ROI with the ability to track the sales origin.

The reason networks are widely used by

advertisers can be likened to any other form

of business outsourcing where individuals

operating alone can achieve larger economies

of scale. Additionally networks offer extended

services and technology - not least the

tracking capability that is the core of the

network but also billing management across

hundreds if not thousands of publishers and

anti-fraud and compliance monitoring.

Before choosing a network

Your aims, objectives and strategy should be

clear to you before approaching Networks

and not allowing them to create a bespoke

strategy on your behalf without you being

clear on what you want to achieve.

As with any form of marketing the below

needs to be considered and dened:

Aim

The aim is about dening the reasons

why you are entering the Afliate

Marketing space to begin with. It should

highlight whether your ultimate goal

is to increase market share, increase

sales, gain better ROI or simply to

create more brand awareness.

Objectives

Your objectives will go deeper into the

aim you have specied. For example if

your aim was simply more sales then you

would dene those numbers, such as,

increasing sales by 15%, realised at about

500 extra sales per month achieving a

Return On Ad Spend (ROAS) of 15:1

ZANE McINTYRE

COMMISSION FACTORY

Strategy

Unless you are clear as to how you

want your Afliate Program to run this

is where a network can advise of the

most consistently effective strategy to

implement. This can be in the form of a

90-day launch strategy where the network

outlines clearly what needs to be done in

each week to engage publishers and meet

your objective. This will depend on whether

you are managing the program yourself

or have opted for the network to manage

your program, whereby they will likely have

presented a Service Level Agreement

(SLA) and agreed with you the strategy to

be implemented and roll out the 90-day

plan on your behalf.

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK15

If part of your objective is cost cutting

measures then it may be of interest to note

that Afliate Marketing can be integrated

with other forms of online activity such as

paid search (ppc), retargeting and cart

abandonment. Ordinarily you might be paying

for these services external from a network

and instead could opt to run them through

the network not only for attribution but also

to access them on a performance model the

same as other publishers.

How do networks charge

The largest majority of advertisers that utilise

Afliate Marketing do so through an Afliate

Network that is remunerated primarily on a

performance basis although monthly fee’s, setup

fee’s and sometimes performance minimums may

be required. Advertisers pay a fee to the network

for the sales, sign-ups or leads that are accrued

through the network’s afliate partnerships.

The fee can be classed as an “override”,

‘network payout’, ‘network bounty’ or

‘transaction fee’ and can range from 1%-30%

of any commission payment to publishers.

This means that on a $100 sale you may be

paying 10% commission to publishers so they

would receive $10 of that sale and a network

charging a 20% override will add $2 on top of

the commission, making your total payout $12

for that transaction.

Types of Network remuneration include:

• Percentage of commission (example above)

• Percentage of sale value

• Flat rate per lead

• Flat rate per sale

Networks are negotiable on their fees based

on their own projections of returns and the

information you have provided them.

Working with multiple networks

A recurring discussion by advertisers can be

the question of whether they are using too

many or not enough networks. Sometimes the

desire to add more Afliate Networks to the

mix stems from the belief that if you are using

‘Network X’ and achieving this result then

adding another Network will double the results.

Unfortunately this isn’t always the case,

especially within the same geographic region

where the overlap of publishers can be high.

Many publishers tend to be members of

multiple networks in order to have access to

the full spectrum of advertisers out there, so

the overlap of publishers from one network to

another may negate the desired result of adding

another network and gaining a higher result

than what is already being achieved. From a

retailers perspective the benets of belonging to

more than one Network may be outweighed by

the extra administration and duplication of effort

A multi-network strategy can be advisable

when your online store or service is present

in more than one country. Brands should bear

in mind that the leader in their home territory

might not be the right t for their international

strategy and may not translate to the same

results they achieve at home. Equally, it might

be the perfect t and their knowledge of the

brand and could translate into great results.

Brands should explore the market in the new

country and speak to the partners available

to them to make sure they’re the right t.

Ultimately, their local knowledge will assist

with program growth.

Commit to the Channel

Afliate Marketing is not a channel that is set-

and-forget and to succeed it is important to

regard your publishers as a sales-force, which

requires good communication, consistency

and incentivisation to perform effectively,

regardless of the Network you choose.

