(e) Creating a buzz – online viral marketing
From a functional point of view, online viral marketing often involves generating word-of-
mouth and links through to a web site, so it can be considered part of online PR. However,
since it takes many forms it is covered separately in a later section of this chapter.We showed in Chapter 5 that partnerships are an important part of today’s marketing
mix. The same is true online. Resources must be devoted to managing your online part-
ners. Many large organisations have specific staff to manage these relationships. In
smaller organisations partnership management is often neglected, which is a missed
opportunity. There are three key types of online partnerships which need to be man-
aged: link building (covered in the previous section, this can also be considered to be
part of online PR), affiliate marketing and online sponsorship. All should involve a struc-
tured approach to managing links through to a site.(a) Affiliate marketing
Affiliate marketinghas become very popular with e-retailers since many achieve over
20% of their online sales through affiliates. The great thing about affiliate marketing for
the e-retailer, is that they, the advertisers, do not pay until the product has been pur-
chased or a lead generated. It is sometimes referred to as ‘zero-risk advertising’. Contrast
this with nearly all forms of offline promotion where there is not a direct link between
the cost of promotion and the revenue gained. Affiliate marketing also contrasts with
pay-per-click search engine marketing, where the retailer has to pay for the visitor irre-
spective of whether they purchase anything. As a result it is relatively easy to control
affiliate expenditure and a company can readily ensure that spend is below the allow-
able cost of customer acquisition. However, affiliate marketing still has challenges in
that affiliates can be potential competitors in search optimisation and pay-per-click
(driving up bid prices) and they may harm your brand by association if they refer to
pornography or gambling on their site, for instance. Time needs to be allocated to
manage these relationships. Affiliates can be rewarded for their loyalty to encourage
more referrals by tiered programmes such as that run by Amazon.
Amazon was one of the earliest adopters of affiliate marketing and it now has hundreds
of thousands of affiliates that drive visitors to Amazon through links in return for commis-
sion on products sold. Internet legend records that Jeff Bezos, the creator of Amazon, was
chatting to someone at a cocktail party who wanted to sell books about divorce via her web
site. Subsequently, Amazon.com launched its Associates Program in July 1996 and it is still
going strong. Figure 8.17 summarises the affiliate marketing process. To manage the process
of finding affiliates, updating product information, tracking clicks and making payments,
many companies use an affiliate network or affiliate manager such as Commission Junction
(www.cj.com) or Trade Doubler (www.tradedoubler.com). Since the affiliate network takes a
cut on each sale, many merchants also try to set up separate relationships with preferred
affiliates often known as ‘super affiliates’. Affiliate marketing is often thought to apply
solely to e-retailers where the affiliate is paid if there is a purchase on the merchant site. In
fact, payment can occur for any action which is recorded on the destination site, for exam-
ple through a ‘thank you’ post-transaction page after filling a form. This could be a quote
for insurance, trial of a piece of software or registration for download of a paper.CHAPTER 8· INTERACTIVE MARKETING COMMUNICATIONS
3 Online partnerships
Affiliate marketing
A commission-based
arrangement where an
e-retailer pays sites
that link to it for sales,
leads (CPA-based) or
less commonly visitors
(CPC-based).