Can you explain to us what affiliate marketing is?

Affiliate marketing is a working relationship whereby a merchant, either an online shop or advertiser, has consumers driven to it by adverts on an affiliate website. If a consumer visiting the affiliate’s site, clicks on an advertisement and goes on to perform a predetermined action on the advertiser’s site , which is usually a purchase; then the affiliate receives a payment.

Is there scope for this in emerging markets?

For affiliate marketing to work well in a given market, there are a few things that need to exist.

Well known brands in the market need to be doing successful Ecommerce, and need to deliver a satisfying ecommerce experience. There also needs to be a culture of online shopping. There needs to be sufficient online audience for affiliates to mine and channel traffic to the merchants or brands they are representing. And lastly, the market needs credible affiliate websites using accountable online marketing practices, who have a loyal following.

Emerging markets such as South Africa are in the very early stages of the first two points. Therefore affiliate marketing as a standard practice within a marketing strategy is still in its infancy.  It would be a challenge to get it right at present but that is not to say it couldn’t be done. The ROI model, that being the commissioning of a third party to market your product, is successful in and of itself.  Right now the model would probably work best as individual partnerships negotiated between interested parties. An example of this is Woolworths partnering with Discovery Vitality to promote themselves on the Vitality website, with their own profile and special offers.

Can you give an example of any affiliate marketing you have done or are busy with?

In the UK I managed two fairly large affiliate programmes with two networks.  I was responsible for the growth of both programmes, oversaw the relationship with the individual affiliates and had to ensure that the brand, Weight Watchers, had continuous exposure across the affiliate networks, with activity peaking during key campaign periods in, line with sales targets.

What are some challenges that come with choosing this route?

Well some of the key challenges are managing an offer portfolio to keep affiliates happy. They like to offer their audience an exclusive deal. And balancing this with over-exposure in the market. Ensuring consistent, high account manager service levels from the networks. This plays a huge role in the quality of the affiliates, general reporting and effectiveness of marketing campaigns, as account managers have to do a lot of following up with affiliates on your behalf. Attracting good affiliates who actually make sales is another challenge. Affiliate marketing follows the usual Pareto principle, which means that 20% of affiliates drive 80% of the sales. Lastly, finding time to talk regularly with the top affiliates to keep the brand top of mind, can be challenging.

How do you think trust is perceived though this type of marketing?

If you had asked that question ten years ago, you’d have been met with a snort and a derisive laugh.  It used to be an industry riddled with a lot of clandestine practices.  Today affiliate marketing is very well established across Europe and the USA.  Most top brands use affiliate marketing as a standard part of their activity.

It has created what are termed Super Affiliates, which have become reputable brands in themselves, churning out thousands of Ecommerce transactions both online and via social media and mobile.

A few UK examples include TopCashBack.co.uk, Quidco.co.uk and Nectar.com.

These are the type of sites which successfully represent top brands across the country and help to build those brands in the Ecommerce space.

Thanks for talking to us at Heavy Chef, Alistair. How has the rising demand for digital marketing affected your agency’s approach to advertising?
There is a rising demand for what we call ‘integrated campaigns’ in which digital marketing plays a very big role. Clients are no longer asking for once-off ads that demonstrate their brand’s features and benefits, but rather for richer, broader experiences that their target market can interact with, and this obviously calls on social media and digital platforms. Having said that, I believe many marketers are still grappling with how this kind of advertising works. Many marketers are talking digital because they believe it’s more cost effective than traditional media, so their motivation isn’t necessarily right. But yes, it’s having a massive bearing on how we develop our agency and what skills we need to add to it.