Evaluate your own knowledge and skills level

as well as the resource you have available

internally to manage your Afliate Marketing

activity will be imperative in the decision

making process of which network to use and

also the level of service you will require of

them.

The combination of both a large and reliable

network with a focus on technology (after all

the Afliate Industry is ever evolving) and

service will make your campaign attractive to

publishers - translating into a program that is

popular and protable.

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK16

ROLE OF AFFILIATE

MARKETING IN THE

MARKETING MIX

To understand the role of Afliate Marketing

in the marketing mix, it is important to

understand where the channel ts in the wider

digital landscape.

Afliate Marketing can be considered as

a microcosm of the digital universe. The

digital universe comprises of different

channels like Content, PPC, SEO, Display,

Social, Email, Afliate Marketing and so

on. However, Afliate Marketing by itself

consists of publishers who run activity

across all these channels. Publishers

usually earn a commission when they are

the last touchpoint in a customer’s purchase

journey. In order to maximise the likelihood

of conversion via their efforts, publishers

run campaigns on their website, blog, social

channels, customer database. As such, they

provide a diverse reach at different touch

points across all stages of the purchase

funnel.

In the last 20 years of its existence, the

channel has evolved signicantly. In more

mature markets like the U.K. and the U.S.,

advertisers are investing substantial media

budgets in this channel, which in turn has

led to a healthy growth of new and exciting

publisher models. In Australia the market is

still small, however, advertisers increasingly

are recognizing the value of this channel and

have started planning their digital strategy

holistically, including Afliate Marketing in the

planning process

RICHA DANI

COLUMBUS

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK17

Value of Afliate Marketing in

the overall marketing mix

Presence across touch points

As the user journey becomes complex

and fragmented, and with the ever-

increasing number of marketing

messages, reaching the target market at

the right time with the right message at

each touch point is of utmost importance.

Publishers are present across different

touch points in a user journey guiding

them to the nal purchase.

Data insights

If the right data points are captured,

advertisers can understand the value

of a customer recommended by a

publisher. Such rich insights can

help an advertiser to make informed

decisions around which channel is

driving the most value and where to

invest their marketing budget.

• Which target audience are your

publishers reaching?

• At what point in their journey are they

reaching your customer and with what

message?

• What is the lifetime value of the user

referred by the publisher?

• Is the average order value, repeat

business higher than other channels?

Return on investment

Afliate is often cited as one of the

highest ROI generating channel

across many studies. As per IAB’s

study in the UK, Afliate Marketing

provides ‘£14 return on every pound

spent’. Though the ROI is extremely

high for this channel, it is still touted as

channel with expertise only in ‘closing

the sale’.

As per an attribution study by an

Australian retailer, Afliate Marketing

consistently delivered the highest

return on ad spend across all

attribution models across all channels.

Fuels innovation

New and exciting technologies and

startups which enter the digital space

often rely on Afliate Marketing for

their revenue generation. Publishers

like Skimlinks, VE Interactive and

RewardStyle have become established

players promoting thousands of

advertisers across their network. Risk-

Conclusion

Advertisers who embrace the Afliate

Marketing channel, follow best practices

and understand the value of it in their

overall digital strategy, attain great success.

Successful Afliate Programs of Expedia,

Dan Murphy’s, David Jones and Westpac

have proven that when you engage the

right partners, the program can contribute

signicantly to acquire valuable customers

and add incremental sales. Some of the

mature programs contribute over 20% of their

overall digital sales.

Advertisers are increasingly viewing Afliate

Marketing not only as a sales driving channel

but also as a powerful means to discover new

customers, increase their brand presence in

front of their target audience and increase

brand engagement.

averse advertisers look at Afliate Marketing

to work with new publisher models on a

cost-per-sale model. Setting aside a test

budget for new ideas and technologies can

help them increase their overall sales at a

low cost. This channel allows innovative

publishers to test waters.

