The market was right at the time. There wasn’t much competition and I met with some local players and realized that there was a gap for a new deal specialist. Groupon entered South Africa a month later and we had to stop and consider for a moment whether we wanted to go head-to-head with them, but then based on my experience from running a similar company in France, we decided that we could actually ‘live next to’ Groupon. The few players that were already here were doing well, so there was clearly an opportunity.
What is your view on the ‘daily deals’ market and where do you think it is heading?
Over the last twelve months, thirty players have entered the market. It is crowded, especially in Cape Town. Johannesburg a bit less so. In the past few weeks we have seen two deal sites, Dealio and Zapon, exit and I think we will see this continue. There will be more and more concentration and eventually there will be between 3-5 players left in each of the major cities. This has already happened in the US and in Europe. Our approach at CitySlicker has always been to first build up good scale in one city before we expand to the next, and this has helped us to gain and maintain a strong position in the market. We are now a key player in Cape Town and Johannesburg. We are attracting thousands of new subscribers every week in each of those two cities and can safely plan our launch in Pretoria and Durban.
What are the main drivers/reasons for CitySlicker to work with AdMarula?
I have gained experience from working with affiliate networks abroad, and when we started CitySlicker we couldn’t find a network here in South Africa that could run a program the way we wanted to. So we were very happy to see AdMarula set up on a similar ‘mold’ as what we were used to in Europe. As an advertiser on AdMarula, we have the ability to see which affiliates want to work with our program, we have the control to approve or deny those applications and so it is completely transparent. We also know exactly what results we are getting and from where. In addition we are able to openly communicate with our affiliates through AdMarula’s platform. It’s exactly what we wanted and over the longer term this is a much more sustainable solution than running the program ourselves.
What, according to you, makes a good affiliate program?
A good affiliate program is one that is profitable for the advertiser and the affiliate. This model will not necessarily work for all companies, as the payouts are directly related to your margins. Affiliate marketing is not necessarily always the cheapest form of advertising, but it is certainly the most efficient in terms of how and where you spend your money. It is also essential that behind all of this there is a good, solid and transparent platform that deals with the tracking and reporting.
Why should companies include affiliate marketing in their online strategy?
It’s performance based. My experience with CPM advertising has not always been very good, whereas you know exactly what you are paying for when you run a CPC (cost-per-click), CPL (cost-per-lead) or CPA (cost-per-acquisition) program. This means very little risk to the advertiser as there is no big financial commitment needed upfront. This is true for companies who have a large online media spend, but also for start-ups and small businesses: affiliate marketing is great as you constantly stay in control of your spending and pay for results only.
Is there any advice/tips you would like to give to potential affiliates on what they should think about when participating in an affiliate program?
They have to know their audience as they ultimately need to match the program with the right audience. It’s not just about the payout. If you take CitySlicker as an example, we want an audience that is local and that regularly consume lifestyle products. We always have this in the back of our minds when we screen affiliate applications and look at their websites/blogs – and we can see it in the results. A website is still the obvious channel for driving traffic, but newsletters can also be very effective with the right program – so I would suggest to affiliates to try different things until they find something that works well.
Finally, what should merchants/advertisers think about before considering running an affiliate program?
Think carefully about your payout structure to affiliates. What is a lead or a new customer worth to you? Ultimately affiliates want to make money, so they will choose the programs that they think will deliver the best results. Our program has been up and running on AdMarula for a few months and so far we are very happy with the results. This is why we are increasing our payout per lead to R20 over December. We believe that this will incentivise our affiliates to push our offers even more over the festive season, meaning an increase in sales for us and some extra commission for our affiliates. Everybody wins!