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Archives for July 2005

Directions to the Affiliate Marketing BBQ – Sunday, August 7

July 31, 2005 by Shawn Collins

The Affiliate Marketing BBQ in New Jersey is taking place next Sunday at 2 PM.

If you wish to attend and have not been in touch with me, please shoot me an email at shawn (at) affiliatetip.com with your name and the number of people coming.

I’ll be supplying all of the drinks, meat, etc. – guests are welcome (but not required) to bring a side dish or dessert.

The address is 49 Rutherford Road, Berkeley Heights, NJ 07922. Any questions, call 908-522-5574

Here are driving directions from within NJ:

– Exit 14 on the New Jersey Turnpike to 78 West
– Take exit 43 to New Providence/Berkeley Heights
– Bear right at Diamond Hill Rd and go 0.4 miles
– Turn left at Mountain Ave and go 1.1 mi
– Turn right at Snyder Ave and go 0.2 mi
– Turn left at Coolidge Dr and go 0.1 mi
– Turn right at Rutherford Rd (house is on the left) and go 0.1 mi

So far, we’ve got a crowd of about 20 – mixture of affiliates and affiliate managers. Feel free to bring family and friends (if they can stand all the geeking out about affiliate marketing).

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Filed Under: Affiliate News

If Affiliate Marketing Were Easy, Everybody Would Be Doing It

July 30, 2005 by Shawn Collins

The following is what Ely Asher of the Sins of… or Achievements of a Corporate Stupidity blog had to say in response the the question, What is wrong with affiliate marketing and how can it be improved?

It’s amazing, but I just published an entry on this topic on “Sins of… or Achievements of a Corporate Stupidity” blog.

In short, it’s a simple math. There could be people who do well, but there are too few of them. The rest of us have to hit the dust.

Suppose a merchant gets in 1 year 1600 affiliates as some affiliate engines suggest. How much he will make? Let, say, $50,000 a month — quite a hefty amount, isn’t it?

Now do the math. If he pays all these money to his affiliates, each of them will get on average $50,000/1,600 = $31.125, yes, 31 dollar and 12 and a half penny a month.

Of course, this calculation uses pretty much a dotted line for estimates, but in essence, the message is clear: it’s very tough to sell on Internet, even if you sell your own merchandize, why do you think selling for mere 10% of that money will be any easier?


How would you answer the question, What is wrong with affiliate marketing and how can it be improved? There are no right or wrong answers – just opinions that can help improve the industry.

The author of any response that is published at affiliatetip.com or affiliatesummit.com will receive a limited edition “It’s an affiliate thing, you wouldn’t understand.” t-shirt.

Share your thoughts now at http://www.surveymonkey.com/s.asp?u=56601070891

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Filed Under: Affiliate News

Ask Shawn Collins: Affiliate Manager Pay Scale

July 29, 2005 by Shawn Collins

Q: We have several parts of our business we’d like to affiliatize… and we’d like to hire an external Affiliate Manager. He works on several projects, so this would be part-time for him (at least what he does for us). We have NO idea how to pay the guy. Any ideas? Fixed monthly fee? Straight percent of sales (the sites he’ll manage all will sell something online)? Combination?

Shawn CollinsA: The first issue to consider is the experience in affiliate marketing and track record of the person you are going to hire as the affiliate manager.

I would caution you to have somebody launch and manage an affiliate program when they are part time, as it’s a channel that needs a great deal of care and attention.

Anyhow, in order to get an experienced affiliate manager to run your affiliate program on an outsourced basis, you will generally have to compensate them either on a flat retainer or a combination of retainer and performance.

As far as typical earnings for an affiliate manager, I surveyed over 130 affiliate managers for the AffStat 2005 Report and compiled some data on annual salaries for affiliate managers.

I asked the affiliate managers, “What is your annual salary (including incentives and bonuses)?”

Less than $40k 21%
$40k to $50k 14%
$50k to $60k 12%
$60k to $70k 6%
$70k to $80k 13%
$80k to $90k 8%
$90k to $100k 6%
$100k to $110k 4%
$110k to $120k 6%
More than $120k 10%

This should give you a feel for the rates out there.

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Filed Under: Ask Shawn Collins

CPAEmpire Launches a Rewards Program for Affiliates

July 28, 2005 by Shawn Collins

Starting on August 1st, affiliates of CPAEmpire will be additionally compensated for the traffic they are sending to participating campaigns.

CPAEmpire has announced their Thank You Affiliates(sm) Rewards Program, which will provide affiliates with an opportunity to earn Visa Gift Cards in various denominations based on their revenue productivity.

As far as I know (and don’t be shy about correcting me), this is the first formalized rewards program of it’s kind for affiliates.