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK18

KEEPING CONTENT

ALIVE IN THE AFFILIATE

CHANNEL

VERITY BEARD

ALLURE MEDIA

In a digital discipline like Afliate Marketing

where remuneration is traditionally based on a

conrmed sale, it’s no surprise that publishers

are constantly keeping an eye open for the

next strong call to action. Discounts, offers

and rewards are proven to generate a higher

click through and stronger conversion rate.

As a result, the Afliate Channel has

previously been accused of being too reliant

on discount and sales messaging. Some

brands have shied away from engaging in

Afliate Marketing for fear of “cheapening”

their image online and cultivating an offer-

obsessed audience. However, this doesn’t

have to be the case. According to Google

one in ve luxury purchases happens online.

There is still a valuable, high-spending

audience online that Afliate Publishers can

help advertisers access and develop into

loyal, returning customers.

Provide content updates

Advertisers frequently send updates for sales

messaging, but sending over new launches,

collections, reviews or ambassador news is

equally as important. If an afliate receives

a regular stream of updates, they’re more

equipped to publish up to date and informed

content for that brand. On the ip side,

Advertisers should remember that content

partners need to cultivate their own online

brand and voice. They need to be able

to remain authentic otherwise published

content will come across as an obvious

advertisement. Not only might this discredit

their genuineness, but it could also damage

perceptions of the brand involved.

Don’t underestimate the power

of a good visual

Good quality imagery is arguably as valuable

as good quality content. The more imagery

an advertiser can provide, the less chance

there is of a publisher attempting to source

this themselves. This allows the advertiser

more control over how the brand is depicted

visually online and eliminates the risk of bad

quality or out-of-date imagery being published.

Imagery also needs to be sent in a timely

manner. Sending assets late means that the

content will have lost some of its gloss and

newsworthiness.

Sales messaging can be

complimentary

Retailers shouldn’t be put off by afliates

who want to marry up content and sales

messaging. This is a powerful combination

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK19

for ticking both the box of performance and

branding. It’s no secret that luxury brands

like Net-a-Porter and MATCHESFASHION

see their best performance during their sale

period. If it’s not possible to run product

discounts, Advertisers should consider shipping

offers. This is a way of showing the customer

the added value they are looking for whilst

maintaining product margins.

Don’t forget about the bloggers

Blogs are becoming a more and more trusted

source of product information. In the 2015

study, “How Blogs Inuence Brand Preference

and Purchase Decisions”, conducted in the

U.S. by POPSUGAR Inc. and CJ Afliate by

Conversant, 92% of blog readers reported

positive associations with brands that they had

seen on blogs and 86% said they were likely

to buy a product that is positively reviewed

on a blog. Working with bloggers can add

credibility to a brand and introduce it to a

whole new audience in a fresh, authentic way.

Not all retailers have the capacity or resource

to manage multiple blog partners and so

working with blogger subnetworks has become

increasingly popular. Blogger subnetworks

allow the advertiser to have one single point

of contact to act as their blogger liaison and

manage multiple partnerships on their behalf. In

exchange, the subnetwork will take a cut of the

commission offered.

Think about your remuneration

strategy for content differently

Retailers need to remember that content

publishers often fall short when it comes to

the last-click afliate model. Strong content

publishers with large and loyal audiences

can make a success of CPA commercials but

smaller content partners might not always

see the return on investment from Afliate

Marketing. Where retailers can be exible with

commercials, it’s important to entertain the idea

of working with content partners on a cost-per-

click or at-fee model. A reward per click or

guaranteed payment will keep content partners

engaged and motivated to promote a brand,

and retailers get to benet from the unique

digital content produced.

In closing, whilst strong trafc driving Coupon

and Loyalty Afliates will always be high up in

the in the performance marketing food chain,

retailers shouldn’t limit their Afliate Programs

by only catering to those partners. Content

publishers can be a powerful force for driving

brand perception and have a real role to play

in introducing brands to new, highly engaged

audiences. Remember, the biggest value

doesn’t always from by the partner driving the

last click.