Despite the hype of the ‘digital revolution’, many traditional agencies are still standing strong. Do you think there is a place for both – or will we eventually see digital and traditional merge as one?
Many traditional agencies will definitely stand strong and committed to their area of expertise, in much the same way as many PR agencies, or digital agencies, will stick with what they know. It’s not about being stubborn or shortsighted. It’s simply about an agency’s appetite to tackle something outside of their immediate expertise or comfort zone. Many ad agencies are expanding their skills into all sorts of areas, including PR, digital and social media. But how many digital agencies or PR agencies are expanding their skills back in the opposite direction? There is absolutely space for people to stick to what they know and love, although there will definitely be a lot of agencies bringing into their companies whatever skills they think are lacking. Advertising is definitely evolving rapidly, but I don’t think that merging a digital and traditional agency even fully equips you to handle where marketing communication is heading. New generation ideas are even broader than what those two merged companies can deliver. But yes, in principle I believe that if you want to be fully equipped to make great marketing in this day and age, merging traditional skills with digital skills is the very least you should be doing.

Is there a good example of King James merging digital and traditional platforms in a current campaign for one of your clients?
We have a number of clients who are aggressively pursuing integrated campaigns, and right now we have a dozen very large campaigns in development and production. Five or six creative people across three or four of our companies have sat and collectively brainstormed these campaigns, so they will look quite different to the normal sales pitch that a traditional ad might deliver. I’d rather not forewarn their competitors by listing them, but Kulula.com has been our most innovative client in this regard. We have had massive success with them on integrated campaigns like “The official sponsor of the you-know-what” and their 10th Birthday celebration. But to be honest, I think we are only just starting to find our stride now.

Ha, thanks for the tip; we’ll keep a keen eye on Kulula. Tell us about your current passion project. What are you most excited to be working on?
We will be making a very big announcement, possibly even during the course of this week. King James is always constantly evolving as a group. We believe that we have a strong sense of where marketing is heading and we’ve identified what we need to do right now to be better at what we do.  We’ll be taking a big, bold step in the right direction this week, and it will most certainly open the creative flood gates for King James.  So needless to say I’m stupidly excited right now about the way we’ll be able to think going forward. Other than that, nothing excites me more than a client who has a twinkle in their eye – who not only asks for bold creative thinking but actually buys it when we give it to them –  and we have a number of clients that fall into that category right now. I’ll be lynched if I mentioned one over another. I’ll take the 3rd amendment, if we even have one.

Alistair, thank you for chatting to us. Your work is very inspiring to us, and we’re looking forward to seeing how your agency evolves over the next few years. Heavy Chef readers, you can find out more about King James on their website (here).

The answer my learned lecturer gave me was not very satisfying. She mumbled for 15 minutes about communicating to markets and contained stuff about the ‘P’s’ of marketing. The response was long and rambling, and left me a little bewildered.

If you Google the phrase “What is marketing” now you will find the answer just as bewildering. There are many differing definitions.

As the CEO and Creative Director of a company concerned primarily with offering marketing services, I’ve grappled with the challenge of defining the term correctly for some time. It is a sprawling, convoluted subject and tough to get to the heart of what we marketers do.

At the same time, marketing has experienced seismic change in our generation.

Social media, in particular, is the most exciting innovation in communication since Alexander Graham Bell unveiled the telephone in 1876.

After a lot of thought and discussion, head butts and tequilas, Mike and I finally settled on this:

“Initiating and maintaining profitable relationships.”

This definition cuts to the core of the marketing process. Our jobs as marketers, digital or otherwise, is to first find customers or clients (initiate); then maintain interaction with those customers (maintain); while ensuring that the interaction has value for both parties (profitable) in order to build a sustainable community (relationships).

As the internet exposes us to larger audiences, the functions of forging relationships, building communities, mass dialogue and customer interaction are now particularly important – concepts vital for marketers to grasp if they are to remain relevant in an increasingly noisy environment.

According to Sachin, “the reality is that these social networks aren’t particularly popular in developed countries yet and they are pretty much unknown in developing countries (we’re looking at 3 million users which is still a very low number). Unfortunately, it still feels that we haven’t managed to effortlessly integrate locations into the way we use the internet.”

I asked my Twitter friends to see what they have to say about Foursquare:

Blogger Tayla Goldberg wrote a post on how she experiences Foursquare. For Tayla “it is one big tourism map really”.

“Could really see this taking off with tourists in a big way, why buy a huge out-of-date map, when you have it all at the click of a button?”

Okay, so it benefits tourists… What about the marketers?

