DIGITAL MARKETING 101: PPP
PAY PER PERFORMANCE
PPP programs are extensions of the sales force. Referral and Affiliate middleman between Merchant and Consumer with independent Networks to audit performance in the case of affiliates.
The difference between the two programs is that under a referral the lead is generated out of good will and honest love for your product from the referrer. These referrers come from the merchants active customer base and they love the product or service so much that they want to refer friends and family. Yes, they are rewarded for that sale but that is not their primary motivation.
MERCHANT(Brand) REFERRER(Current Customer) CONSUMER(New Customer)
Affiliates on the other hand work only as hard as your commissions ( unless cookie stuffing ) Think of these affiliates as independent contractors that increase the brand awareness, lead generation and ultimately revenue streams for free. These companies and entrepreneurs are selling the merchant's products and services using content sites, syndicated, comparison, coupon or promotional sites, bloggers and even virtual game currencies and niche directories with little risk to the merchant who only pays them if there's an actual sale made from their efforts. Sweet!!!
MERCHANT(Brand) NETWORK(Auditor) + PUBLISHER(Affiliate) CONSUMER(New Customer)
Now don't get me wrong there are still risks associated with these relationships, specially to the brand name, better business bureau standing and sales but for the most part if monitoring is in place understanding the publishers good and bad activities should be easy and the learning experience alone is worth the risk, never mind the increased traffic and sales potential.
A major risk known as "Cookie Stuffing" occurs when the publisher benefits from a merchant's customer during the check-out process on the shopping cart if the customer decides to search for "discount codes" or coupons. When they open a new browser window, Google "Discount Code" + the merchant's name and click on the links displayed, the landing pages launched set first party cookie values with the publisher's info. When the user returns to complete the sale already started, the publisher can take credit for the sale. The publishers are not entirely guilty since they are also using SEO, PPC and DISPLAY advertising to promote the merchants products but this and many other issues fuel distrust in the relationships between merchants and affiliates.
For this reason many merchants and affiliates simply choose to use an outside management company known as a network to be the middleman. CommissionJunction.com is one of the most successful even if they charge a flat fee of $500 a month or take 20-30% of affiliate payments from the merchants account because they resolve these conflicts. ( typically 4-20% of sale )
So how do you get started on these digital marketing options? The next 7 pages will explain both the analysis steps and the tools of the trade before you move on to the industry research portion and the sample industry highlighted in the second half of this publication.