92%

OF BLOG READERS

REPORTED

POSITIVE

ASSOCIATIONS

WITH BRANDS THAT

THEY HAD SEEN

ON BLOGS

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK20

KEYS TO SUCCESS:

TRACKING TECHNOLOGY,

MOBILE INTEGRATION &

PROGRAM SETUP

Facebook and Google account for the majority

of all digital advertising spend in Australia with

the whole online advertising spend worth

$6.8B annually, but these two channels are not

the benchmark of successful marketing plans

for retailers, just the status quo. Retailers who

invest wisely outside of these two juggernauts

in digital are often seen as the leading lights

within their industry. Examples include:

Amazon, eBay, Alibaba’s Taobao, Walmart,

Apple, Samsung, Microsoft, Expedia, Airbnb,

Uber, Spotify, iTunes, John Lewis, Nordstrom,

and Marks & Spencer.

With their progressive results and agile marketing

plans they are delivering lasting success that

consistently outperforms the market. Whilst in

Australia the very same traits are being displayed

by behemoths like Dan Murphy’s, Woolworths,

Coles, The Iconic, Menulog, David Jones,

Westpac, NAB, Telstra, and Optus.

Why are these companies so successful in

their marketing? Yes, you guessed it: These

companies have successful and well optimised

Afliate Programs. Yet, the question remains: How

is that success measured?

In the fast-paced world of impressions, clicks,

likes, tweets and pins, Afliate Marketing is

the only channel that is post-paid on results.

As referenced previously that typically means:

• Online sales - Retail: Examples of these

advertisers include eBay, Amazon, The Iconic,

David Jones, Kogan.

• Application - Financial Services: Examples of

these advertisers include Westpac, Amex, HSBC

• Subscription models: Examples of these

advertisers include Telstra, Amaysim, Audible

or Spotify.

• Lead Generation: Examples of these advertisers

include Aussie Homeloans, P&G, Youi.

Based on research produced in 2015 by

the IAB and audited by PwC in the U.K.,

Afliate Marketing generated a return of £15

for every £1 invested by advertisers and

accounted for 10% of ecommerce retail sales.

That is an exceptional result that merits a

detailed examination and should be a serious

CHRIS GARNER

CASHREWARDS

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK21

Afliate criteria

Advertisers should be clear on what type

of afliates they want to work with and

what restrictions/terms apply to each

type (such as email, cashback, PPC,

social media, coupons and content).

Notice periods

Afliates should be given adequate

notice of any changes to terms and

conditions, commissions or any other

material changes — usually in line

with the cookie length you set with the

program.

Mobile and in app tracking

With over 50% of all online trafc in

Australia now coming from mobile

Reporting attributes

Advertiser should request they get

visibility in their reporting of the

following features:

1. Time stamp of click and sale

2. Order ID

3. Sale amount

4. Coupon code used

5. Repeat or new customer

6. Product SKUs or holiday

destination

7. Referring URL (the URL that

delivered the last click)

8. IP address

9. Device

Commission amounts

The methods and rationale the

advertiser uses to attribute sales and

commission is very much exible

— typically advertisers use the last-

cookie-wins approach for afliates,

with a cookie length of 30 days.

Tag ring rules and

de-duplication

It is important to know what logic the

advertiser uses to attribute sales and

commission (typically last-cookie-wins

with a cookie length of 30-days tracking

multiple sales from the same cookie)

and at what stage in the validation and

payment cycle is attribution nalised.

The other paid channels included in de-

duplication are:

• PPC Search (excluding Brand PPC

Search)

• Display

• Social

consideration for any marketer, especially in

a world of diminishing returns and constantly

increasing Google Adwords click prices and

Facebook ad prices. No other channel gives

the advertiser the ability to control the budget

(usually uncapped in the most successful

programs), sales volumes and margin of each

sale as Afliate Marketing does and, of course,

no other channel is post paid.

Rules for success

These are the rules that determine success:

and that need to be conrmed from the outset:

Correctly and accurately measuring success

is critical to setting up Afliate Marketing

to allow it to scale. It also means you can

build on the solid foundations of this bedrock

channel long into the future. This is certainly

the case 20-plus years down the line with

Amazon, eBay and Walmart.

As with all digital campaigns if you set up

the tracking correctly from the outset you will

remove a lot of heartache in the long run. In all

the 25-year history of Afliate Marketing, this

has proven the most important facet to get right.

