Bài giảng E-Business and e-Commerce - Chapter 9: Affiliate Programs

Affiliate program A form of partnership in which a company pays affiliates (other companies or individuals) for prespecified actions taken by visitors who click-through from an affiliate site to a merchant site In this chapter, we discuss: Costs Benefits Program reward structures Program-building options Tracking and affiliate solution providers Directories and search engines that provide affiliate- and partnering-program resources

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Chapter 9, Affiliate ProgramsOutline 9.1 Introduction 9.2 How an Affiliate Program Works 9.3 Selecting an Affiliate-Program Reward Structure 9.3.1 Pay-Per-Click Model 9.3.2 Pay-Per-Lead Model 9.3.3 Pay-Per-Sale Model 9.3.4 Multi-Tiered Model 9.3.5 Hybrid Model 9.3.6 CPM (Cost-Per-Thousand Model 9.4 Attracting Affiliates 9.5 Monitoring An Affiliate Program 9.6 Affiliate Solution Providers 9.6.1 Commission Junction 9.6.2 LinkShare 9.6.3 Be Free 9.6.4 ClickTrade 9.6.5 PlugInGo.com 9.7 Web-site “Stickiness” Outline 9.8 Becoming an Affiliate 9.9 Examples of Affiliate Programs 9.10 Affiliate Program Examples By Industry 9.11 Costs and Taxation of Affiliate Programs 9.12 Affiliate-Program Directories and Search Engines Chapter 9, Affiliate Programs9.1 IntroductionAffiliate program A form of partnership in which a company pays affiliates (other companies or individuals) for prespecified actions taken by visitors who click-through from an affiliate site to a merchant siteIn this chapter, we discuss: CostsBenefits Program reward structures Program-building optionsTracking and affiliate solution providersDirectories and search engines that provide affiliate- and partnering-program resources9.2 How an Affiliate Program WorksNew income streamsMerchant The company that advertises on another company’s siteAffiliateThe company hosting the advertising in return for a reward based on predetermined termsAffiliates act as an extended sales forceHow it worksMerchant places banner on affiliate’s Web siteWhen a person clicks through to the merchant’s site via the advertisement on the affiliate’s site and makes a purchase, a commission on the sale is typically awarded to the affiliate “Win-win" situation9.3 Selecting an Affiliate-Program Reward StructureProgram reward structuresPay-per-clickPay-per-leadPay-per-sale CPM (cost-per-thousand) Multi-level, or multi-tieredHybrid modelImplementation of appropriate reward structure(s) depends on the type of site and its product mix9.3.1 Pay-Per-Click ModelPay-per-click model Rewards an affiliate for each click-through that is generated from a banner ad hosted by the affiliateA click-through is when a person clicks on the banner advertisement on the affiliate site and is taken to the merchant siteEasy for affiliates to generate dishonest click-throughs to “run up the numbers” Sites that depend on advertising rates use this model to increase traffic GoTo and Lycos9.3.2 Pay-Per-Lead ModelPay-per-lead modelRewards affiliates based on the number of qualified leads generatedPotential customers that have expressed interest in a product or service and meet requirements determined by the companyCan include new customer registrations and having visitors sign up to receive a newsletter or use a free demo Mailsweeps.com 9.3.3 Pay-Per-Sale ModelPay-per-sale modelAlso known as the commission-based modelCompensates its affiliates for each sale resulting from affiliate-hosted advertisementsRewards to the affiliates based on sales are typically largerexpress.com Virtual store Allows affiliates to sell merchant’s products without requiring visitor to leave the affiliate’s site 9.3.4 Multi-Tiered ModelMulti-tiered modelAlso known as the multi-level modelNew affiliates are recruited by current affiliates, who are then rewarded with a percentage of the new affiliates’ revenuesTwo-tiered model involves only the original affiliate and its recruits, also known as subaffiliatesValueClick9.3.5 Hybrid ModelHybrid modelCombines features of multiple modelsCan make an affiliate program more competitiveCan increase the cost for the merchantFreeShop.com9.3.6 CPM (Cost-Per-Thousand) ModelCPM (cost-per-thousand) model Requires the merchant to pay the affiliate a fee for every 1000 visitors that simply view the merchant’s banner on the affiliate siteNot used as often as the other models because merchants prefer to pay for actions CPM is often used to price traditional advertising methods9.4 Attracting AffiliatesGrow affiliate program and increase profitsTry posting announcements on message boardsNewsgroups Online discussion groupsSpamming and unwanted advertising are unwelcome and can against rulesDeja.comDirectory A site that provides aggregated information and links to sites relevant to specific topics Determine reward structures and commission amounts of competitors9.5 Monitoring An Affiliate ProgramUse tracking information To analyze effectiveness of programs, make improvements, monitor payment schedules and identify strongest affiliatesCreating tracking solutionsBy creating duplicates of every Web page, each affiliate can link to an individually assigned pageReferred visitors will click through to only the mirror page (the duplicate page) designated for that specific affiliate, allowing companies to record these visits separately Costs include time, hosting and updating mirror pages, payments, marketing, credit-card processing and customer service Affiliate program softwareAffiliateZone.com, My Affiliate Program and Pro-TRACK9.6 Affiliate Solution ProvidersAffiliate solution providers Companies that can provide end-to-end solutions for a company’s affiliate programRecruit affiliates and merchants to participate in programs, conduct accurate tracking, provide detailed reporting for merchants and affiliates and distribute commissions Fees may be required for affiliate solution services 9.6.1 Commission JunctionCommission Junction offers design, implementation and management services (B2B affiliations)No fee to become affiliate, merchants charged a feeApplication service is Web based Do not have to download or upgrade any software Instant tracking and reporting in real timeMakes monthly payments to affiliates for merchants EnContext solution Services to merchants include SmartMatch SmartTrack SmartZones SmartStats SmartServe SmartPay9.6.2 LinkShareLinkShare offers affiliate programs for B2B and B2CAffiliates can join pay-per-click, pay-per-lead and