Shawn Collins' Blog

Affiliate marketing and other stuff from Shawn Collins, co-founder of Affiliate Summit.

Archives for December 2005

You are the Future of Affiliate Marketing

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In just a few weeks, Affiliate Summit 2006 will be taking over Las Vegas, and one of the many highlights promises to be the panel on the future of affiliate marketing.

The moderator for the panel is Peter Figueredo, CEO of NETexponent, and the panelists are…

  • Todd Crawford, VP of Sales, Commission Junction
  • Steve Denton, Senior Vice President Client Development, LinkShare
  • Rob Jewell, CEO, Gratis Internet
  • Beth Kirsch, Group Manager, Affiliate Marketing, Lowermybills.com
  • David Lewis, President, 77Blue
  • Joe Speiser, Co-Founder, AzoogleAds

Peter has made a public call for issues to be discussed. If you’d like to add a topic to the chatter for this panel, submit your thoughts at http://www.revenews.com/peterfigueredo/archives/001248.html#comments

Has CJ Been Reading the Art of War?

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Jeff Molander reported yesterday that Commission Junction is kicking AzoogleAds out of the CJ network.

While the reason given from CJ in removing AzoogleAds was that AzoogleAds was not compliant, there is speculation whispering about that CJ considers MPORT (a relatively new affiliate network from AzoogleAds) as a competitor – if not now, perhaps in the future.

I’ve got to wonder if the writings of Sun Tzu are being circulated around Santa Barbara. One lesson from the Art of War is…

To secure ourselves against defeat lies in our own hands, but the opportunity of defeating the enemy is provided by the enemy himself.

In other words, give them enough rope to hang themselves through strict enforcement of the CJ terms.

Not only does that cut off a revenue source for AzoogleAds, but it discredits them, as it plants a seed in the minds of affiliate marketers about the business practices.

Also from Sun Tzu…

To fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking the enemy’s resistance without fighting.

Beat them down in the war of perception before you have to compete in the marketplace.

Gordon Gekko and Pareto’s Principle Intersect in Affiliate Marketing

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The following is what Vikram Vora of Shaadi.com Matrimonials had to say in response to the question, What is the Future of Affiliate Marketing?

In Affiliate Marketing, the 80 – 20 rule applies (i.e. 80% of your revenue comes from 20% of your affiliates).

It is advisable to work with a selected group of affiliates and maintain your relationships with your exsisting affiliates, at the same time build new relationships. It is a continuous process, and a challenging task for todays affiliate manager.

You cannot expect your affiliates to perform without them having constant support from the merchant with respect to ideas, creative etc.

From the view point of affiliates as far as Cost per Sale Programs, where conversion happens, after the user is repeatedly driven to the site, affiliates need to exercise patience for revenues to be generated.

The first 3-6 months do not result in much of revenue generation, but once revenues are generated, they get better with time, and compensate the affiliate for the lull period. Few affiliates persist in the program to experience the Snow Ball Effect, where revenue builds upon itself.

Normally, affiliates equate the revenue with the opportunity cost of their property. Little do they realize, that they are getting an entire infrastructure, probably worth much more than millions of dollars in investments free of cost, and they can benefit directly from a share in the revenues.

Along with the investment, they also get to leverage the brand equity of their merchant. From the view point of a merchant as far as Cost per Sale Programs, where conversion happens, after the user is repeatedly driven to the site, managing an affiliate network is like maintaining an entire sales force.

The merchants have to strive to remain in constant touch with their affiliates and ensure that relationships are formed. They continuously have to provide tools that will aide the affiliates in promoting their brand.

Typical challenges that a merchant faces are:

  1. High attrition.
  2. Issues such as cookie stuffing, parasitic behavior of affiliates.
  3. Slow conversion affiliate marketing, as it has been proven to potentially lower cost of acquisitions as compared to other online drivers, such as paid placement and media buys, will remain and grow.

To summarize, affiliate marketing can be compared to a investment made in a stock. It always gets better with time.

Ask Shawn Collins: What is Affiliate Marketing?

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Q: I have two questions for you – what is an affiliate program on the Internet, and when might an affiliate program compromise the quality of search engine results?

Shawn CollinsA: According to Affilipedia, an affiliate program is when a merchant who pays a commission to a third party for generating clicks, leads, or sales from a graphic or text link located on the third party’s (affiliate) site.

As far as affiliates compromising the quality of search engine results, there are two types of results to consider.

There are the natural results, where the search engines always aim to provide the most relevant results. Some affiliates use black hat methods to get into the natural search results, which serves nobody but the affiliate.

Fortunately, the search engines are clamping down on the junk, which should discourage future affiliates that hope to game the system.

As far as the paid results in the search engines, I suppose the quality of the results depends on whom you ask. Since it’s paid placement, the advertisers are able to target keywords and show up under certain searches. This is not unique to affiliates by any means.

If you look at it from a merchant perspective, it’s something that needs to be addressed – will you permit affiliates to bid on certain terms to promote your program or not?