In most all cases, Afliate Marketing works on

a last-click-attribution model. This is important

to remember.

devices it is strongly recommended

tracking is installed across all platforms

including the iOS or Android App.

Mobile trafc and app trafc should be

tracked and attributed in the standard

way; all the most forward thinking

networks now have tracking for this. It is

a must to make clear what devices and

platforms are tracked.

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK22

CAPITALISING ON

TECHNOLOGY

ANTHONY CAPANO

RAKUTEN MARKETING

Consumers live across multiple devices, scrolling through several different newsfeeds each day,

itching for fresh and trustworthy information, whilst selectively choosing to explore content that is

most closely aligned with their lifestyle and interests. The rise of technology continues to blur the

line between online-to-ofine (O2O) and cross-device commerce, and advertisers are increasingly

turning to Afliate Marketing to ensure they’re reaching their consumers across the multi-

channel consumer journey. Afliate Marketing has proven that it can be an opportunity to expose

consumers to new and compelling brands in relevant environments through the use of technology.

Back to basics

At the most basic level Afliate Marketing is

all about technology. Partnerships are equally

as important (if not more) although without

technology, advertiser and publishers lose the

ability to optimise their partnerships and grow

campaigns.

There are a few key things for advertisers to

consider when looking at Afliate Marketing:

Tracking

• Some Afliate Networks will offer two key

tracking solutions:

1. Enterprise: Industry-leading, enterprise-

grade, full-featured tracking solution

with Server-to-Server technology.

2. Pixel: Simple, easy-to-install browser to

server tracking solution.

• Container tag solutions are also a great

option to consider.

Using feeds

• Afliates who implement feeds can

typically work with most feed types of a

brand – a Google-base compliant product

le can be easily used.

• The Afliate Networks typically have basic

feed eld requirements which can be

made available within a network’s feed

guidelines documentation.

Analytics and parameters

• Advertisers can leverage their existing

analytical solution through their network to

track trafc and conversion at one location

• Networks should provide PublisherID,

CreativeID and Link Type dynamically

so that advertisers can understand the

contribution of publisher, creative and

impact of link type on sale attribution.

• Tracking solutions within a network should

be able to be used for Google Analytics,

Omniture, CoreMetrics and others,

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK23

allowing advertisers to easily review the

performance of the Afliate Channel.

• On top of this, the major networks

provide access to real time reporting and

dashboards.

The above is really just your ticket to enter

the afliate party. Below are a few technology

trends which a brand entering this space

should also be aware of.

Mobile won’t stop growing

‘It’s the year of mobile’ – well at least that’s

what marketers have been saying for the past

ve or so years. Mobile commerce and the role

of the mobile in consumers’ path to purchase

keeps growing and it’s not looking like slowing

down any time soon. Consumers are not only

spending more time on the device, they’re

shopping more, using their mobile devices

in-store to read reviews, nd better pricing or

make an actual purchase.

In 2015 eMarketer reported that 31% of

Australian luxury sales were made on mobile,

whilst smartphones outpaced tablets 12%

through the holiday season accounting for 22%

of sales.

Fortunately for advertisers, there is a strong

afliate presence in mobile. Software

development for mobile tracking has

empowered marketers to invest afliate budget

towards strategies aimed at app adoption and

in-app engagement. There will continue to be

innovation that strengthens the success of

Afliate Marketing in mobile environments.

Afliate dominates the

intersection of online-to-ofine

Marketers understand the need to deliver

blended experiences across devices and

channels. These experiences should appear

seamless to consumers and — thanks to the

development of technology — they can.

There is a trend of traditional Afliate Publishers

building out online-to-ofine (O2O) solutions

which will continue to enhance the Afliate

Industry and provide even further evidence of

the impact the channels have on consumer

behavior. Coupon codes, card-linked offers,

geo-targeted deal alerts via mobiles apps and

the latest iteration of mobile coupons that can

be added to coupon aggregator apps or digital

wallets and scanned at the point of sale are

among the most popular O2O solutions.

