What Is Affiliate Marketing?

What is Afﬁliate Marketing?

Page 1 Table of Contents

INTRODUCTION ...... PAGE 1

1 / WHAT IS AFFILIATE MARKETING? ...... PAGE 3 1.1 / HOW AFFILIATE MARKETING WORKS ...... PAGE 6 1.2 / BENEFITS OF AFFILIATE MARKETING ...... PAGE 7

2 / ELEMENTS OF AN AFFILIATE PROGRAM ...... PAGE 11 2.1 / MANAGEMENT ...... PAGE 13 2.2 / PLATFORM ...... PAGE 17 2.2.1 / HASOFFERS ...... PAGE 19 2.2.2 / CAKE ...... PAGE 19 2.2.3 / HITPATH ...... PAGE 19 2.2.4 / POST AFFILIATE PRO ...... PAGE 19 2.2.5 / AFFILIATE WIZ ...... PAGE 19 2.3 / CREATIVES ...... PAGE 22 2.4 / COMMISSION ...... PAGE 25 2.4.1 / LEADS ...... PAGE 27 2.4.2 / SALES ...... PAGE 28 2.4.3 / APP INSTALLS ...... PAGE 30 2.5 / PROVEN OFFER ...... PAGE 33

3 / AFFILIATES ...... PAGE 36

4 / IN-HOUSE VS AFFILIATE NETWORK ...... PAGE 39 4.1 / IN-HOUSE ...... PAGE 42 4.2 / AFFILIATE NETWORK ...... PAGE 44

CONCLUSION ...... PAGE 46

2 Introduction

Do you know what it takes to run a successful aﬃliate program?

The majority of advertisers, product owners, and merchants search the internet high and low for new ideas and methods to promote their brand, and build new customers.

Aﬃliate Marketing is often thought about, yet not quite understood.

You research the beneﬁts of Aﬃliate Marketing, yet you’re left with unanswered questions, and may feel anxiety placing your brand with another company.

The goal of this white paper is to help you understand Aﬃliate Marketing.

The ups, the downs, the pros, the cons, the information needed to make an educated decision introducing your brand to a billion dollar industry.

Page 1 3 There are four sections included in this Aﬃliate Marketing white paper.

First, the foundation (the building blocks) of an affiliate program, leading into traffic sources, and ending with the pros and cons of an in-house affiliate program.

There is ten years of experience jam-packed into this white paper.

From being an affiliate network (NAMoffers) owner, to being in the trenches with 500+ affiliate programs, analyzing data, eating, sleeping, and breathing the Internet.

Enough said… scroll down, and get your butt into the ﬁrst section!

Page 2 4 What is Afﬁliate Marketing?

What is the ﬁrst thing that comes to mind when you think about Aﬃliate Marketing?

Many start with horror stories, which is natural for a technology based industry, and those who need more information — every industry in the world has horror stories.

Others start with success stories of advertisers tripling their customers.

You may soon have a new perspective on the strength of Aﬃliate Marketing.

Aﬃliate Marketing is evolving, and there is billions of people coming online.

The ﬁrst aﬃliate networks started in the late 90’s, pushing uncharted waters, all while learning how to create the technology, and infrastructure to create a new economy.

Page 3 5 Check out a couple deﬁnitions for Aﬃliate Marketing below:

1) “Affiliate marketing is a type of performance-based marketing in which business rewards one or more affiliates for each visitor or customer brought by the affiliate’s own marketing efforts” - Wikipedia

2) “A way for a company to sell its products or services by signing up individuals or companies (“affiliates”) who market the company’s product for a commission” - Entrepreneur

In layman terms, the advertiser, or merchant only pays a person or website (aﬃliate) who creates a new lead, sale, or most recently app install to your business.

Page 4 6 BUSINESS MODELS AVAILABLE IN AFFILIATE MARKETING

CPA Advertiser pays for a completed sale - ﬂat rate: $40 / sale CPL Advertisers pay for a lead - email, address, phone, and/or custom questions CPS Advertiser pays for a completed sale - percentage of sale: 5% / sale CPI Advertiser pays for an app install - android & iOS CPD Advertiser pays for a download - desktop toolbar or browser extension PPC Advertiser pays for calls that meet the required call duration

Page 5 How Afﬁliate Marketing Works

Page 6 Beneﬁts of Afﬁliate Marketing

How many beneﬁts can you think of for Aﬃliate Marketing?

