Affiliate marketing
Affiliate systems ( Engl. Affiliate "affiliate") are Internet-based distribution modes in which (usually a commercial provider of English. Merchant or Advertiser) its distribution partners ( Engl. Affiliates or publishers) commissions offered. The product provider provides advertising material that the affiliate uses on his website or can use through other channels such as keyword advertising or email marketing .
functionality
Affiliate systems are based on the commission commission principle. The technical basis in the virtual world of the World Wide Web is the link . Such an affiliate link contains a special code that uniquely identifies the affiliate with the merchant. In simplified terms, this means that the retailer recognizes who sent the customer through the link with the partner ID. Depending on the business model, a commission is calculated for the pure clicks on the advertising material (" Click "), the transfer of qualified customer contacts (" Lead ") or the sale ("Sale"). In contrast to the merchant (literally: dealer ; here also program provider or operator), who offers goods or services , the affiliate only functions as an interface between the dealer and potential customers.
So if someone clicks on such an affiliate link, they will be redirected to the page of the relevant retailer. Here, parameters are transmitted that enable a publisher to specifically allocate the generated sales. This method is called tracking . Cookie tracking enables a visitor to be assigned and tracked using a cookie. The cookie stored on the visitor's hard drive enables subsequent recognition and tracking (even in the case of delayed and interrupted interactivity). Tracking using cookies is the most widely used method in affiliate marketing in order to be able to assign a person to the corresponding affiliate.
With affiliate marketing systems in online cooperation management , companies market their products and services by linking them to partner websites. Commissions are often paid for sales generated or measurable success. This can represent an advantage for the product provider, but also a disadvantage for the provider of the advertising space, since the business risk of the product provider is transferred to a not insignificant part to the advertising space provider depending on the choice of the condition model. Since the inventory at the advertising space provider cannot be increased indefinitely, he will consider beforehand which affiliate program he expects the best results with. This creates pressure for the product provider to find a fair billing model.
Affiliate marketing can in principle also be implemented without the Internet ("offline"). This can be done using printed vouchers that contain a code to identify the publishers. The remuneration takes place either as pay per lead or pay per sale . The rest of the process is usually done online again.
Types of participants
Affiliate System Operator
The affiliate system operator is responsible for the provision and operation of the portal. He is supposed to guarantee the error-free operation and is responsible for the marketing of the portal. In reality, a distinction is made between two types of operators: On the one hand, independent platforms, the affiliate networks , have been established, which act as an interface between dealers (merchants) and sales partners (affiliates). These are primarily responsible for the provision and administration of the technology and financial processing. On the other hand, platforms can be found within which the retailer can take over the operator function himself (so-called "in-house programs"). These partner programs operated by the retailers themselves hardly play a role in the German market. In donation marketing, the commission is paid to a registered organization.
Dealer
Dealers, i.e. advertisers and merchants, make their products and services offered online available via the affiliate system and enable the affiliated sales partners to market the goods via their websites. The sales partners (affiliates, publishers) are provided with free advertising material, which they use as design elements on their website and which they can use to advertise (for e-mail publishers ) by e-mail. If the sales partner achieves success (through a sale, a registration, a website visit), the dealer calculates the commission set in advance for the respective type of sales and pays this out in accordance with the respective contract. In Germany, for example, Amazon only pays out a minimum amount of 10 euros.
Distribution partner
Sales partners (publishers, affiliates) use the affiliate system to cooperate with the associated shop operators (dealers). You can also benefit from selling the products advertised on your own websites.
Condition models
Pay per click
Here the commission is calculated for each click on the ad . The billing of sponsored links, advertisements above and below the search results, such as with Google AdWords or Yahoo! Search Marketing is calculated according to this model. Various techniques such as IP blocking prevent multiple clicks from a single user.
The problem with this form of payment for the operator of the affiliate system is the fact that it is difficult to influence the quality of the forwarded visitor flows, since, unlike the following payment models, there are no minimum requirements for certain visitor actions. Pay-per-click provisioning is therefore usually used for short-term advertising campaigns purely to increase the reach that cannot be directly linked to the purchase or sale of products.
