KowaBunga! Technologies, one of the biggest affiliate marketing technology vendors in the US, is launching in SA after having acquired 25% of local company, Unleash Performance Marketing.
Affiliate marketing, or performance marketing, allows companies to enter into performance-based relationships with publishers who display their online advertising and earn revenue when they refer new business. This enables companies that don`t have the finances to fund massive Internet advertising campaigns to manage and track their marketing efforts, and only pay when they get the business.
"Affiliate marketing is big business in the US and even though the South African market is small in comparison, we firmly believe that local marketers will harness the potential and embrace the technology with open arms," says Jonathan Miller, MD, KowaBunga! South Africa.
"The system measures any definable action; a sale, someone joining a newsletter, a referral, so now, instead of a cost per impression, you have a cost per click, or cost per action," he explains. "A hotel may define action as a reservation, in Macro`s case, it might be signing up for a new card, and a financial institution may measure number of sign-ups for a new service."
Even if a visitor to the site doesn`t make a purchase on his first visit, as long as the visitor returns before the cookie on his computer expires, the affiliate will get credit when the sale is made.
KowaBunga! South Africa offers two services to clients, the first of which is to provide only the infrastructure to track the link between a company and its affiliate. The second service is outsourced management, where a small company that doesn`t have the in-house skills to set up an affiliate program outsources to KowaBunga! to manage these relationships.
"This gives you a great amount of awareness," says Miller. "If you have a thousand affiliate sites, every time they get seen, that reinforces your branding as well. Most companies that have the money for a branding exercise want to be able to know what response their advertising is yielding."
It`s expected that more than 35% of the online business will be transacted through affiliate marketing by 2005.
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