There is the obvious benefit… advertisers compensate affiliates on a performance basis, meaning affiliates only get paid when a new customer is referred.

There is plenty of reasons to get excited for both parties!

There is the opportunity for an advertiser to get customers, and there is an opportunity for aﬃliates to create a part time or full time income promoting products online.

Take a look at the mind-boggling facts on Aﬃliate Marketing below:

Page 7 FACT 1 Advertisers will spend $4.5 billion dollars on Aﬃliate Marketing by early 2016. source

FACT 2 The digital channel will spend $52.8 billion, and television $79 billion source

Take a moment to think about those numbers.

Page 8 Aﬃliate Marketing accounts for approximately 8.5% (4.5 / 52.8) of total advertiser spends online, and is equivalent to 5.7% (4.5 / 79) of total television advertiser spends.

This may be a opportunity to get ahead of the competition dressed as a white paper.

NAMoffers screens all affiliates.

This includes a phone call, screenshots of earnings from other

affiliate programs, traffic source screenshots, valid id, tax forms,

and payment details.

It's not an overnight success; however, the Internet, and Aﬃliate Marketing is growing quickly. There is literally billions of people available for you to tap into.

Below is a list of key benefits on why you want your brand involved with Affiliate Marketing. Think about how you can begin reaping these benefits immediately.

Page 9 ★ Aﬃliate Marketing advertisers only pay for veriﬁed leads, and/or sales. In other forms of marketing the fees are paid in advance and there is no guaranteed results.

★ Aﬃliate Marketing enables an advertiser to tap into many diﬀerent online mediums, including: social media, blogs, email marketing, display ads, mobile, etc.

★ Aﬃliate Marketing breeds innovation and creativity. Since aﬃliates are only paid a commission when a lead or sale is created, they must be creative marketers.

★ Aﬃliate Marketing opens your brand to the latest and greatest marketing trends, and methods that your company may not have the time or resources to test out.

★ Affiliate Marketing provides you with an army of affiliates who are capable of reaching every corner of the Internet - tapping into specific niches, groups, and target markets.

★ Aﬃliate Marketing is measurable, every click, lead, sale is tracked in an online software that provides 24/7 real time stats. Breakdown your ROI 365 days of the year.

Get your brand or product involved in Affiliate Marketing!

Page 10 Elements of an Afﬁliate Program

Do you know where to start when developing an affiliate program?

The idea of Aﬃliate Marketing is easy to grasp - advertisers compensate blogs, coupon sites, marketers, and aﬃliates each time a new sale is created for their product.

NAMoffers is experienced working with over

300 affiliate programs in twenty different niches,

and in over 30 countries around the world.

Page 11 The biggest challenges for brands, merchants, and product owners is setting up a profitable, sustainable affiliate program that attracts affiliates, rather than frustrates them.

Keyword: frustrates.

To understand an aﬃliate, you must go through the processes of setting up campaigns, creating sales, reviewing return on investments, and managing campaigns.

It may take years to master Aﬃliate Marketing - market research, building landing pages, driving traﬃc, managing campaigns, optimizing, among many things.

Putting effort into your affiliate channel pays 10X on your investment!

Page 12 This white paper combines the perspectives of both advertiser, affiliate, and affiliate network, creating an “insiders scoop” of Affiliate Marketing.

Now, let's tune into the 5 MUST HAVE ELEMENTS to running an aﬃliate program:

1) AFFILIATE MANAGEMENT

Did you know aﬃliates have access to ad space on the most visited websites?

Facebook, Google, LinkedIn, Pinterest, among many of the most popular websites include aﬃliate ads - people generating a living from creating sales for product owners.

Aﬃliate Management used to be bloggers, comparison shopping sites, and organic SEO sites; however in 2015 people around the world are becoming online marketers.

Page 13 Average people have access to the advertising tools only big brands had access to previously oﬄine, enabling anyone to place ads on Facebook, Google, etc.

There is also a small group manipulating the developing infrastructure.

