T-Mobile is one of first advertisers to run a 1-minute video ad.
The Google-owned video site also drove roughly 30% of KontrolFreek’s traffic last year.
Online-only video game accessories retailer KontrolFreek says shoppers clicking from YouTube generated about $1 million in sales last year, about 20% of its overall revenue. YouTube also helped drive about 30% of its site traffic.
That’s thanks to the homegrown YouTube affiliate program the retailer developed four years ago, the retailer says.
The program grew out of CEO Ashish Mistry’s discovery via Google Analytics that a number of consumers had come to the site from YouTube. Mistry quickly found that some consumers, “gaming commenters” as he calls them, were reviewing the retailer’s products. And some of those commenters have massive followings. For example, one named AliA has more than 4 million followers of his YouTube channel.
After contacting those commenters, Mistry began occasionally sending those video game mavens products for them to review. KontrolFreek gives each commenter a unique coupon code for a 10% discount to publicize to followers, and the commenter receives a 10% commission on each of those purchases.
The program is simple, Mistry says. “We let other people create the content, which lets us focus on our business,” he says.
As the program grew—it now has about 110 affiliate commenters, each of whom has at least 50,000 YouTube followers—the retailer introduced a four-tier system, based on how many followers a commenter has and the volume of sales produced. As affiliates move up the tiers, their commissions rise and relationships with the retailer grow more intimate. For example, KontrolFreek regularly sends the 10 top commentators product prototypes for feedback, hoping to improve product design before introducing a new item.
Since its launch, the affiliate program has rapidly grown. The first year it accounted for about $10,000 in sales, Mistry says. The next year that revenue grew to roughly $100,000, then $300,000 before reaching $1 million last year.
“Videos have become a key part of our marketing mix,” Mistry says.