IAB Affiliate Marketing Handbook
Information on getting the most from your affiliate programme

• Why use affiliates?
• What kind of affiliate programmes are there?
• What should you be aware of when setting up a programme?
  

Foreword:

The purchase of goods and services over the internet is the new commerce reality. The value of online shopping sales in the UK exceeded £4bn a month for the first time in July 2007 according to the IMRG Index. Consumer confidence in internet shopping is at an all time high, online retailers such as Amazon and Play.com have become mainstream brands and all high-street brands now recognise the importance of the internet sales channel and have invested in ecommerce.

Hand in hand with the growth of e-retail there has been a rise in affiliate marketing. In 2006 E-consultancy estimated the value of affiliate sales to be above £2bn and increasing on average 60% year-on-year. Affiliate marketing is the ideal partner to online retailers as it works like a virtual sales team, paid only on commission.

For online retailers and service providers the use of affiliate marketing has allowed the acquisition of new customers and helped consolidate brands’ positioning in existing markets. Through the management of an affiliate network, affiliate channels have become a very profitable addition to sales and marketing strategies.

There is still work to be done, however. The IAB’s affiliate marketing council, whose members contributed to the development of this guide, have identified that there remains a need to better educate advertisers on affiliate marketing. This guide outlines how the discipline works and highlights the different ways in which affiliate strategies can help brands trading online.

We hope you find it a useful resource in the planning of your own affiliate programme.

Dan Redfearn
Membership Manager
Internet Advertising Bureau

Learn about every step of setting up an affiliate programme

Visit Affiliate Marketing Handbook Website

Hand in hand with the growth of e-retail there has been a rise in affiliate marketing. In 2006 E-consultancy estimated the value of affiliate sales to be above £2bn and increasing on average 60% year-on-year. Affiliate marketing is the ideal partner to online retailers as it works like a virtual sales team, paid only on commission.

Download Affiliate Marketing Handbook

PDF format, 2.7MB, 52Pages.

Contents:
3 What is affiliate marketing?
6 Who are affiliates - understanding the different types
10 When do you use affiliate marketing?
13 Putting affiliate marketing at the heart of your business
16 A day in the life of a programme
20 Considering a 12 month strategy
24 Affiliates and brand
28 Managing affiliates and pay per click search
33 Making affiliate marketing a sustainable channel for sales and marketing
44 Making affiliate marketing a sustainable channel for sales and marketing
46 Glossary of terms

Glossary of terms:

Advertiser - (also called Merchant, Retailer, E-retailer, or Online Retailer) Any website that sells a product or service, accepts payments, and fulfills orders. An advertiser places ads and links to their products and services on other websites (publishers) and pays those publishers a commission for leads or sales that result from their site.

ASP - (Application Service Provider) An online network that is accessible through the Internet instead of through the installation of software. It is quickly integrated with other websites and the services are easily implemented and scalable.

Click-through - (also called click) Refers to the action a visitor takes when they are referred from one website through a link or advertisement and are taken to another website.

Commission - An amount of income received by a publisher for some quantifiable action such as selling an advertiser’s product and/or service on the publisher’s website.

Cookie - A small file stored on the visitor’s computer that records information that is of interest to the advertiser site.

CPA - (Cost Per Action – see also CPC, Cost Per Click) A metric for online advertising where a rate is set for every action that is taken by a visitor.

CPM - (Cost Per Thousand Impressions) A metric for online advertising where a rate is set for every thousand impressions.

CTR - (Click Through Rate or Ratio) The percentage of clicks for the number of advertising impressions displayed.

E-Commerce - (Electronic Commerce) Business that takes place over electronic platforms, such as the Internet.

EPC - (Average Earnings Per One Hundred Clicks) A relative rating that illustrates the ability to convert clicks into commissions. It is calculated by taking commissions earned (or commissions paid) divided by the total number of clicks times 100.

Impression - The viewing of an advertising banner, link, or product on the Internet.

Lead - When a visitor registers, signs up for, or downloads something on an advertiser’s site. A lead might also comprise a visitor filling out a form on an advertiser’s site.

Link - A link is a form of advertising on a website, in an email or online newsletter, which, when clicked on, refers the visitor to an advertiser’s website or a specific area within their website.

Pay-for-Performance Program - (also called Affiliate Marketing, Performance-based, Partner Marketing, CPA, or Associate Program) Any type of revenue sharing program where a publisher receives a commission for generating online activity (e.g. leads or sales) for an advertiser.

Pay-per-lead - The commission structure where the advertiser pays the publisher a flat fee for each qualified lead (customer) that is referred to the advertiser’s website.

Pay-per-sale - The commission structure where the advertiser pays a percentage or flat fee to the publisher based on the revenue generated by the sale of a product or service to a visitor who came from a publisher site.

Publisher - (also referred to as an Affiliate, Associate, Partner, Reseller or Content Site) An independent party, or website, that promotes the products or services of an advertiser in exchange for a commission.

Real-time - No delay in the processing of requests for information, other than the time necessary for the data to travel over the Internet.

Sale - When a user makes a purchase from an online advertiser.

Web-based - Requiring no software to access an online service or function, other than a Web browser and access to the Internet.

Web-portal - A website or service that offers a broad array of resources and services, such as email, forums, search engines, and online shopping malls.

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