Affiliate Summit West 2007 : Opening Session

Looking back 3 years ago, Affiliate Summit started out as a small group of affiliates and merchants interested in growing the industry.  At the time there was a small annual conference of around 200 people who went on a boat from NY to Halifax, Canada.  It was quite a funny story actually – Jonathan Miller (ForgeBusiness), Eric Edelstein (incuBeta Co-Founder) & myself were 3 South Africans who went to New York on the expectations that our US Visa’s & South African passports would allow us to get into Canada (a commonwealth country), little did we know that the law had changed since 9/11.

We were stranded in New York and were not allowed onto the cruise ship by Carnival Cruises, but that didn’t stop us!  At about 6am in the middle of early spring, we headed down to the Canadian embassy and managed to get a 1 day Visa, headed over to JFK, boarded a flight to Halifax, spent the night at the Prince Georgian hotel (one of the best nights rest I ever had!).  We also had dinner at the Press Gang Club (a great restaurant)!  To cut a long story short – we boarded the boat back to New York at Halifax the next morning, and managed to enjoy half an Affiliate Summit.

This year, I’m pleasantly surprised to hear that there are over 2000 attendees – that’s 1000% growth in 3 years!  Well done to Shawn Collins & Missy Ward for running a fantastic that without a doubt fuels the growth in Affiliate Marketing globally.

The show starts with a funny opening from MC Lisa Riolo (formerly VP of Commission Junction).  Michael Sanchez, CEO of ClubMom (and CafeMom), takes the floor for the Keynote Address.

Michael kicks off with some personal anecdotes about his pay for performance experiences with his kids – very funny.

Potential Role of Affiliate Marketing in the Larger Marketing Landscape

What Web 2.0 Means to Marketers

Consumer is completely in control
Consumers want to create and interact with their media
If you don’t have a great product – GO HOME
Be absolutely crystal clear about your metrics
Do less, go fast, try stuff – repeat based on the numbers and what your  customer tells you.
Make sure the cost of learning and changing is low.

Marketing 101 – Obviously but so Important

Develop a great product that is an absolute wow for an identifiable segment of customers
Establish positioning, brand, segmentation, and value proposition.
Reach the RIGHT PERSON at the RIGHT TIME with the RIGHT MESSAGE.

Classic Marketing Funnel:

Awareness ->  Consideration -> Qualified Lead -> Transaction -> User Loyalty

SEM Analysis:

Strengths

Marketers can often reach the RIGHT PERSON at the RIGHT TIME – only paying when a consumer click
Marketers can calculate ROI and manage & adjust budget process in real time
Massive scale

Weaknesses

Marketers learn very little about most of the people clicking the ads (1% conversion means that 99% got away).

(He is going to fast for me to capture all this!!).

Affiliate Marketing Analysis

Strengths

Pay for Performance is the Holy Grail of Marketing
Marketers only pay when they receive a desired outcome

Weaknesses

Too often affiliates and marketers are not aligned on true metrics
Too often affiliates are not driving quality traffic – wrong incentives

ClubMom Grocery/Retail Loyalty Program

ClubMom delivered 10%+ sales lift and hundreds of millions of dollars in incremental sales – for than 5 years.  Retailers still did not like paying on all sales, despite huge, measurable ROI.

This talk reminds me a lot of the work we have published around Performance Marketing Profit Share.

CafeMom.com Current Analysis

CafeMom is a social netowork for moms to connect with friends – old and new, express themselves, and have fun.

New Member are averaging 100-200 pageviews / member (except one channel) – results in $25-$50 revenue per member per month.

Ideas and Recommendations – E-Commerce Marketers

Pay Per Sale

Align with sites that have loyal and engaged user bases
Find as many strong content / social networking / niche affiliates as possible
Pay for True Performance
Consider programs that involve affiliates post Sale

Pay Per Lead

(He is moving way to fast for me to catch up, because he is running out of time).

In short, all he is advocating is that we align merchant & affiliate interests better – interesting talk overall.

$1m Challenge – Mother’s Day Challenge

He wants to pay an affiliate or consortium of affiliates $1m by Mother’s Day – if they can deliver true performance.

He is looking for several affiliate partners to work with ClubMom on a 2-3 week test basis.  I’m sure there will be details on his site.

Conclusion:

Affiliate Marketing has breakthrough potential.
Think big and long-term
Maintain quality across the board
True Performance is the key
Test out a big program with CafeMom

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