One of my favorite sessions from Affiliate Summit in Vegas this year, (and one that has stuck with me for weeks), was a case study about multi channel marketing. The case study showed more in-depth how radio ads (including radio ads featuring a celebrity) and affiliates work to get immediate profitability. In this example, the brand started by testing and optimizing radio ad campaigns. Once they found a successful combination, affiliate marketers were able to amplify the message and every channel had a dramatic lift in sales.
The reason I loved this session so much is that it shows that affiliates can dramatically increase profits of even traditional marketing campaigns. Some mistakenly think affiliate marketers are your marketing campaign. We are not. However, as this case study shows, affiliates can piggyback off of the brand's advertising and dramatically improve it.
Another mistake I see is thinking that affiliates cannibalize your brand. Short sighted companies think that they would've driven just as many sales without affiliates. They may get arrogant and think everyone knows about their brand. As this campaign illustrates, affiliates made this campaign profitable. They give more exposures to your brand to push to that sale.
Product: Diabetes Solution Kit, a series of books that have been on the market for 8 years
Marketing channels tested before this case study: SEO, paid search and marketing to email lists
Tested: a combination of radio ads, video, TV and affiliate channels
What Was Working: Email Marketing
My friend Marty Fahncke who gave this presentation looked at of the brand's marketing to see what was working. He found that email marketing performed best. More specifically ads in emails generated by conservative news outlets. He came up with a theory. Most of the email lists from these outlets had conservative talk radio shows which they use to build an email list. He bet that trying radio directly to that audience would do well. So he bought radio spots on those media outlets. It worked and was “crazy successful.” In fact, the radio ads were even more successful than email marketing.
Add a Celebrity Endorsement
Next they looked for a celebrity who their target market would respond best to. They looked for someone who would align well with the brand and someone who conservatives respect. That person was Mike Huckabee. They created a video of Huckabee talking about the product. Then they ran a radio ad that went to a landing page that had a video on it of Huckabee sharing his story of beating diabetes with their product.
To find the best converting video, they tested extensively with 9 variations of the opening lines and they tested different settings. Huckabee standing in front of a desk at his home office was the winner. This took the conversion rate from 5% to 8%.
When working with a celebrity, it's important to find the perfect messenger, to put in front of the perfect audience, and that they have the perfect message. Interestingly, there was a lot of controversy in this campaign when the media jumped on the story and accused Mike Huckabee of selling snake oil. The story played everywhere. Every time he was on TV he defended the product. Although Marty noted that it was stressful to take the heat at the time, sales kept going up.
Today they chose Jerry Mathers as their celebrity ambassador. He's less controversial and someone their audience (55+) can relate to and trust.
Radio Ads + Affiliates = Massive Profit
This chart is beautiful. It shows the radio ad spend and the affiliate sales that happened as a result. As you can see a small bump in ad spend equaled a huge spike in sales from affiliates.
BLUE: the radio ad sales
RED LINE: the affiliate sales
Week 1-10, the blue line is the radio spend, the red line is the affiliate commissions paid out for the campaign.
Week 1 – spent as little money possible testing ($5,000 spent) and generated $3,000 straight from the radio ad. Generated $73,000 in revenue from affiliates. I sometimes wonder if that's a mistake. Without affiliates the campaign wasn't even at break even. With affiliates it was already insanely profitable in the first week.
Week 2 – ramped up radio budget and generated $31,000 in radio sales and brought in $148,000 from affiliates.
Week 3 – spent even more ($35,000) and brought in $179,000 from affiliates.
Week 4 – $57,000 in radio sales $280,000 in affiliate sales.
At Week 7, they had $98,000 in radio revenue and the affiliates did $800,000!
All other revenue such as SEO, social media, etc., all followed the same trend line. When the radio ads stopped running, affiliate sales dropped dramatically too.
Conversions across all channels:
Online only 3%
Radio around 5%
Celeb radio support 8%
Multichannel Marketing Vital to Brand Success
Common advice is that a typical consumer needs to see a message about 7 times before they respond (buy). Marty says that is more like they need to see it 20 times – or even more. His theory is people heard the ads on the radio and probably didn't buy immediately. However, when they were retargeted. They may see a Facebook ad, a Google ad or something from an affiliate. Then they might get an email. These multiple exposures are what help drive a sale.
At the peak of this campaign he spent $100k a week on radio ads to generate $60k in direct revenue. Without the other channels they would've lost money. If you look at the graph it shows that the more he spent on the radio budget the more it lifted sales from affiliates.
Takeaway for Affiliates
The takeaway for affiliates? Look for brands who have multi channel campaigns to promote. These brands will drive more awareness, revenue and higher commissions for you. Look for ways to extend the marketing that the brand pays for.
Takeaway for Brands
Take time and budget to test and find your ideal audience. Run ads to that audience and find a celebrity who aligns with that audience and has a solid story that aligns with your audience and brand. Next, bring on affiliates to help you reach an even broader audience. Don't stick to just one channel, market across many channels.
Or, another approach is to take a loss up front and make your profit with continuity sales. A specific example he gave is Proactiv. They spend $30 million on TV ads and generate $10 million in direct sales. They make all their money on the back-end.
It is refreshing to see a brand that appreciates affiliates! Also, this must've been a very fun campaign to run!