Meaning people are generating an income using credit card theft, email spam, self generated conversions,and many other forms of suspicious behavior.

Page 14 Aﬃliate Management requires years of experience, and a dedicated person to monitor.

The person(s) monitoring your aﬃliate program is called an Aﬃliate Manager.

NAMoffers screens all affiliates.

Screening includes: screenshots of earnings from other affiliate

programs, traffic source screenshots, valid id, tax forms,

and payment details.

Having a professional reduces risk, and increases results.

Page 15 Below is two options for ﬁnding an Aﬃliate Manager:

1) You create a new position in your company, and hire a suitable candidate

2) You hire an outsource program manager (OPM) — a 3rd party to manage aﬃliate program — the recruitment, communication, and management of aﬃliates

Think about having 100 or 1000 aﬃliates - what does that look like?

Questions about Affiliate Management?

Page 16 2) AFFILIATE TRACKING SOFTWARE

Do you know which aﬃliate software makes the most sense for your product?

Your decision may depend on monthly expenses, number of employees, or features.

An aﬃliate tracking software allows you to track every click, lead, and sale in real time.

The process involves aﬃliate tracking links, cookies, pixels, and consumers purchasing. Its simple, yet complicated, and best learned by getting your feet wet.

Affiliates login to the affiliate tracking software to collect affiliate tracking links, download banners, email creatives, and review campaign details & accepted traffic sources.

Page 17 Affiliates send traffic to their affiliate link — serve the right message, at the right time, and with the right emotional hooks, and voila!… a consumer makes a purchase.

Since the affiliate is using an affiliate link from your affiliate tracking software, the sale is recorded in your software, and you know exactly which affiliate to pay, and how much.

Page 18 It simpliﬁes business, and makes creating an aﬃliate program possible.

Below is a list of ﬁve “top rated” tracking softwares used by 1000’s of advertisers around the world - schedule a free demo to see which software is right for you.

1) HasOffers 2) CAKE 3) Hitpath 4) Post Affiliate Pro 5) AffiliateWiz

HasOffers, CAKE, and Hitpath are well known by large advertisers; whereas, Post Affiliate Pro and AffiliateWiz are used by small business owners, and those testing the waters.

Page 19 There is another way to go..., and that is to forget the aﬃliate tracking software, and outsource your aﬃliate program to an experienced team of professional marketers.

Get access to a team who handles the heavy lifting (seen below) for zero upfront money!

• Affiliate Recruitment • Affiliate Screening • Affiliate Communications • Affiliate Management • Affiliate Compliance • Affiliate Payments

Page 20 NAMoffers provides Affiliate Management

and Tracking at no extra cost.

There may be a setup and/or monthly fee in the future, as aﬃliate marketing continues to evolve, and become an everyday topic discussed among the general public.

Timing is everything when it comes to Aﬃliate Marketing in 2016.

LEARN MORE HERE

Page 21 3) ADVERTISING CREATIVES

How many creatives do you think an aﬃliate wants for a campaign?

Creatives include: banners on websites, sponsored ads on Facebook, email templates, landing pages, and the text ads found in search results on Google.

Many advertisers overlook the importance of testing a variety of creatives.

Testing a variety of ads is important. The results of your testings help deﬁne the message you want to use when attracting customers to your business.

Before testing you conduct market research on your target market(s).

You deﬁne their age, gender, the books they read, the movies they watch, the feelings their personality type experiences in circumstances related to your product.

Page 22 Learn what emotional hooks prequalify your customers to buy.

Discover which banners get more clicks, and which generate more revenue.

Affiliates invest their hard earned money into affiliates campaigns, and affiliate program must be tested — the landing pages, the banner ads, email creative, everything.

When you provide insights to aﬃliates, the aﬃliate immediately knows you mean business, and is ready to invest money into building your business for a commission.

Page 23 The amount of excuses big and small aﬃliate programs come up with when an aﬃliate network asks why there is only 1 set of banners, and 2 email creatives.

It's not because advertisers are lazy…

It’s often the lack of importance placed on testing a diverse set of creatives, and ensuring the people investing in your business feel it's a win/win situation.

Having good creatives sets you apart from the competition, and makes life easier…

Wondering how many advertising creatives is enough?