pay-per-sale programs for freeMerchants can use The LinkShare Network , a Private Label Network or a combination of the two to develop affiliate programsLinkShare Network provides merchants with access to companies that have become affiliates through LinkShareLinkShare Synergy Private Label Network allows merchants to sign up affiliates through their own Web sites 9.6.2 LinkShareLinkShare’s home page. (Courtesy of LinkShare Corporation.)9.6.3 Be FreeBe Free, Inc. BFAST (affiliate-program enabler)Allows companies to target affiliates in a segmented mannerRewards and compensation determined by the merchant Be Free tracks impressions, click-throughs and sales for both the merchant and its affiliate partnersBe Free records each time a promotion is viewed or acted uponWhen a sale is made, Be Free receives information through its connection with the merchant’s site Reporting.net is used to provide performance information9.6.3 Be FreeBe Free’s performance-marketing for page merchant. (Courtesy of Be Free, Inc.)9.6.3 Be FreeBe Free demonstration: How promotions work, step 1. (Courtesy of Be Free, Inc.)9.6.4 ClickTradeClickTrade is part of Microsoft bCentralWeb-based service provides tracking and payment servicesPay-per-lead, pay-per-sale or hybrid-model programMerchants have control over affiliate links and banners Charges 30 percent of any merchant payments to affiliates Companies can sign up to be affiliates for free Provides reports including tracking of affiliates 9.6.5 PlugInGo.comPlugInGo.com Affiliate Network Web-based solution for affiliate programs Affiliate Mail CenterOnline message boardsRewards members through PlugInGo Points that PayReports can be produced daily, weekly or monthlyPerforms payment-processing servicesCompanies can join as affiliates for free Charges one-time setup fee and a commission of two percent of every sale or lead made through the network9.7 Web-site “Stickiness”Stickiness of a site The ability to keep people at a site and interested in its content Update content frequently, carefully organize a site, provide quality customer service to keep visitors browsing Merchants can offer virtual stores to affiliatesOffer e-commerce capabilities to sites that want to participate in affiliate programs, but also want to keep visitors at their sitesNexchange and CrossCommerceCan control their brands’ presentation on affiliate sites9.7 Vstore.com FeatureVcommerce Corporation provides sites with store-hosting opportunities through vstore.com Manages credit-card transactions, order fulfillment, customer service and hosting of the storefrontProvides step-by-step process for design and implementation Select a category from the listed choicesSelect a subcategory to further concentrate on a particular marketChoose a store design, store colors and store typographyPersonalize store with a name, slogan and logo. Provide personal information such as e-mail address, name, phone number and commission payment information9.7 Vstore.com FeatureSample store from vstore.com. (Courtesy of Vcommerce Corporation.)9.8 Becoming an AffiliateLow barriers to entryUsually freeJoining too many programs may make the site look cluttered and unprofessionalIdentify a target marketSign up directly at the merchant’s site or join through an affiliate solution provider or affiliate directoryAdbility Offers information on various forms of marketing, including affiliate programs 9.8 Becoming an AffiliateAdbility’s specific segments within an industry. (Courtesy of Adbility.com.)9.8 Becoming an AffiliateAdbility’s listing of affiliate programs for books in the “general” segment. (Courtesy of Adbility.com.)9.8 Becoming an AffiliateSome programs have requirements to become an affiliate Site statistics, information about visitors and a tax identification numberHidden fees and restrictions in some affiliate contractsNote the reputation of the merchant Most affiliate programs require a person or company to have a Web site to participate Some programs allow individuals to join by placing affiliate links on their personal sites9.9 Examples of Affiliate ProgramsAmazon.com Associate Program Pioneer in affiliate marketingSites will be rejected if they contain “amazon” or variations of the word in the domain names, promote violence, are discriminatory or contain sexual material or other content deemed inappropriate Associates Central provides graphics, links, earnings and traffic information Affiliates can provide an Amazon.com search box on its site or link to the home page or recommended booksJoining is free and pays up to 15 percent in referral fees 9.9 Examples of Affiliate ProgramsBabyCenter offers a commission-based affiliate program Pays members for all sales originating from their sites Pays affiliates for their own personal shopping through the links on their sites Affiliates are paid on a quarterly basis BabyCenter Affiliate Gateway provides earning reports, images and links that can be downloaded to connect to the merchant site9.9 Barnes & Noble FeatureBarnes & Noble offers Affiliate Network Potential affiliates must complete online applicationGives options for links, banners and virtual storefrontsaffiliate.net provides affiliate performance reportsSends a commission check to affiliates every three monthsMyB&NLink program allows people to earn commissions by placing a link to the Web site in their e-mailsRestrictions include spamming, pornography, hate mail and illegal activities9.11 Costs and Taxation of Affiliate ProgramsCostsMerchant is required to pay the affiliate, with the amount depending on the prespecified terms of the programCosts can rise with increases in the number of click-throughs, purchases or other specified actionsLosing visitors through affiliate links Developing and implementing the programInternet affiliate program taxationCommissions collected by affiliates are considered income and will be taxedState taxation on sales made through affiliates in states other than the state where the merchant is located has not been settled9.12 Affiliate-Program Directories and Search EnginesAffiliate-program directories and search engines Provide parties who are interested in becoming affiliates with programs that match their interests, and parties who are interested in finding affiliates with the different options available to themAssociate-It, AssociatePrograms.com, Refer-it and AffiliateFind.com 9.12 Affiliate-Program Directories and Search EnginesAssociate-It’s home page (Courtesy of iSeed Inc.)