Affiliates Should Promote Free Shipping Deals Right Now

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It’s the most wonderful time of the year for affiliates. Sales for affiliates always multiply in the run up to Christmas, but it’s almost over.

The biggest sales day of the year is expected to be Tuesday, December 13 or “Super Tuesday.”

“Super Tuesday” for online holiday shopping will be 12-1 p.m. EST Dec. 13, according to ScanAlert, a Web security company.

So you’ve got to get your best offers in front of your site visitors and newsletter readers right now, but what are the best offers?

Research from BizRate indicates that 4 out of 5 online customers say free shipping is an important factor when deciding where to shop.

And according to ABC News, December 14 is the deadline to ship Parcel Post. This is generally the free shipping option with many online retailers.

So get those free shipping offers out there quick. Some free shipping deals available through affiliate programs right now include:

More free shipping deals at http://shopping.babylounge.com/free_shipping.php

Ask Shawn Collins: Big Affiliate Networks for Small Budgets

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Q: My company is looking to start our affiliate marketing program, but I am unsure of which provider to go through. We don’t have a very large budget to use CJ for example. We are looking for access to the network of affiliates which are similar to our services.

Shawn CollinsA: There are a handful of quality affiliate networks out there for those with a modest budget. I’d suggest taking a look at Affiliate Clicks, DirectTrack, shareasale.com, and
Share Results.

The pricing and features vary, so I’d suggest you take a look at each one and take a test drive.

  • Affiliate Clicks is essentially the lite version of MyAffiliateProgram and enables merchants to gain access to their Kolimbo network.
  • DirectTrack’s merchants can tap into over 153+ CPA Networks (also powered by DirectTrack), which can promote offers being run by the merchants. Any type of offer can be CrossPublished including CPS, CPA, CPC, CPM, or hybrid payouts.
  • shareasale.com has been around since 2000 and has a loyal network of affiliates that really value the hardline stance of shareasale.com against affiliates that use badware.
  • Share Results is a relative newcomer to the industry, but they’ve been making a great name for themselves and bringing on quality names.

As far as finding affiliates similar to your services, try asking the sales people at each affiliate network for some examples of affiliates in their network that would make sense for your affiliate program.

Bear in mind that not all of the best sites in your niche are necessarily affiliates already. So no matter which direction you go, you ought to be prepared to recruit targeted affiliates for your affiliate program, and not just sit back expecting the network to do it.

Ask Shawn Collins: All in One Affiliate Solutions

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Q: I’m looking for the best company who can offer us all the stuff needed to run an affiliate program. We need the hosting, the buying form, the credit card processor, the control panel for affiliates, and the affiliates pay out. I think CCBill does it all, but I cannot find any other company. Do you know any?

Shawn CollinsA: While it sounds attractive to have an all in one solution, it’s not necessarily the best or most cost efficient.

There are a handful of solutions out there that fit the bill, such as ClickBank and PayLoadz. In the case of these two, they are only available to sell digital products.

Personally, I look at the all in one solutions as being the affiliate marketing equivalent to those combination machines that print, copy, fax and scan. Yeah, they do it all, but they don’t do any of these functions great.

There are a handful of affiliate program tracking technologies I would recommend, including Commission Junction, LinkShare, and ShareASale.

I would suggest going with one of these companies and then getting your own merchant account to process the credit cards.

If you go with an affiliate marketing company that doesn’t handle check cutting to affiliates, or you would prefer to handle it yourself for some reason, you can go with a payroll company like ADP or Paychex.

Performics Unveils Year-Over-Year e-Commerce Sales Data

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New York, December 8, 2005 – Performics, the performance-based marketing division of DoubleClick Digital Advertising Solutions, today unveiled sales data and trending information on the e-commerce holiday shopping season. The four “Cyber Mondays” that occur between Thanksgiving and Christmas are the peak volume days during the holiday online shopping season. Cyber Monday 2 and Cyber Monday 3 consistently generate the highest volumes. Therefore, December 5 and December 12 are likely to be the largest sales volume days of the 2005 holiday season. Cyber Monday 1, or the Monday after Thanksgiving, consistently outperforms the bricks-and-mortar champion Black Friday.

cyber-monday

“These trends provide marketers with the foresight to anticipate peaks in sales volume and prepare accordingly,” said Chris Henger, vice president of marketing and product development at Performics. “Online retailers can make more specific predictions by considering their product mix, and this year, retailers should recognize the impact of Cyber Monday 4 due to the extra time before Christmas, which falls on a Sunday.”

Two primary variables can impact these trends from year to year: whether Thanksgiving falls early or late in November and the day of the week on which Christmas falls. In 2005, for example, many e-commerce sites can still offer guaranteed shipping on Cyber Monday 4, December 19, because adequate time remains prior to the Christmas holiday for many to guarantee delivery. This could result in a higher level of e-commerce sales on Cyber Monday 4 than in previous years. See the editor’s note at the close of this news release for directions to access a graphic/chart that details sales peaks on Cyber Mondays and other days throughout the holiday season. Figure 1 below outlines the percentage increase in year-over-year sales from 2004 to 2005.

