This presentation is from Affiliate Summit East 2014 (August 10-12, 2014 New York City). Session Description: Attribution analytics have made it possible to design commission segmentation strategies that cut costs while rewarding publishers who drive quality results.

1. Advertisers: Why Commission
Segmentation Matters to You
Affiliate Summit East 2014
Aug. 11, 2014 New York City

2. Presented by
Brook Schaaf
CEO and Co-Founder
Schaaf-PartnerCentric
Affiliate Program Management Agency
Twitter: @schaafpc
If you’re live-tweeting about this presentation
be sure to use hashtag #ase14.

3. Agenda
• Background
• What is Commission Segmentation
• Why We Use It; How It Helps
• Case Studies
• Summary
• Questions and Answers

4. Commission Segmentation Is …
• Using attribution tools / analytics to design custom
commissions for specific affiliates or types of affiliates in
order to reward based upon performance.

5. Why We Use It
• The more we learn about who’s driving results, the more
advertisers want to focus on top performers …
… and dangle the proverbial carrot.

6. The Benefits
• Allows for a strategy-
driven approach to
commissions that goes
beyond trying to pay
more than competitors
• Rewards affiliates who
are driving desired
outcomes
• Reduces amount spent
on results of lesser
quality

7. Case Study – Coupon / Loyalty
• After analyzing program performance we began segmenting
coupon and loyalty publishers for a retail client.
• Value was lower for these “introducers” than it was
for other publishers who were “closers.”
• Coupon/loyalty publishers commissions were lowered
from 8% to 5%
What was the outcome?

8. Case Study – Coupon / Loyalty
• Revenue for coupon/loyalty publishers saw a modest year-
over-year decrease (6.66%) while the commissions paid to
those publishers dropped by 49.95%.

9. Revenue Over Time

10. Cost of Sale Over Time

11. Cost of Sale – Vertical Spread

12. Case Study – Midline Commissions
• A new client had been paying coupon publishers a 5%
commission and non-coupon publishers a 20% commission.
However, many non-coupon publishers were still
promoting coupons.
What was the solution?

13. Case Study – Midline Commissions
• We established a midline commission rate and based a
tiered commission structure on that.
Commission payouts and the cost of sale remained
steady during this period of adjustment.

14. Monthly
Data Table

15. Revenue Over Time

16. Publisher Commissions Over Time

17. Cost of Sale Over Time

18. Commission Rate Tiers

19. Case Study – Lowering Commissions
• An advertiser was offering a default 8% commission rate
that we lowered to 5% for most publishers (allowing two
top performers to remain at 8%).
Commission payouts fell from an average 6 - 6.5% to 5 –
5.5%. Click throughs and revenue remained consistent
with advertiser’s historical data.

20. Monthly
Data Table

21. Revenue Over Time

22. Publisher Commissions Over Time

23. Cost of Sale Over Time

24. Case Study – Lowering Commissions
• A top coupon publisher was earning a 10% commission rate
at initial takeover. This was lowered to 5% and then 1%,
dramatically reducing the cost of sale. Revenue remained
consistent with past performance.

25. Top Coupon Publisher
Revenue & Commissions

26. Top Coupon Publisher
Cost of Sale

27. Case Studies – Elasticity
• We implemented a Q4 growth plan
for a fashion retailer whose affiliate
program saw YoY growth each week in November/December
between 42% and 65%.
• We grew year-over-year revenue for a lead gen client's
mature program by 84% in one month.
• Our affiliate recruitment efforts for a new client brought 118
new affiliates by our second month managing the program,
and by that time the program saw a 135% year-over-year
increase in revenue.

28. Case Studies – Elasticity
• We grew a retail program 20% year-
over-year in the first six months. In
our second year of management, it
grew 60% year-over-year. Now, two
years later, the program is pacing
to hit a 175% year-over-year increase
for July 2014.
• We grew the program for an online
business solutions client by 20%
year-over-year in the first quarter.
In Q1 2014 the client's program
experienced 41% year-over-year growth.

29. Non-Traditional Opportunities
• ArkNet owns MagazineDiscountCenter.com,
which drives $5 - 10k daily but with only a
2 - 4% re-order rate.
• Wants to optimize email list by targeting
those consumers with Quidsi offers
• Goal: develop traditional merchant/
publisher relationship

30. Non-Traditional Opportunities
• InnerVid is a collection of daily and
weekly newspapers
• Wants to monetize papers by joining
affiliate programs
• Will advertise in print editions and track
via unique URLs or coupon codes

31. Summary
• Use your analytics to identify
your top performers.
• Create a commission structure
in which the rewards are tied
to performance.
• Don’t be afraid to lower
commissions when
performance isn’t there.
By the same token, don’t be
afraid to pay higher commissions
for top performing publishers.

32. Thank You
brook@schaafpc.com