The way it will work is that at the end of each month, they will tally up affiliate’s revenue and automatically send them their Visa Gift Card.

Interesting way to differentiate from the competition. I wouldn’t be surprised to see this catch on.

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Filed Under: Affiliate News

MyAP Raises the Stakes in the Affiliate Network Game

July 27, 2005 by Shawn Collins

There is no longer a Big 3 in affiliate marketing if KowaBunga Technologies has anything to say about it.

WOW

In the past, when discussions of affiliate networks took place, there was inevitably a reference to the Big 3 (CJ, LinkShare and Performics).

However, KowaBunga just made an announcement that is sure to have an impact on the plate tectonics of affiliate marketing.

As of June 27, “The MyAP software has increased in price from the $995 setup and $50 per month to no setup fee and $2,000 per month. This is due to new packages which now include many modules and reflect a change in our target market.”

This change in pricing will not affect existing customers. They will continue to pay their regular monthly fee. This price increase is for new MyAP clients only.

I think this move makes a lot of sense for MyAP. After all, since the launch of version 8 of MYAP, they have rivaled the services and functionality of the Big 3, but their pricepoint was so low that they were not taken seriously as a contender.

For companies that are looking for an economical option, there’s still Affiliate Clicks, which is essentially MyAP lite.

The new target market? I’m thinking it’s the pool of merchants that are shopping for a top tier affiliate solution – the neighborhood that has long been exclusive to CJ, LinkShare, and Performics.

Big 4, anyone?

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Filed Under: Affiliate News

Share and Share Alike in Affiliate Marketing

July 26, 2005 by Shawn Collins

The following is what Chris Sanderson of AMWSO had to say in response the the question, What is wrong with affiliate marketing and how can it be improved?

Firstly a lack of knowledge sharing, which is understandable, but ultimately holds people back.

If there were more affiliates sharing tips, ideas and ways to do things then we would see more and better affiliates, with better ways of adding value to the transaction chain.

Naturally it’s not considered to be in a good affiliates best interest to help train up potential competitors.

This leaves the work of training affiliates squarely on the shoulders of the Affiliate Managers, and then it comes down to a time, effort and return equation, of how much time can an AM spend on each new affiliate to get them to get beyond the basics.

There are a lot of “Affiliate Manager” Training courses starting up now. Perhaps what is needed are more affiliate focused training sessions done in collaboration with merchants and key affiliates, something Andy Rodriguez and I were chatting about the other day, especially outside the USA in growing markets such as APAC and Europe.

Secondly a lack of sharing, didn’t I say that already, but this time from Merchants, I often see a lack of trust between merchants and affiliates “How will this person use my content”, “how will they use my product data”, “will they steal my ideas”, “will they create competition to me”, as many others have said, Merchants need to look at affiliates as Sales Partners, not anonymous faces in the crowd.

Next, a lack of sharing… again. and here I know I’m guilty as much as the next person, but there needs to be more sharing between merchants and affiliate managers, sure we all share some ideas but there really as yet is no massive pool of information that everyone can dip into, as well as that always elusive affiliate marketing standards, that ultimately can only exist in an atmosphere of sharing.

Last one for the day, BHO and software based systems need to be moved to a different channel, with Ebates / BuyersPort / SAHS sitting side by side with affilates rather than on top of them everyone can benefit (assuming, where relevant, they clean up their distribution methods of course), but if Ebates really do believe they ‘add’ value and help with conversion then let them do that to the benefit of all marketing channels, and not obliterate the traces of where those sales first came from.

Can’t remember if it was Brian Littleton or Jeff Doak who first floated that idea, but it’s a good one, but one only the Networks can resolve.

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Filed Under: Affiliate News

Ask Shawn Collins: RSS and Affiliate Programs

July 25, 2005 by Shawn Collins

Q: With the emergence of RSS Feeds, do you think that affiliate marketing will catch on to this? I do not see how affiliates would want to add additionally technology to their sites which would complicate tracking and compensation. What do you think? Is there great potential for RSS Feeds in the affiliate channel?

Shawn CollinsA: The early adopters have been dabbling with RSS in affiliate marketing for quite a while.

As far as I can see, it’s been catching on pretty well, both with merchants and affiliates, over the past year.

Merchants are using it both to communicate information to affiliates, as well as to share content and information.

There are a number of examples of blogs/RSS and their uses in affiliate marketing in the Open Directory.

One barometer of the interest in RSS in the industry is that when there was a panel on RSS and blogs at Affiliate Summit 2005, the crowd was standing room only.

I expect the uses of RSS to become more advanced, and for affiliate managers to utilize RSS to communicate with their affiliates to be for more commonplace in the near future.