Page 24 4) COMMISSION

Do you know how to ﬁgure out a satisfactory commission to pay aﬃliates?

A good starting point is to decide if you’re looking for leads, sales, or mobile app installs.

Once you deﬁne the goal of your aﬃliate program the picture becomes clearer.

The next step is to reverse engineer your business - calculate your margins by comparing the costs to gain a new customer vs. the proﬁts a customer creates.

If margins are tight, you need to optimize your funnel to increase the lifetime value of your customer, as you need margins to pay aﬃliate commissions.

Page 25 Affiliates pay attention to affiliate programs with competitive commissions, frequent payments, and those open to negotiating commissions based on traffic quality.

Below is 3 methods to discover a satisfactory commission for aﬃliates.

Page 26 1) LEADS

How many leads on average does it take to create one sale for your product?

Let’s say, it takes 20 leads to create 1 sale.

1 sale = $40 of NET proﬁt.

Take the total proﬁt, and divide by the total amount of leads it takes to create 1 sale.

$40 divided by 20 = $2 / lead

The maximum you can pay before going in the negative is $2 / lead to aﬃliates.

It's the advertiser’s responsibility to create additional revenue on the backend (follow ups & retargeting) to pay $2 / lead upfront, and make 10X on the backend.

Page 27 If you’re creating 2x, 3x, or even 10x on the backend, you can increase the affiliate payout, which increases the affiliates ROI, who then increases traffic.

If you pay quickly (weekly), and quality is good, you’re tapping into endless customers.

If you’re unable to increase the lifetime value of your customers, you need to lower your payout; however, you then risk not attracting aﬃliates due to low payout.

Aﬃliates need competitive payouts to create a satisfactory return on investment.

2) SALES

Do you know the lifetime value of one customer?

This is a great starting point for ﬁguring out your commission for aﬃliates.

There are some quick questions you want to answer below,

Page 28 - If a customer buys your product, what percentage of customers return and make additional purchases?

- How much on average are returning customers spending per visit?

- How many times on average are they returning to make a purchase?

- Is there a monthly fee to continue using your product/service?

- If so, how many months on average does a customer continue to purchase?

Page 29 Many key performance indicators are easier to measure online vs oﬄine, as you’re collecting, and conﬁrming the customer's information on each lead, and purchase.

If you’re unable to answer these questions, start brainstorming processes to capture this information, and start understanding your business from the top down.

If you know these details, you’re well on your way to success!

3) APP INSTALLS

There are a few considerations when running app installs in Aﬃliate Marketing.

Answer the below questions to ﬁgure out what commission is possible for your app.

Page 30 - Do you have in app ads in the free version of your mobile app?

- If so, how much on average is one person generating in advertising revenue?

- Does your app have a digital currency users use to upgrade items?

- If so, what percentage of users make in app purchases?

- What is the average amount one user spends on in app digital purchases?

- Does your app have the option to upgrade to a paid version?

- If so, what percentage of users upgrade to the paid version? Page 31 Once you know the answers to the above, you know how many app installs it takes to create a paying customer, and how much revenue these customers generate.

A wise man once said... “Know your metrics, and stay within them.”

Do you need assistance figuring out what commission to pay affiliates?

Page 32 3) PROVEN AFFILIATE OFFER

There is a good chance you know what a proven aﬃliate program is now.

The above sections pointed out the key ingredients on creating an aﬃliate program, and may have provided ideas for tweaking your current program.

You’re gonna need afﬁliates, a tracking software, and a product people want.

The biggest challenge is managing the affiliate program - finding affiliates, and buying traffic to find out what works, and doesn’t work, so you can share data with affiliates.

Page 33 There is plenty of successful aﬃliates ready, and willing to build your brand. Just imagine a team of aﬃliates promoting on your behalf…

Your ad is all over Facebook, Pinterest, Google, Bing, the daily websites your friends, and family visit, and the sales are pouring in. Anywhere you look, your ad is sitting there.

You have a team monitoring the leads, and sales to ensure you’re proﬁtable.

Those partners underperforming are paused, and those partners providing satisfactory results are rewarded w/ higher payouts & quicker payments in exchange for more traﬃc.

That’s how an aﬃliate program is running when it's managed correctly.