Action items for marketers:

  • Consider product assortment: The nature of products sold will have an impact on the sales peaks of individual marketers. Personalized, monogrammed or other custom made products, for example, are more likely to peak earlier. Low consideration or perishable items such as gift cards or food, however, are more likely to peak later, on Cyber Monday 3 or 4.
  • Understand the promotional strategy and shipping offers. Early in the holiday shopping season and through Cyber Monday 3, marketers can achieve substantial results with free shipping. Different promotional strategies, such as “buy two get one free” or dollars off promotions, should be considered.
  • Prepare operationally for the peaks. Although marketers tend to ramp up prior to the holiday season, this data can provide more specific predictions that can help day-to-day planning efforts for call center staffing, inventory, logistics, site traffic and other considerations.
  • Slow down on Saturdays. Each week during the holiday season, the data shows a dramatic spike on Monday, followed by a gradual decrease throughout the week and ending with the softest sales volume on Saturday. Sunday begins a slow climb that spikes on Monday.

Methodology:

This trending analysis is based on Performics’ year-over-year e-commerce sales data for online retailers. Performics tracks e-commerce sales volume in conjunction with the management of affiliate and/or search engine marketing programs for more than 300 advertisers. The data have been normalized to mimic the offline metric of same store sales and to account for growth in Performics’ client base to ensure the data better reflect overall trends in e-commerce and organic industry growth.

About DoubleClick Digital Advertising Solutions
Performics is the performance-based marketing division of DoubleClick Digital Advertising Solutions and is a leading provider of Affiliate, Search and Data Feed Marketing Solutions.

DoubleClick Digital Advertising Solutions, an operating unit of DoubleClick, provides technology and services that empower marketers, agencies and Web publishers to work together successfully. Its focus on innovation, reliability and insight enables clients to improve productivity and results.

Since 1996, DoubleClick has empowered the original thinkers and leaders in the digital advertising industry to deliver on the promise of the rich possibilities of our medium. Today, the company’s DART and Performics divisions power the digital advertising marketplace. Tomorrow, it will continue to enable clients to profit from opportunities across all digital advertising channels as consumers worldwide embrace them. DoubleClick has global headquarters in New York City and maintains 21 offices around the world to serve its more than 1500 clients.

Who would you like to meet at Affiliate Summit?

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Affiliate Summit attendees can now start choosing who they’d like to meet at Affiliate Summit 2006 during the Speed Networking session.

The Speed Networking requires advance registration, and this must be completed by January 3, 2006.

Here is how you can do it:

  1. Log-in to http://www.NetworkingMatch.com/AffiliateSummit
  2. Update your ‘Profile’ or create one if you haven’t, yet
  3. Click ‘Submit Meeting Requests’

The Speed Networking session is on Sunday, January 8 from 8 PM to 10 PM in the Bally’s Las Vegas General Session room (combined Gold/Silver Ballroom).

Why participate?

  1. Speed Networking is a lot of fun.
  2. It’s the fastest and easiest way to meet the right people.
  3. We even make it easy to follow up and make business happen.

Also, we’ve created a Guide to Networking for Affiliate Summit attendees.

This guide features responses from affiliates, merchants, and networks on what they hope to get out of networking.

Get the guide at http://www.affiliatesummit.com/Guide-to-Networking.pdf

We look forward to seeing you there!

Don’t forget to bring lots of business cards – http://www.affiliatesummit.com/cards

Affiliate Marketing Invades France

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The following is what Michele Ramponi of 1ère Position had to say in response to the question, What is the Future of Affiliate Marketing?

Affiliate marketing is only really starting now in Europe, and especially in France. I will only talk about the French market: affiliate companies are taking market share and getting their network set, such as First Koffee, bought by Zanox.

Other market entry to be followed is Value Click, under it’s CJ brand, that is only starting in France, but with a valuable network.

On the consumer side, we feel a real need since half a year of affiliate solutions in order to empower the online strategy of our clients.

In the future I think affiliate will become completly integrated to any online strategy, driven by its performance marketing aspects.

How would you answer the question, What is the Future of Affiliate Marketing? There are no right or wrong answers.

The author of any response that is published at affiliatetip.com or affiliatesummit.com will receive their choice of one of the following:

  • Size: small ‘It’s an affiliate thing, you wouldn’t understand.’ t-shirt
  • Size: medium ‘It’s an affiliate thing, you wouldn’t understand.’ t-shirt
  • Size: large ‘It’s an affiliate thing, you wouldn’t understand.’ t-shirt
  • Affiliate Summit coffee mug
  • Affiliate Summit optical mouse for a notebook computer

Share your thoughts now at http://www.surveymonkey.com/s.asp?u=281531467120