Saturday, June 16, 2007

Affiliate Marketing

What is Affiliate Marketing?

In layman’s terms, affiliate marketing is: "web publishers/ affiliates generating registrations/ leads/ sales for merchants/advertisers, in return for a bounty / commission each time they do so".

Advertisers don’t buy this advertising, they simply pay them when people click through and perform the action specified by the Advertiser - sign up, transact, fill in a lead etc. Affiliate marketing networks like http://www.dgm-india.com/are the link between the merchants and affiliates, they provide the advertisers with technology and track end-to-end performance across various defined performance metrics / parameters like registrations, transactions, referrals, leads etc. while acting as a gateway to large numbers of individual affiliates / publishers. It also allows third party tracking and certification which is crucial when the quantum of referrals are huge.

Benefits of Affiliate Marketing to Advertisers / Merchants
  • Expand reach : More traffic > More registrations
  • Brand exposure: Free benefit, since you do not pay for advertising.
  • Drive revenue: Well-run affiliate programmes can generate terrific returns
  • Inform marketing activities: Learn from affiliates about what is working in terms of pricing, offers, products, propositions, landing pages … and what is not. For example, you can watch the best performing affiliates to see how they write their Google ads for the best response. These skilled practitioners can help you improve other areas of your business.
  • Reduce costs/financial risks: Affiliates offer merchants a virtual sales force without the need to worry about staff salaries, overheads, sick pay etc. The CPA (cost per action) performance model is very cost effective in this respect.
  • Measurability and accountability: Affiliate networks have lots of tools to help you track your campaigns. Combine this information with your web analytics and sales data to see the big picture and measure ROI.
  • Easy draw for merchants with good products but no monies to commit upfront.
Benefits to Publishers
  • Get an instant alternative monetising opportunity beyond Ad Sales & ad networks
  • Affiliate Marketing can act as a platform to drive in monies with unused inventory.
  • Cookies set up for 30,60 days ensure sales incentive for publishers
  • Complete control of merchants they wish to promote, unlike the situation of an Ad network.
Benefits to Consumers

Consumers use Internet to seek information about products - their features, pricing etc. Primary need of Internet Customers is 'comparison shopping' where buyers can see in “one-view” offers from multiple merchants for the same SKU/ product and then with a click proceed to buy the same.

This becomes easily possible for Web Publishers to achieve through the help of Affiliate Networks, since the networks pick up 'live feeds' of all products and services from Merchants. The Affiliates in turn pick up those feeds, aggregate & display them on their respective websites the way the consumers would want to see them. Few examples of top global affiliate sites:
  • Kelkoo (Yahoo shopping)
  • Shopping.com
  • PriceRunner.com
  • NextTag.com....
Comparative shopping is a huge growth driver for online leads/commerce. Amazon.com & eBay have been able to scale up largely due to their Affiliate programmes. Huge monies are globally going on to comparison shopping / affiliate marketing. http://www.moneysupermarket.co.uk/ is considered as the best comparative portal for Financial products and has become a Billion Dollar company in UK. .

e-commerce in India currently driven by Individual deals & bargains. Customers are exposed to a single proposition of a “Deal” at one point of time and hence they can respond to only specific stimuli. I fee that this can be one of the major reasons for the low commerce activities in India. The only exception is the 'Travel' category where we anyways see all online travel portal giving comparisons between various airlines, hotels etc.

Affiliate Marketing: Important channel for customer acquisition

Affiliate Marketing is globally becoming an indispensable channel for advertisers looking to acquire customers online. Globally, affiliate marketing already contributes to almost 25% of the online spends. Sample these:

  • Affiliates worldwide will earn $6.5 billion in bounty and commissions in 2006 [Source: Marketing Sherpa]
  • Market for UK affiliate marketing to grow to £2.16 billion: [Source: E-consultancy – October 11th, 2006]
  • UK market for this marketing segment will record a growth of 60% this year to about £2.16 billion, compared to the £1.35 billion in 2005 [Source: Traffic Junction – October 11th, 2006]

Affiliate Marketing in India

Start has been made by http://www.dgm-india.com/ by being the first credible Affiliate network in India. I expect over a period of next 18-24 months Affiliate Marketing becoming a very important channel for online customer acquisition and contributing to almost 10% of online advertising.

21 comments:

Madhur Khandelwal said...

Hi Anurag,

Very informative post. I truly believe that ecommerce in India will pick up steam once we have a good affiliate marketing aggregators like ChannelAdvisor, CommissionJunction, LinkShare. I hope dgm India blazes that trail in India, esp. for the comparison shopping to gain traction and hence drive ecommerce sales by providing a real value for shopping online.

I had some thoughts on a very similar topic at sometime back at http://ileher.com/2007/03/08/comparison-shopping-in-india-current-state-and-whats-in-future/

Nilesh Sardar said...

Hello Mr. Anurag,

How long do you think, it would take dgm-india to have a credible network of say around 500 india- focussed websites?
The reason i am asking this is that we will be going online with our retailing business in 6 weeks (the website development is almost complete, we are in the process of uploading items and data) and have been advised by a few people to consider affiliate marketing to generate traffic. Though we like the idea, we still don't know, how to go about it.

Do you have any contact person in Mumbai whom we can explain our business and may be work out a way of working with dgm-india.

And i hope dgm-india would be focussed on indian ventures and not give the second grade treatment to indian ventures that most of the companies involved in outsourcing businesses are doing.

Look forward to your response.

Regards,
Nilesh Sardar
nilesh(dot)sardar(at)gmail(dot)com

Praveen Modi said...