An aﬃliate program is a long term investment, as you need to be inventing, and reinventing your brand - keeping one step ahead of your competition.

Once you know the process, you may choose to develop multiple aﬃliate programs - you can double, triple, or even quadruple your income quickly by following the same steps.

Page 34 The most important elements in creating a proven aﬃliate program are found below:

1) Product with Mass Appeal 2) Tested Creatives (Banners, Emails, Landing Page, Presell Pages, etc) 3) Aggressive Affiliate Payout 4) Affiliates 5) Monetization - Frontend & Backend Monetization Systems (10X revenue)

An aﬃliate program with mass appeal is as simple as “meditation”, “yoga”, “guitar lessons”, “gardening”, “bodybuilding exercises”, among many product niches.

The idea is to create a product that reaches millions, rather than hundreds. Developing a robust monetization system is key to getting a step ahead of the competition, as you know your margins, and the ability to oﬀer aggressive aﬃliate payouts is available.

Need help putting all this together?

Page 35 Afﬁliates

Do you know what methods affiliates are using to promote products online?

It’s almost a full time job keeping up with new ad placements, and traﬃc sources.

There are thousands of people promoting affiliate products, and there are hundreds of traffic sources available to affiliates to promote your product across the internet.

NAMoffers developed Affiliate Expert Academy,

the #1 resource for learning affiliate marketing and

mastering the building blocks of building an online business.

Page 36 You can tap into their experience, and creativity to generate millions of dollars.

The important part is you know the type of affiliate you're working with, the traffic source the affiliate is using to drive traffic, and the basic strategy used to qualify customers.

You can then feel comfortable having other people promote your product.

Below is an outline of the diﬀerent traﬃc sources available:

• Content Advertising: Aﬃliates in this category include blogs, native ads, review sites, forums, etc — and is often viewed as a “natural” way to advertise to consumers.

• Comparison & Coupon Sites: Aﬃliates in this category use their sites to compare prices, and features on products, and/or provide coupons to consumers

• Display Advertising: Display advertising is a type of online advertising that comes in several forms, including banner ads (images), rich media (videos) and more.

• Email Marketing: Email marketing is directly marketing an advertisement (newsletter or stand alone) message to a group of people using email communication.

Page 37 • Incentive: Aﬃliates include loyalty programs — cash back, reward, and voucher web sites. — users are rewarded with cash or points for signing up to oﬀers.

• Mobile Advertising: Mobile advertising is a form of advertising via mobile (wireless) phones, tablets, or other mobile devices. It is a subset of mobile marketing.

• Native Advertising: A type of online advertising that matches the look and feel of the website it appears on. Aﬃliates use top 10 lists, product review sites, trending news, and how-to guides as forms of native advertising in the aﬃliate channel.

• PPC Advertising: Pay-per-click marketing is a way of using search engine advertising to generate clicks to your website, rather than “earning” those clicks organically.

• PPV Advertising: PPV works similar to PPC. You input a destination URL and then bid on either keywords or URL's. PPV ads are typically served as a text ad or pop up.

• Retargeting: Retargeting drives potential customers back to your website by targeting users who have previously visited your website but didn't sign up or make a purchase.

Page 38 • Social Media: Social Media (People Based Marketing) includes Facebook, Instagram, LinkedIn, Pinterest, Twitter, Youtube, and other emerging social media platforms.

• Video Advertising: Aﬃliates in this category create vieo ads that are served on Facebook, Youtube, and other video distribution channels. Similar to television ads.

In-House VS Afﬁliate Network

This last section is a big winner with many of the readers. If you made it this far in one sitting, you’re likely on the edge of your seat buzzing with energy.

Some skip right to this section because it's the last section, and hey that is just ﬁne.

Page 39 The above sections educate, and this section sums everything up in quick point form.

It’s easier to see the beneﬁts when it’s written out in point form, and the pros and cons are staring you right in the face, like “heyyyyy, here are your answers!”

Simple vs Complex

You may want to go back through a second time, and make your own notes.

Some already created a plan of action (hiring, delegating tasks, outsourcing) to start testing, tweaking, and optimizing their aﬃliate program to create a proven oﬀer.

Page 40 That’s what this white paper is all about - taking notes, creating a new perspective, being open to improvements, and creating a conversation within your community or tribe.