The abbreviation EPC stands for “earnings per 100 clicks” and shows how much commission an advertiser pays out to his website operator (affiliates) on average for 100 clicks. The terms “Pay per Click” (PPC) and Cost per Click (CPC) are often used synonymously, whereby PPC actually describes the process as such and CPC stands for the price per single click. Alternative billing models are “cost per order” (CPO), “cost per action” (CPA), “cost per lead” (CPL) or “thousand contact price” (TKP).
Pay per lead
The commission is calculated for each contact made by the customer, for example when the customer requests advertising material. Pay per lead is particularly suitable for the online marketing of advice-intensive goods. Products that are complex in terms of content are rarely ordered by customers online without detailed advice, which is why a “pay per sale” remuneration can be ruled out, as it is not possible to assign a good ordered offline to the respective agent. The advantage of “pay per lead” over “pay per click”, however, is the sales partner's remuneration linked to the campaign. Only high quality traffic is actually paid for.
Pay per sale
The commission is paid as soon as the customer generates sales . Usually this means the sale (English: sale) of goods or services to the customer. Originally, the remuneration per sale was a one-off payment on a mediated turnover. In order to bind sales partners more closely to their own system, some affiliate programs are changing over to not assigning the individual turnover, but all of a customer's turnover to the respective advertising partner and accordingly to be paid, either within a period of time after the click (usually 30 to 90 days) or “lifetime” (for life, as long as the customer keeps buying or generating sales). “Lifetime” systems of this type are currently found almost exclusively in the adult affiliate segment (affiliate programs with mostly pornographic or erotic content). This can largely be attributed to the strong competition from affiliate systems on offer and the fact that customers usually read reviews on the product before making a purchase or use price comparisons and only order later.
Lifetime compensation
Lifetime remuneration is usually a combination of the pay per sale model with other promotions, for example in which a publisher (affiliate) is charged a further fee for each additional purchase made by the referred end customer. In most practical cases, a pro rata commission is then paid on the long-term, "lifelong" shopping basket of the referred customer (since his / her first registration in a shop system).
Airtime compensation
Airtime remuneration has been specially developed for the telecommunications sector and gives the publisher a commission for every minute of conversation paid by the end customer, for example for a mobile phone contract, over a certain period of time. Often there is this condition model in connection with a lifetime remuneration .
Other models
For some models, various actions are included in the calculations:
- Pay per Click Out: The referenced visitor must click on a provider listed there on the retailer's website or on another page of the sponsor (“click out”). Only then is this taken into account for the calculation of the commission. This is intended to reduce the disadvantages of pure “pay per click”, also known as “pay per active”.
- Pay per link: Only the display of the link on the affiliate's website is counted and taken into account. However, this option only pays off if it results in further campaigns and is therefore only available from a few providers. As a rule, this technical option is therefore contractually bound to further actions by the customer.
- Pay per print out: With terminals and coupon machines that are controlled via the Internet, the paper printout can be paid for. The remuneration designation or billing designation are “cost per print” and “cost per print out”. Nowadays, this application is only found with a few providers.
- Pay per view: Every tracked (rated) delivery of an advertising medium is remunerated, i.e. the frequency with which an advertising banner is viewed is counted and the website operator is then rewarded. Since this method has not proven to be very effective in recent years, the pop-up function is increasingly used.
- Pay per SignUp: Similar to “Pay Per Lead”, payment is only made here if the referred visitor registers on the retailer's website. Pay per SignUp is therefore a sub-category of Pay per Lead.
- Pay per Install : Here, the (first) installation of software on a computer is paid for, for example toolbars or demo versions.
Influence of the condition model on the company's success
Affiliate System Operator
The transition between click, lead and sale commissions is fluid. Affiliate systems often offer combinations of the above-mentioned remuneration models, such as remuneration per click and additionally per sale . In addition to other strategic marketing influencing factors, this mostly takes place with the aim of generating the highest possible level of attention among potential customers (community) within extensive affiliate networks with a large number of affiliated sales partners. The choice of the remuneration model and the amount of the remuneration are a decisive factor influencing the placement of the products on the sales partner's websites.