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Filed Under: Ask Shawn Collins

Affiliate Marketing Predictions from 2000

July 24, 2005 by Shawn Collins

I was just looking through some things I wrote in the Affiliate Metrix report, which was a precursor to the AffStat Reports.

Businessman looking at his alarm clock in horror

The Affiliate Metrix report was written in late 2000 and came out in early 2001. Below are five predictions I made way back when.

Shift of Power
The most popular model in affiliate marketing is the Pay Per Sale model, and that will remain unchanged. However, by 2003, the Pay Per Click model will be extinct, and the Pay Per Lead model will play a much larger role in the industry, as community and content sites awaken to the potential of membership recruitment through affiliate programs.

This one is pretty spot on, as far as the per click affiliate programs of old, which fell out of favor due to rampant fraud. Of course, Google AdSense come along and gave the model a new life.

Downsizing Affiliate Networks
Affiliate programs will be shifting more towards the manual approval of new affiliates, and it will not be uncommon for programs to place caps on membership. This will result in far higher active affiliate rates.

Bear in mind, nearly everybody was on auto-approval of affiliate applications back then. Times have definitely changed – manual approval is the chosen course for 77% of affiliate programs these days, according to data I collected for the latest AffStat report.

The caps on membership seem to be increasingly popular, too. While folks used to strive for 100,000 affiliates back in the 90s, many affiliate managers tout their lean and mean approach of limiting their program to hundreds to a couple thousand affiliates.

Boutique Affiliate Solution Providers
The realization that affiliate marketing operates on the 95/5 rule (95 percent of activity is generated by five percent of the affiliates) will result in the creation of specialized affiliate solution providers that cater more to super affiliate recruiting.

This sort of describes what Performics is doing, and the new CJ Performer program is similar to this concept. And I think it could well describe the more selective CPA networks.

Outsourcing in the Future
Only sixteen percent of affiliate programs were outsourced in 2000. This number will increase by two-fold by the end of 2002 as companies determine that they are unable to locate and afford the specialized skills needed to properly manage and affiliate program.

Not quite the growth I anticipated, but as stated in the latest AffStat report, 25% of affiliate programs are now outsourced.

Affiliate Solution Provider Consolidation
This industry does not need more than three big players. 2001 will be a year of mergers and acquisitions, and one of the prominent affiliate solution providers may be absorbed before the end of the year.

OK, so it wasn’t until early 2002 that ValueClick acquired Be Free. But the Big Four did later become the Big Three when ValueClick also picked up CJ. Then again, the filed is getting more crowded by acquisition too, as KowaBunga Technologies is primed to make a run at the big fish after getting acquired by Think Partnerships.

Also, a handful of CPA networks have been snapped up in the past year. The landscape is changing for sure.

What does the future hold for affiliate marketing? Tune in here daily to keep up on the emerging trends. 😉

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Filed Under: Affiliate Resources

I’ve Seen the Future of Affiliate Marketing, and It Looks Great

July 23, 2005 by Shawn Collins

The following is what Nate Dunn of CommuniKate had to say in response the the question, What is wrong with affiliate marketing and how can it be improved?

There isn’t anything wrong with affiliate marketing. People need to remember that the industry itself in its present form is extemely new!

Sure, affiliate marketing has existed for years, however – when you embrace a current business model like affiliate marketing and extend it with new technology (the web) there is always going to be a shakeout phase.

Many companies are worried about losing market share to their competitors. Couple that with the change in mass marketing media that is occuring today and it creates a ripe environment for change.

The companies and people that develop affiliate marketing right now as it’s in its infancy will be the ones who create significant toll booths on the web as we move into more of a Mobile Commerce scenario in the next 12-24 months.

Remember – 3G, Wi-Fi and other technology that will drive e-commerce and consequently affiliate marketing are really still in the early adopter stage.

There are great things to come for those that continue to develop affiliate marketing and technology through the next wave of economic change!


How would you answer the question, What is wrong with affiliate marketing and how can it be improved? There are no right or wrong answers – just opinions that can help improve the industry.

The author of any response that is published at affiliatetip.com or affiliatesummit.com will receive a limited edition “It’s an affiliate thing, you wouldn’t understand.” t-shirt.

Share your thoughts now at http://www.surveymonkey.com/s.asp?u=56601070891

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Filed Under: Affiliate News

Where do you want to have Affiliate Summit 2006?

July 22, 2005 by Shawn Collins

We’re researching all over to secure a hotel for the next Affiliate Summit.

According to the feedback we’ve received, the majority of people want to return to Vegas and pay a range of $100 to $150 a night for the room.

Based on that information and what is available for the dates we’re targeting, the front runner is Bally’s Las Vegas ($139 a night).

On the higher end, the Mirage is available for $199 a night.

Please let me know – are you happy with Bally’s?

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Filed Under: Affiliate Resources

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