Take a few days to digest the information.

If you’re learning about Aﬃliate Marketing for the ﬁrst time, you may need to read this a couple times. It’s a new language, simple, yet complex, and spoken by millennials.

Page 41 One of the best ways to help you make a decision is…

Think about it, talk about it, ask questions, get perspectives, and make a decision.

Here are the pros and cons that will help you choose:

IN-HOUSE PROS

• In-House affiliate programs get full control of the tracking software, giving the ability to implement advanced applications, and integrations. • There is no ‘Middle Man’ fee for outsourcing to an affiliate network. • Direct contact with affiliates for feedback, incentives, and relationship building. • There are no network fees, allowing you to pay affiliates more. • Real-time accessibility to data on affiliate traffic sources, methods, etc

Page 42 IN-HOUSE CONS

• In-House affiliate programs is a full time job, and take time to launch, as you need to test, tweak, and optimize your affiliate program. • No immediate access to large database of affiliates. • Requires a bookkeeper to manage, and process monthly payments. • The affiliate tracking platform software is complex to set up. • Potential for fraudulent affiliates who burn your customers. • Affiliate managers require training, and there is a large learning curve.

Page 43 AFFILIATE NETWORK PROS

• Instant access to a wide variety of professional affiliates. • Affiliate networks have expertise with hundreds of advertisers, which means you gain access to valuable insights on how to optimize. • Extensive experience screening affiliates to ensure quality traffic. • Affiliate managers communicate with affiliates weekly. • Compliance team reviews referral links of every click, lead, and sale provided to confirm traffic is authentic, and meets quality standards. • Affiliates networks provide Affiliate Marketing resources, and training. • Process one payment to affiliate network, rather than paying each individual affiliate.

Page 44 AFFILIATE NETWORK CONS

• Offers may be placed alongside competition, meaning you may need to compete with similar advertisers with competitive programs. • Less control adding new applications to the affiliate tracking software. • There is a “Middle Man” fee collected by affiliate networks on each sale. • Susceptible to fraud if affiliate network isn’t screening correctly. • Your offer may get “lost” in the hundreds of offers in affiliate network.

Page 45 Conclusion

At this point, you know more about Aﬃliate Marketing then the average company does.

You are locked, and loaded w/ the information to generate millions of dollars. There is plenty of testing, tweaking, and aﬃliate commissions to be paid out in your lifetime.

Aﬃliate Marketing is thriving, and there is endless traﬃc, and customers available.

Page 46 There is the potential to have 100’s of aﬃliates promoting your product.

This business model isn’t new — Aﬃliate Marketing is highly recognized by Amazon, Facebook, Coca-Cola, Google, Microsoft, and the majority of large brands.

There is an abundance for niche products to grow — Aﬃliate Marketing is for any product, merchant, or advertiser looking to develop new customers on a performance basis.

Aﬃliate Marketing is a performance based model.

Aﬃliate Marketing is becoming the largest distribution channel in the world.

Bigger than Walmart! Bigger than Amazon! Bigger than Alibaba!

Bigger than whatever big box “drone delivery” chain is coming out!!!

Page 47 This white paper sets the bar (expectations) for advertisers looking to develop a high performing, profitable affiliate program for both advertiser, and affiliate.

You have the basic information to research more, and look into hiring the right people.

You have the resources, and connections to outsource your aﬃliate program.

To learn more about becoming an advertiser with NAMoﬀers, visit NAMoﬀers

If you’re interested in learning about the affiliate side of the business, visit Affiliate Expert Academy — a resource created by NAMoffers for affiliate marketers to learn and grow.

Wishing you best of luck on your journey in online advertising!

-MRx

Page 48 To schedule a call with NAMoﬀers advertiser team, contact michael@namoﬀers.com

“If you build it (affiliate program), they (affiliates) will come”!

Michael Rich Co-Founder | Advertiser Director

iiiiii iiiiiiii iiiiiiii iiiiiii Michael Rich: iiiiii iiiiiiii iiiiiiii iiiiiii

iiiiii iiiiiiii iiiiiiii iiiiiii NAMoffers: iiiiii iiiiiiii iiiiiiii iiiiiii

Page 49