This presentation is from Affiliate Summit East 2015 (August 2-4, 2015 in New York, NY). Session description: Affiliate marketing has the potential to contribute to new revenue opportunities. Explore the pitfalls of affiliate marketing and conversely how to leverage affiliate marketing in new innovative ways.

1. Affiliate Marketing 3.0 –
What’s Wrong, What’s Right

2. Dave Stewart
Founder & CTO
CAKE
David Sendroff
Founder & CEO
Forensiq

3. Agenda
The Affiliate Landscape
What to Avoid
What You Should Be Doing
Key Takeaways
Q & A
1
2
3
4
5

4. CPA very appealing price format
• Theoretically no risk to advertisers
Wild Wild West
• No transparency
• Inaccurate data
• Fraud
- Affiliates not vetted properly
- High profile cookie stuffing cases on Ebay and Amazon (popups)
- Sophisticated botnets and teams overseas dedicated to faking conversions, many with stolen
credit cards
• Many incentivized offers without advertiser approval
• CPA offers over promising on “lotions and potions” led to FTC involvement
Affiliate marketing not taken seriously, too risky with fraud rampant and difficult to manage
The Affiliate Marketing Landscape – Past to Present

5. The Affiliate Marketing Landscape – Past to Present
Some improvement over the years but still many issues until recently
• Lackluster tools to effectively manage affiliate programs
- Unreliable, high profile outages
- Missing data granularity
- No incentive for higher quality traffic
• Bad business models
- Networks without exclusive offers, no differentiation
- Networks without direct affiliates, only working with other networks
- Affiliate payments occurring before conversions confirmed, high float, networks
don’t get paid and go out of business
- Remaining/reputable affiliates not paid

6. What To Avoid

7. Impact of Fraud
• Fulfillment costs
• Product costs
• Affiliate payouts
• Loss of advertisers
• Loss in revenue

8. Affiliate Fraud Tactics
Penetrating
Networks
Acquiring
Stolen
Identities
Spoofing
IP
Manipulation
Unapproved
Incentivization

9. Mobile Fraud Tactics
Device
Emulation
Device
Hijacking
Appjacking Install Fraud
Unapproved
Incentivization

10. Infiltrating Networks

11. Recycling Data

12. Spoofing Tools: Browser, OS and IP Manipulation

13. Conversion Rate of High-Risk Recycled Traffic
According to numerous studies across multiple
verticals, high-risk leads were up to 7x less likely to
convert when compared to average lead data.

14. What You Should Be Doing

15. Introduction to Attribution
Advancements
• First/Last Touch not good enough anymore
• Increased visibility crucial to understand affiliate interaction
• Advertisers will start pushing partial payouts at some point, will
flow downstream
Challenges
• Affiliates want simple/predictable payouts
• Tools have traditionally been lacking to support this concept

16. Attribution
Multiple Threats
• Fraudulent Links
• Malware
• Forced Actions In Browser
• Cookie Stuffing
Solution
• Fraud detection is the first step to proper attribution

17. In-House & Outsourced Affiliate Marketing –
Best Of Both Worlds
• Publishers want to go to direct to the Advertisers
• Innovation is typically driven by the needs of the largest clients
• High commission fees
• Lack of transparency
• Difficult to view the Lifetime Value of each consumer and match it to the appropriate
source
On average, 90% of a brand’s traffic comes from 10% of its publishers. The
capabilities of the new technology solutions on the market mean that advertisers can work
directly with that 10%, cultivating those key relationships one-to-one, while continuing to
rely on third-party networks to manage the long and mid-tail affiliates that they are good at
harvesting.

18. Going Mobile – Don’t Lose The Trail
• Mobile web only – Identical to desktop tracking
• Native Apps
– CPI – Track App Installs
– In App Events
• Game Progress
• Virtual Currency Purchases

19. Growth of Mobile
Mobile is growing and accounts for 29% of eCommerce transactions in the US and 34% Globally
Key Trends:
• 10% Growth in 1st Quarter 2015
• In most countries, including US, the majority of transactions are on smartphones
• Conversion rates are improving
The Future:
mCommerce on track to be 40% of eCommerce by the end of 2015
(Source: Criteo – State of Mobile Commerce Q1 2015)

20. Targeting – It’s No Longer A One Size Fit’s All
Target With:
• Unique Creatives
• Country Specific Landing Pages
• Device Specific Landing Pages
• Click Scoring

21. Payout Granularity
• Incentivize specific affiliates
(and/or sub affiliates) for higher
quality traffic with custom payouts
• Create tiered payouts based on
volume
• Classify unproven affiliates in lower
payout tiers with path to upgrade

22. Pending Conversions – Quality Counts
When a conversion is marked as pending, Advertisers have the
ability to review each conversion and process it before verifying
the conversion as either approved or rejected.
• Eliminate Risk and Fraud
• Take Control of Your Data
• Enhance Advertiser/Affiliate Relations
• Improve Lead Quality

23. Real-Time Status Updates – Enhance Leads
Buyer specific feedback allows purchasing buyers to assign a
status to a lead. This information from the buyer is pivotal in
determining the true quality of your leads. If buyers filter this
feedback into a lead status report, this will provide Advertisers
with real-time metrics on lead quality.
• Eliminate Poor Quality Traffic
• Identify Top Performing Affiliates
• Enhance Buyer/Advertiser Relations

24. Retail Data- Where To Spend In The Future?
Voucher Codes
• Useful for attribution on non-traditional cpa
campaigns
• Attribution can be misleading if only crediting one
source
Shopping
Increased Data Granularity
• Track items purchased
• Know your affiliates’ strengths
• Target future campaigns

25. Performance Marketing Survey
What clients are saying:
• Affiliate space is more defined now with access to more brands and
increased trust throughout the industry
• Improved support
• Increased self-regulation
• Innovations and regulations improving consumer experience
Opportunities
• Social media integration
• Mobile as it matures

26. The Past, Present and NOW The Future
More focus on data and optimizations
• Gather more consumer data with proliferation of DMPs
- Work with affiliates proven in targeted segments
• Machine Learning
- Recommendation engines
- Incentivize high quality traffic, drop low quality
- Prediction engines
- Target users to different offers based on likelihood of conversion
• Performance Marketing = Affiliate Marketing
CPA taken seriously again

27. Key Takeaways
Data Collection: Anywhere & Everywhere
Attribution, Targeting, Optimization
Growth of Mobile
Value of Fraud Detection

28. Q + A
Dave Stewart
dave@getCAKE.com
949.548.2253
Twitter: @Davestewart
www.getCAKE.com
Dave Sendroff
david@forensiq.com
212.685.5931
Twitter: @forensiq
www.forensiq.com