That’s not to say other publisher models

aren’t playing their part. Omnichannel user-

friendly platforms that create content and

build audiences online and across devices

have fueled the growth of inuencer marketing

and created new opportunities for Afliate

Marketers. At the same time, the nature of the

modern inuencer’s role uniquely provides

advertisers with the right relationships to

extend the success of their Afliate Programs

to ofine audiences and to track its success.

Attribution is the missing piece

The rise of mobile, cross-device tracking and

O2O solutions means the single customer

view no longer easily exists. Advertisers need

to understand their customers, where they

are coming from and what makes them either

convert or abandon site.

Attribution answers these questions. Providing

insight into the entire customer journey,

attribution shows the journey from mobile to

desktop and then to ofine. And it not only

depicts a breakdown of consumer touch

points across devices, it provides insight into

the entire path to purchase, including which

afliates inuenced a sale.

31%

OF AUSTRALIAN

LUXURY SALES WERE

MADE ON MOBILE

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK24

Through the use of attribution, advertisers

have been able to demonstrate signicant

increases in the number of afliate touch

points in one consumer journey. This insight

allows advertisers to alter the way in which

they commission publishers, including

assigning a dollar value to afliates inuencing

conversion further up the sales funnel.

This doesn’t only benet the advertiser,

it allows long-tail afliates to prove their

worthiness and earn commissions on sales

they previously hadn’t been recognised for.

Adblockers may be on the rise,

but Afliate Marketers have an

advantage

Over recent years adblocking has become an

increasing concern for digital marketers, and it

shows no signs of slowing down. In fact, globally

adblocking has risen to 220 million people

(+16% YoY) on desktop and 420 million (+94%

YoY) on mobile to screen out unwanted digital

ads.

There has been a lot of discussion about

how adblockers infringe on a publisher’s

ability to generate revenue, and even effect

a publisher’s ability to create free content.

However, publishers investing in Afliate

Marketing have a unique workaround at their

disposal — native advertising.

Native advertising enables publishers to

seamlessly integrate advertisements within

their content and when done properly it is

non-intrusive. And this isn’t only a benet to

publishers, many advertisers have recognised

the benet of native advertising.

In the world of Afliate Marketing, native

advertising is already a natural factor in

many publishing models. It could be a simple

recommendation called out as a sponsored

post by an inuencer, or a code displayed

on deal and offer sites. The natural ow

and feel that native advertising provides

means consumers feel they have control

of the advertising experience, creating

positive interactions with both publishers and

advertisers.

Adblocking presents a problem that advertisers

and publishers will have to work together to

circumvent. However, Afliate Marketing does

provide a solution, with native advertising

embedded in their marketing strategy.

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK25

A MODERN

MARKETPLACE:

AFFILIATE MARKETING TRENDS,

FROM NEAR AND FAR

The modern marketplace — a place where

consumers can shop anywhere, at any time,

using multiple devices — is a mysterious

place creating a range of challenges for

marketers. Afliate Marketing is a growing

solution to many of these new obstacles.

The Australian Afliate Industry, whilst still in its

infancy is quickly adapting to new and emerging

consumer demands. Advertisers and publishers

alike are turning to the U.S. and U.K. —

markets typically considered more mature — for

insights into how to keep up with ever changing

consumer demands and technologies.

At its most basic level, Afliate Marketing is

a low-risk, cost effective tool for advertisers

to trial new strategies and technologies. On

a global front, a recent study conducted by

Forrester Research revealed that Afliate

Marketing in the U.S. will increase by a

compound annual growth rate of 10% each

year, growing to over $6.8 billion by 2020.

In Australia, the channel continues to develop.

Whereas all of the major retailers in the U.S.

and U.K. have an Afliate Program, as do

the primary nance and telco players in this

market, the retail vertical Australia has room to

grow, with only 56 out of the top 100 retailers

currently using the channel.

As can be seen, Afliate Marketing is on the

rise and is quickly becoming a ‘mainstream’

digital channel. But what are the exciting

trends across the globe and in Australia?

Leverage all stages of the

Afliate journey

Advertisers have evolved beyond direct-

response driven Afliate Programs, with the

channel evolving into a unique communication

channel playing a pivotal role throughout the

path to purchase.

