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 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)
Comparative shopping is a huge growth driver for online leads/commerce. & eBay have been able to scale up largely due to their Affiliate programmes. Huge monies are globally going on to comparison shopping / affiliate marketing. 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 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.

Sunday, June 10, 2007

Launched dgm India

I apologise for the long silence but I had been very busy setting up operations for dgm India.

dgm India, is part of dgm Holdings Plc. The Company's principal activity is the delivery of ROI through affiliate marketing, search engine marketing, display inventory and email, either as individual channels, or as a complete solution. Globally, dgm provides services to more than 250 blue-chip clients and agencies with over 100 staff. Utilising powerful software, dgm has the ability to trace a consumer's activity online to a specific advertisement placed on a specific channel. Therefore, regardless of the pricing model or channel used, dgm can report on the direct correlation between advertising spend and consumer response.

We formally launched dgm India on 6th June 2007. You can read more about the launch here:
Delhi Events

DD News

We have launched dgm India with 3 initial solutions:

dgm Performance: First credible & interntional Affiliate network in India.

dgm Search Lab: Cutting edge Search Marketing (PPC & SEO) solutions using state of the art Web Analytics & completely automated Bid Management & Optimisation tools that talk to the search engines through APIs.

dgmeMail: Our managed email solution system.

dgm's DNA is delivering better ROI to online advertisers using cutting edge technology, channels & solutions. We have been doing this for close to 8 years in markets like UK & Australia.

Seeing the state of Indian online advertising and the solutions that exist here, I am very sure that dgm India, with its superior solutions will be able to raise the bar significantly and will help in taking the online advertising to the next level.

More about the state of Indian online advertising in my next post.