Affiliate marketing is a commission-based process by which a merchant (Advertiser) pays a referral reward (commission) to its sales partners (so-called Affiliates or Publishers.) The Affiliate is paid each time a user buys a product through the Affiliate’s website – provided the order isn’t cancelled.
To better understand the OTTO Partner Program, the two following examples may be helpful:
From a Partner’s website, 500 users are referred to the OTTO shop through an online ad. However, none of these 500 users buys a product from OTTO, as a result the Partner’s website gets no commission from OTTO.
In the second example, ten of these 500 users buy a product from OTTO, as a result the affiliate site is rewarded a 10x commission.
The commission amount depends on the extent to which the Affiliate’s site has contributed towards the user’s customer journey. To learn more about the customer journey and dynamic attribution at OTTO, please click here. Unlike other online marketing measures, affiliate marketing focuses on user quality rather than quantity.
An Affiliate Network is an intermediary linking Advertisers and Publishers. At OTTO, we cooperate with Awin which is the largest network in Germany. Our Awin partner profile provides a brief overview of our program and offers our latest advertising material for you to download to your website at any time in order to keep your users up-to-date about the most relevant information available from OTTO. In addition, your personal area offers you the opportunity to review or export various reportings detailing your performance. Through Awin, the entire tracking and commission payment process is managed. Please feel free to contact Awin or get in touch with us directly at any time.
An ever larger number of different affiliate models has developed or evolved from existing affiliate concepts over the years. One of the methods that has only really developed until recent years is certainly Influencer Marketing. Below we would like to briefly introduce the most popular models currently being used by affiliates:
Content affiliate pages, e.g. blogs or Influencers
Content Publishers create unique content that provides added value for their users in a certain niche or segment. Users trust the recommendations from Publishers or Influencers and will, in the best case, click on the affiliate link displayed on the Partner’s website to buy products from the Advertiser’s shop.
Deal & coupon Affiliates
Here, users are shown the best deals and coupons from different shops. Through these Publishers, users then get the opportunity to go to the best offers and save quite considerably.
Loyalty & cashback affiliates
These Publishers reward users for their loyalty, provided they buy from an advertiser through their website. The benefits offered may vary depending on the provider, e.g. cashback, miles or contributions to non-profit activities.
Product comparison websites
Publishers aggregate and present product information on product comparison websites, thus enabling users to compare products directly with regard to certain criteria. Ideally, the user will, on the basis of this comparison, decide on buying one of the products listed.
Email marketing Affiliates
Email Publishers send emails containing information and offers from Advertisers to their subscribers who might be interested in such offers.
This method opts for a technical solution to simplify and facilitate the shopping experience. Such solutions include browser add-ons or software that needs to be downloaded and is to result in an improved shopping experience.
In Affiliate Marketing there are many ways in which to pay for advertising. The methods used most frequently include:
Cost per order (CPO)
In the CPO model, which is used for the OTTO Partner Program, the Publisher is paid as soon as a purchase has been made on the Advertiser’s website, provided the user has first been on the Publisher’s website and has then reached the Advertiser’s website via an affiliate link. Many programs rely on the last click principle. This means that only the Publisher, through whose website the user has made the final click prior to purchasing, gets a commission. This is not the case with OTTO who makes sure that each Publisher, who has been part of the customer journey and has thus contributed towards the user’s buying decision, gets a fair share of the reward paid. To learn more about dynamic attribution, please click here.
Cost per Click (CPC)
In the Cost-per-click model, Advertisers pay a fee each time one of their ads is clicked. Through this method, the Publisher gets paid much earlier than in the CPO model because all he or she has to do is make sure that the user clicks on the respective ad. From the Merchant’s perspective this method ensures that the user has actually noticed the ad, because he or she must then still perform a click to actually go to the Advertiser’s website.
Cost per Lead (CPL)
A Lead compensation can be compared to a touchpoint fee. This method is often employed in newsletter campaigns, where an Advertiser pays a Publisher a fixed commission, e.g. for each newsletter subscription. This method is also used in app marketing to push the download (CPI – cost per install) of the respective Advertiser app.
Affiliate marketing is a very effective and efficient form of online marketing, with benefits both for the Advertiser and the Publisher. Advertisers get the opportunity to market their products and offers on relevant partner websites while Publishers get the chance to increase sales. Personal contact between Advertiser and Publisher is particularly important as it enables both parties to quickly adapt to changing framework conditions at any time and to continuously optimize the partnership. Affiliate marketing creates a win-win situation for both sides if applied correctly. At OTTO, maintaining personal contact with our partners is particularly important to us and you are very welcome to get in touch with us directly at any time through our Contact Form. We will get back to you as soon as possible and will be happy to help and advise you.