In the U.S., advertisers are leveraging Afliate

Marketing for three key areas throughout the

conversion funnel:

ANTHONY CAPANO

RAKUTEN MARKETING

Discovery and awareness

Advertisers are leveraging their

Afliate Programs to promote brand

awareness, capturing the attention of

the audiences whilst in the discovery

phrases, across desktop and mobile.

Content sites and social media,

particularly Instagram and Pinterest,

are fantastic examples of this. Put

simply, Afliate Marketing is otherwise

known as “Where’d you get those

jeans?”

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK26

As the role of Afliate Marketing is evolving,

so too is that of Afliate Networks and

partners. Acting as a trusted advisor to

both publishers and advertisers, networks

are required to provide insights and

recommendations on how to leverage every

stage of the consumer journey.

The rise of the inuencer

A recent U.K. study has shown that over

a quarter (27%) of parents will purchase

an item of clothing for their children after

seeing a celebrity child wearing it. While the

study was conducted in the U.K., the list of

celebrity children with the most inuence

included North West, Harper Beckham, Suri

Cruise, Prince George and even Aussie

Flynn Bloom. The internet consistently dubs

celebrity children as trend setters, starring in

various tributes and fashion blogs.

Partnering inuencers, (not necessarily only

celebrities), who work across the Afliate

Industry, provides brands with the ability to

optimise their afliate performance, and if

working with inuencers seems impossible,

Afliate Marketing enables brands to gain

access to a large pool of high quality

inuencers who can support a brand’s

message.

Facebook is one of the most accessed

platforms. The native style of Instagram ads

and the very nature of Pinterest delivers new

ideas and products directly to consumers.

Inuencers that leverage these platforms

have a unique connection with consumers,

demonstrated through high engagement rates.

And social platforms themselves are realising

this. Earlier this year Pinterest reinstated the

use of afliate links: According to Business

Insider, the move was made in order to

reward its users and “incentivise inuencers to

generate more beautiful content”.

Establishing Afliate Partnerships with

these inuencers can be a fantastic way for

advertisers reach their audiences.

Mobile continues to dominate

Smartphone adaptation globally continues to

increase, seeing a year-on-year growth rate

of 21% in 2016 (admittedly a decease versus

31% increase in 2015, but mobile innovation

and commerce shows no signs of slowing

down). In fact mobile ad spend in US grew

66% in 2015, whilst desktop only grew 5%.

Thanks to innovation and the success of

Afliate Marketing, advertisers are well and

truly equipped to tackle the challenges mobile

presents. Technology, formats, tracking

and offers that carry the native legacy of

Afliate Marketing are all available on

mobile, continuing to drive success in mobile

optimised campaigns.

Marketers need only to look at the Asian

markets to see a clear depiction of just how

big mobile is, and how it will continue to

evolve. Messenger apps such as WeChat and

Kakao talk are among the most successful

platforms being used by Asian consumers.

With Facebook already optimising Messenger

for ecommerce, it’s an understatement to say

that this will be an interesting space to watch.

Conversion or purchase

Often consumers will nd a product,

before looking for some sort of offer.

A robust Afliate Program using a

wide range of publisher models takes

this into consideration. In the U.S.

market some of the largest and most

successful publishers are coupon

and deal sites, often providing the

nal incentive that is needed for a

conversion to happen.

Ongoing customer

engagement

Advertisers are leveraging Loyalty,

Cashback and Reward Afliates as a

means to maintain ongoing customer

loyalty and engagement. Aside from

providing a great product or service,

marketers need to consider the ‘why’:

Why should a consumer continue to

interact with your brand if they’re not

rewarded for continued support?

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK27

Video killed the Afliate star, or

did it?

Digital video is the fastest growing advertising

platform. In fact, the IAB recently reported an

85% increase in video ad spend in the U.S.

from 2014 to 2016.

The great thing to see here is that afliates

haven’t been left behind. There has been

an increase in the number of publishers

leveraging digital video. From shoppable

video ads, to short video product summaries

and reviews, even inuencers are riding the

wave with the rise of Vlogger community.