Anurag,

Great post! I have always been a firm believer in affiliate marketing. We were the first one in India to start a online shopping deals aggregators website.

dgm-india affiliate marketing networks is great start and I am sure many more companies will follow. Today I signed up for your affiliate program :-)

Cheers
Praveen
www.allindiadeals.com
www.comparebazaar.com(alpha)

Anurag Gupta said...

Thanks Madhur, Nilesh & Praveen.

Madhur - We would definitely like to blaze the Affiliate trail in India.

Nilesh - In the 20 days since our launch we already have more than 150 websites on our Affiliate network with more than a dozen joining every day. We expect that in 3 months we will have 2-3000 Affiliate sites. You can speak with me for the time being at anurag.gupta(at)dgm-india(dot)com, we shall be happy to work with you and yes we are an India focussed network.

Thanks Praveen for signing up, we are in the process of getting more merchants on our network - they are currently under integration. You can expect to see lot of action on dgm-india.

Praveen Kodur said...

Hi Aurag,

Great Post on Affiliate Marketing, Very informative and insightful...

Also, DGM is into Search Engine Marketing, analytics, & other related areas. Looking forward to reading posts on those topics as well.

Imran Jankhwala said...

Hi Anurag,

Very good post, I believe that affiliate marketing is picking up in the world. It is a best source for online promotion and brand building for any business unit or strategical business unit. I have few posts on my blog related to affiliate marketing on http://affiliatemarketinginindia.blogspot.com

Anonymous said...

Yes. Affiliate marketing has become a lucrative career and we will see further growth with expansion of internet community.
www.implantingideas.com

LifeofEgypt said...

Remember that the internet is global. You can have affiliates around the world...

Marketing Firm said...

Well said ..The number of people doing online jobs is increasing day by day in india. They dont even know their employer but earning money. These jobs include pay per click, typing jobs, etc.Comming to your concern of getting registered for an online business, an average indian is not so aware of online business opportunities. For example, highly qualified software engineers are running after the silly online jobs, than starting their own online business. The simplest business would be to take distributor ship and start selling them online.

Andy MobileChecker said...

Interesting post.

I am in the process of applying to dgm to explore the Indian affiliate market.

Our site www.MobileChecker.com already gets a lot of Indian traffic so it would be good to put this to better use!

Andy

Jdan said...

Hello Anurag,

I highly appreciate your contribution to the newbies. I would be glad if you could kindly provide me some help regarding legal requirements to set up an internet business. Where could i get some information without consulting a corporate lawyer at the first place. Its about an online money making business.

Manish said...

Appreciate the work. We have recently launched a portal http://www.theofferdirectory,com, exclusively for retail offers, from the retail stores and online sites. And we are keenly looking forward to this kind of affiliate networks. Hope it works out for us.

Manish

Manish said...

Appreciate the work. We have recently launched a portal http://www.theofferdirectory.com, exclusively for retail offers, from the retail stores and online sites. And we are keenly looking forward to this kind of affiliate networks. Hope it works out for us.

Manish

par said...

Hi Anurag,
I read your postings and I must they are quite informative. I am a consultant based out of Hyderabad and am currently working on an assigment from GOOGLE india to look for a Marketing Head for India. Incase this interests you please do send me a mail at continuumcareers@yahoo.co.in

regards
Parvez

jyothirmayee said...

Hi Anurag,
We have a retail store. We have significant traffic from both US and India. We have been successfully able to tie up with the 3-4 huge affiliate networks which cover most of US retail stores of interest. I am here referring to CJ, linkshare,amazon associates, shopping.com etc

Now as compared to US affiliates I see the affiliate business in India is just not there. I looked dgmindia, indiatimes,123plaza and whatever appeared as my search result.

Definitely we cannot compare the well stable networks but still some basic facilities are missing over here. There are no product based query I can make, no feeds either. We would really want to support India prices on our site asap. However the unavailability of a good price aggregator with a commission model has been a blocker. I am eager to here your view.

Ajay Parmar said...

Hi Anurag,

Any company which offers private labeled partnership for online business in India? Also if you can highlight about private labeled or co-branded affiliate solutions? I am a veteran affiliate marketer, got my first affiliate check from Commission Junction in 2003, till the time it has changed like anything

Joseph said...

Hi Anurag,

This is one of the most thorough aritcle online about affiliate marketing. I've really enjoyed reading it and learned so much from it.

It's funny I found your blog which is about affiliate marketing because I've just launched a video product with Michael Cheney to teach people to make a living from affilite marketing. Can you believe it? What a coincidence, eh?

Anyway, thanks for your article. I'll visit again soon.

Warm Regards,
Joseph Park
Affiliate Marketing

Affiliate Marketing said...

Great article for affiliate marketing. Its something everyone can truly benefit from no matter where you are in the world!

Subrahmanyam said...

Hi Anurag,

I am impressed with your article and background. I got interested in Affiliate Mrketing in India. Please let me know whether this will also work like MLMs?

Also let me know how can you help me?

Can u please mail me with details at avks2005@gmail.com.

Thanks you very much,
Subbu

SUSHMA said...

Hi,

Great Aricle to read on. Recently i have visited a sitw which deals on traineing for Afflaite business.They have extensive kit also providing online traning and giving suport. you can find they at http://www.ecashdeals.com

Jayanti said...

Great Post Indeed.There was another affiliate company named affiliate curry in India.But for some reasons best known to them the company still is in its infancy.I am in affiliate marketing since some years past.I believe you will be able to build a reputed affiliate company like cj or clickbank with in a very short span of time.
Jayanti
http://ejobs2day.webs.com