“From a marketing perspective I think this is an amazing tool, you can monitor who is ‘Mayor’ of your establishment, and reward them for using your services the most, because really its all free promotion for your brand.”

Digital diva, Robyn Silverstone also wrote a post on the Foursquare special offers saying its “creating incentives to drive customers to your business”.

Foursquare users are keen and optimistic. Now, what about the other side of the coin? What are the brands saying about Foursquare?

I asked Williams Hunt General Motors dealer what they think about using Foursquare as a brand and this is what they had to say:

“Foursquare is a pretty cool way to create awareness of our company, location and important contacts. Great to promote loyalty & it’s mobile”

So, Yes or No?

I would have to agree with Sachin and say that there is potential for something big to happen with location-based marketing but we simply aren’t there yet. However, there’s nothing wrong with being the early bird and catching that worm!

Check out these interesting links on Foursquare:

• So we grew 3400% last year… | blog.foursquare.com
• Foursquare Is Growing Quickly — But Still Not Mainstream

The winner will be the person who comes up with the best name. They will win a collection of great digital marketing books which will include:

• Waiting for your cat to bark by the Eisenberg brothers
• Don’t make me think by Steve Krug
• Web analytics – an hour a day by the great Avinash Kaushik
• Social media metrics by Jim Sterne

These great books will be sent to our lucky winner where ever they are in the world.

My worry is companies will want to use Augmented Reality just because it’s the buzz technology, in the same way as we see businesses working with Social Media because everyone else is, rather than thinking about the substance it can provide to a well strategised marketing campaign.

Louis covered the digital consumer, and what we can expect, and Justin tore into the macro-environmental landscape, sharing loads of love for Telkom along the way.

We gave away some of our new T-shirts at the end, followed by a Q&A session with the audience particularly interested in some of the controversial and contentious future predictions by our favourite (not so skinny) Australian living in SA.

Here is Louis’ presentation:

Here is the presentation by Justin:

Thanks again to Deloitte for such a stunning venue, and for Corona for the refreshment.

• Build stronger customer relationships by sending out an email newsletter.

• Offer great content and tools of value regularly so it gets linked to by other sites.

• Keep updated on topical events such as Christmas, New Years or 2010 Soccer World Cup and use them online.

• Create relationships with bloggers and other online folk on social media sites.

• Offer free downloads as a viral marketing method.

• Keep updated on current news in your industry

• Write and distribute press releases that are newsworthy, and send them to newspapers, magazines, and television and radio stations.

• Remember your social networks like Facebook and Twitter, image communities like flickr, and don’t forget forums

• Take part in your online community and join in on the conversations

• Promote your RSS feed for your blog or other website content.

• Write posts for other blogs.

These should get some creative juices flowing and remind you of things you haven’t thought about for a while.

So, I did a bit of digging around and found some interesting learnings…. in fact over the last 3 years or so this market, dubbed the “Silver Surfers“*, has become quite a hot topic of discussion…

1. Silver surfers are becoming the fastest growing Internet demographic group in SA (via Online Publishers Association)
   In the UK – Pensioners average 42 hours a month on the Internet (18 – 24-year-olds average 38 hours)
   In the USA – The overall number of Facebook users between 18 and 24 years of
   age had grown 4,8% + the number of users older than 55 years had grown a tremendous
   513,7% in 2009
2. In the UK – Pensioners average 42 hours a month on the Internet (18-24 year-olds average 38 hours)
3. In the USA – The overall number of Facebook users between 18 and 24 years of age had grown 4,8% + the number of users older than 55 years had grown a tremendous 513% in 2009 (via istrategylabs)
4. Another study revealed that this market is spending online – particularly where there are discount vouchers involved! (via Millenium)
5. There’s even a Silver Surfers Day to celebrate these beautiful people!

Fact is, we know in order to market and generate business successfully online these days, segmentation and targeting is essential.

I’d recommend you start building relationships with this group, they’ll thank you for being a friend…

*An adult, generally 50 years of age or older, who frequently surfs the Web and spends time online (”silver” refers to the color of their hair)