Again, with the innovation we are seeing

from publishers, afliate is well positioned to

leverage this growing trend.

Online-to-ofine and the role of

attribution

Technology will continue to shape the way in

which Afliate Programs grow and develop.

As more consumers adopt the use of multiple

devices and new technologies continue to

emerge, advertisers are searching for ways to

leverage digital and drive in-store sales.

With consumers blurring the lines between

online and ofine sales, Afliate Publishers

in Australia and overseas have been quick to

develop platforms that empower advertisers

to make the leap from online to ofine,

connecting with consumers at every stage

of the path to purchase. Some publishers

utilise beacon technologies, others provide

card-linked offers and some have developed

mobile coupons which require no integration

at the point of sale. And whilst Afliate

Marketing is leading the way in providing a

solution to the O2O challenge, the obstacle

now changes.

Multi-channel advertisers are faced with

the burgeoning question of where they

should be allocating budget. What digital

channels should they be investing in and

what technologies are really working to drive

conversions? Attribution is the answer to

many of these questions. The common trend

among Afliate Marketers is to determine the

value of afliate by the role it plays alongside

other digital and traditional media channels.

No two advertisers are the same, and a one-

size-ts all approach doesn’t necessarily work,

particularly with Afliate Marketing. Attribution

reveals where consumers are shopping, which

devices they’re using and also can be used to

uncover why consumers aren’t converting.

Therefore, as previously mentioned, the

Australian Afliate Industry is still in its infancy

but growing at a fast pace, largely thanks to

the adaption of advertisers and the innovation

of publishers. More Australian advertisers

and agencies will recognise the benets of

working with a low-risk, cost-effective channel

which provides a solution to the challenges

the modern marketer is facing in the modern

marketplace.

IAB AUSTRALIA AFFILIATE MARKETING HANDBOOK28

Advertiser This is the standard term for a company who has an Afliate Program.

Also known as 'merchant' and 'brand'.

Afliate Link This is also known as a text link or tracking link. This directs users from an

afliate site to a an Advertiser site.

Afliate Network Afliate Networks aggregate afliates and merchants into one place. They

also handle tracking and the payment of commissions.

Agency Agencies provide the management of an Afliate Program where the

Advertiser wishes to outsource it to an objective 3rd party.

Banner This are display media banners that some Publishers choose to add to

their sites.

Cashback Cashback sites return much of the commission they earn for driving a

sale back to their users as a reward for using the site. Cashback sites are

often signicant parts of Afliate Programs.

Commission This is the incentive provided to afliates for driving sales to a given

Advertiser. The commission can be in the form of a percentage of sale,

cost per click a at amount or bounty for reaching targets. See CPA, CPC

and CPL for more detail.

Content site Also known as a blog. These sites contain unique content around a given

subject and often command a loyal following.

Cookie The technology typically used to track user behaviour.

Cookie Period The length of time the tracking cookie will remain active on a user’s

browser.

Coupon This is a discount which is made available to shoppers and are typically a

series of letters of numbers.

Coupon Site Coupon sites (also known as Voucher Code sites) drive value by

incentivising users with coupons. They can be an effective means of

driving revenue.

CPA Cost Per Acquisition - the commission paid to a Publisher, typically for

driving a sale on an Advertiser's site.

CPC Cost Per Click - the commission paid to a Publisher for driving a click to

an Advertiser's site.

CPL Cost per lead. The commission paid to a Publisher in return for driving a

lead to an Advertiser's site. E.g. completing an enquiry form

Override This is the tracking fee charged by Afliate Networks for providing

tracking. It is usually based on a percentage of the commission amount.

Price Comparison These afliates comparing the prices of thousands of products, from

Insurance to food stuffs.

Product feed Also known as Merchandiser feed. Some afliates import the products

which Advertisers sell compare pricing.

Publisher Also known as an ‘Afliate’. Any website that is paid a commission for

driving a sale or generating a lead via an afliate link.

Tenancy The fee required to buy a piece of media on an afliate site or in an email

newsletter. These can vary considerably.

Validation Period The length of time from a transaction tracking place until the advertiser

approves its validity.

GLOSSARY