Distribution partner
Depending on the choice of the compensation model by the affiliate system operator, possible marketing strategies are derived for the affiliate. Payment per click (i.e. per referred website visitor) offers the possibility, for example, of booking cheaper traffic in search engines and forwarding it to the target website ( arbitrage ). In this case, the partner provides his service through the effective selection of search terms and permanent monitoring of the term portfolio . In contrast to pay-per-click , the affiliate uses the pay-per-sale remuneration positive effects on the long-term predictability of his company's success, for example if these are associated with permanent remuneration on the sales of the customers he has recruited.
Studies and events
The most important thing in affiliate marketing is the success rate. In recent years, more and more studies in this area have emphasized that it is important how something is received by the customer and what benefits arise from it for the provider. Affiliate marketing has also manifested itself in the area of vouchers. Vouchers have become more and more common in recent years. They can not only be found in mailboxes and mail folders, but are also often enclosed in parcels. In order to be able to prove the relevance and the range of the vouchers, studies in these areas are essential.
The range of vouchers is achieved through the high level of transmission. However, this does not yet determine the relevance. The relevance of a voucher only comes into play when the customer redeems it. The so-called watering can principle has always been in the foreground, but this has already been replaced by numerous other methods that are far more effective. Affiliate programs also support the relevance. If the manufacturer can only make a profit by redeeming a voucher and not already by sending it, more attention is paid to the attractiveness of the voucher. Only if the customer's interest can be increased will the voucher gain relevance. With this method, not only the manufacturer himself can be seen as the winner, but also the customer who benefits from a price reduction on his purchase, receives another discount or takes part in a special offer. Customers don't feel cheated by relevant vouchers, but see them as a small reward for a purchase made. If vouchers are highly relevant, the manufacturer's image also rises because the customer is satisfied.
The more the image of a company increases, the higher the rate of redemption of the vouchers will be. Vouchers have recently been offered more and more on the Internet, as shopping has simply shifted more and more to the online area in recent years. Vouchers had to be criticized again and again, but studies have shown that 90 percent of Germans redeem their vouchers. Especially through affiliate systems and the new technology, vouchers have been brought back to life and quickly got rid of their bad reputation. According to studies, there are a few reasons for customers not to redeem vouchers:
- The sender does not seem to be trustworthy.
- The minimum order value for redeeming the voucher is very high, so that the offer does not appear attractive overall.
- Vouchers can only be redeemed by new customers and not by loyal existing customers.
Central events for affiliate marketing experts are the annual Affiliate Tactixx in Munich and the a4uexpo , which took place in Berlin in 2014.
Liability issues
Affiliate programs have been the subject of legal disputes several times. In most cases, the question was whether the advertiser (merchant) could be held liable for infringements by his publishers (affiliates). The courts almost unanimously assumed that the affiliate is an “agent” of the retailer, for example within the meaning of Section 8 (2) UWG . Accordingly, a company is also liable for legal violations committed by employees or agents. There are similar regulations in other legal provisions, for example in trademark law (§ 14 Paragraph 7, § 15 Paragraph 6 MarkenG) or in copyright law (§ 100 UrhG): “Agent” in the sense of these regulations is someone who does not have an employee , works in or for someone else's company based on a contractual or other relationship. It is irrelevant whether there is a direct contractual relationship between the affiliate and the dealer or whether an affiliate network concludes contracts with both parties. Contractual exclusions of liability also have no effect on liability towards third parties. Rather, they are an indication that the advertiser can influence the behavior of the publisher, for example with contractual penalties or contract termination. In addition to agent liability, the dealer can also be held liable as a disruptor .
Individual evidence
- ↑ Erwin Lammenett : Practical Knowledge of Online Marketing . GWV Fachverlage GmbH, Wiesbaden 2006, p. 23ff., ISBN 978-3-8349-0273-3
- ↑ Affiliate marketing in the print sector: Affiliprint makes advertising measurable
- ↑ OLG Frankfurt 6 U 130 02 ( Memento from July 16, 2007 in the Internet Archive )
- ↑ Agent liability of the merchant for his affiliate
- ↑ OLG Koeln Az. 6 U 14907
- ↑ http://www.suchmaschinen-und-recht.de/urteile/Kammergericht-Berlin-20060818.html
