Scott Hazard: The Performer

Despite having many talents that often thrust him to the forefront, Hazard is a modest man who typically shuns the spotlight.

For more than three years he’s been an extremely active and vocal member of several online affiliate marketing forums. While many of his closest industry friends often refer to him by one of his message board handles, he prefers not to give away his online identity publicly so that he can continue to voice his strong opinions about unethical practices without fear of repercussions.

But Hazard stresses that he’s not hiding behind the anonymity of the message boards and that he never says anything in those forums that he wouldn’t express face-to-face. Rather, the fear is that if the offending players in the space knew his real name and his websites, they might retaliate by using their technical know-how to attack his sites, which are his livelihood. Other affiliates say they worry about being physically harmed or having someone knock on their front door. He agrees that type of threat is within the realm of possibility.

Still, Hazard dismisses the notion that some message boards can be vicious at times. For him it’s been a wonderful community where he’s been able to develop some extremely close friendships – which are a very important component of doing business for him. Because he works from home – like many other affiliates – he’s somewhat isolated from the typical, everyday office interaction and considers the message boards his water cooler, albeit an online version.

He appreciates all the help and advice he’s often received – and given – as a huge factor in his continuing participation in these forums. The ability to log on and find answers about a merchant he’s promoting or thinking of promoting is priceless. Approaching the posters on these boards with a sense of humility and respect means that forum members will bend over backward to help you, Hazard says.

But it’s not like everyone is about to divulge all their secrets. He likens the amount of information that affiliates are willing to reveal to each other to the Seinfeld episode where two magicians are having dinner. However, in the popular TV show, the magicians spend the entire meal trying to one-up each other, and most affiliates, Hazard notes, are just the opposite – they don’t give out any information, including the most basic stuff – like the names of their websites. He laughs at that idea, calling it a very cool dynamic.

And he’s no different when it comes to disclosing specific information about his business. He operates approximately 30 to 40 websites that are in the retail space and focus primarily on apparel, but he’s hesitant to give out any more details. But when it comes to his latest site – CouponPouch.com – he’s not shy about talking it up.

The site launched in April and is his first venture into coupons. He always thought there was a large opportunity in that area – especially since he’s got some friends that are every coupon-intensive people, many of whom he describes as toting around a tickler file of coupons that weighs two pounds.

In order to spread the word about CouponPouch.com, Hazard is taking a multifaceted approach. There’s lots of local advertising in many parts of the United States. He’s using newspapers in each area to get the word out. He’s doing a lot of online and off-line promotion and focusing on viral advertising. He wants people to talk about his site and he thinks freebies and giveaway goodies (business cards, fridge magnets, hats, etc.) are a great way to do that.

Of course, there’s the Honda Element he drives around the central Florida area with the giant kangaroo on the side that’s hard to miss. He recently had the SUV professionally wrapped to display the CouponPouch.com logo. And if you spot his vehicle parked and stop by to say hello – he’ll give you a free gift. However, don’t try and pull him over on the road for the free gift. He’s a gung-ho marketer, but not at the expense of on-the-road safety.

None of these marketing ideas is random. Hazard says he lies awake at night thinking about these kinds of things. He’s got a pretty good idea of what works and what doesn’t. And he’s learned that means striving to be independent of any single source of traffic. Although natural traffic is free and he spends money on Yahoo and Google, he stresses that affiliates need to get smart and develop marketing strategies outside of the box.

He may lie awake at night, but he bounces out of bed each morning and can’t wait to get to his computer. Hazard loves his job because it allows him to use his creative side to think about ways to bring items to market. But he can also use his logical side to structure events to bring the creative vision to fruition. He says it is the most fulfilling job he can possibly imaging having – and it’s not about the money. Yes, he admits, we all need money and money is not a bad thing, but for Hazard, it’s the satisfaction of developing an idea and then walking it through to completion that is the real joy.

He loves that, armed only with creativity, personal drive and a computer, he has the ability to compete with multi-million-dollar corporations. “They have a website. I have a website. The playing field is much more level,” Hazard says. “I can’t go to the mall and build a Nordstroms and sell wares, but I can sit at the computer and create a website to sell wares.”

And not everything is a success. If something doesn’t work, he’ll shuck it and move on. He has lots of ideas and spends time cruising through the networks and looking at websites searching for new ideas and things that spark his creativity. He checks many of his new pay-per-click ideas using what he calls the $200 rule. That means he spends a day or two to set up a website or Web pages, sends some PPC advertising to it and when he’s spent $200 he evaluates whether it’s working or not. If not, he just puts it aside and moves on.

He may have an easy time turning off marketing campaigns that aren’t performing, but he admits that it’s not as easy for him to turn off work – especially since he works from a home office. He’s thought about renting an office nearby and trying to do the 9 to 5 thing, but knows that he’ll end up back in front of the computer at home in the evenings anyway, so he’d rather not waste the money.

Hazard has a love/hate relationship with his computer. “The computer is always there,” he laughs. He works about 60 hours a week and says that often he has trouble distinguishing what day it is.

He springs out of bed around 6 a.m. and starts the day off with a big 16-oz. coffee, while he checks his stats from the previous day and scans the Internet for news. A self-admitted Yahoo pool addict, Hazard will usually get in a few games before getting to his real work in the morning. He also plays Yahoo pool in the late evenings when he’s wrapping up for the night.

His No. 1 piece of advice to affiliates is to stay physically active. He says he’s gained weight since becoming an affiliate three years ago and stresses that work-at-home affiliates need to force themselves to exercise and stay active. But at least he’s quit his 20-year smoking habit.

In an effort to kick back a little more, he just bought a fishing boat after not having owned one in eight years. For the avid bass fisherman it’s a wonderful way to relax. So is music. He recently attended a Willie Nelson concert and says it was a wonderful feeling to have a night unplugged, where he just sat back 40 feet from the stage in a small auditorium and drank a couple of Heinekens and listened to two and half hours of Willie.

The youngest of seven kids, Hazard loves music. He plays the drums and sings. He recently moved from belting out tunes from behind the drum kit to center stage where he now fronts The Quarter Mile Band. They play straight-up rock tunes – covers and about a dozen originals, half of which Hazard wrote. After an 18-month hiatus and some bad luck with a string of bass players, the band is now practicing once a week and working toward putting out a CD or getting their material out in MP3 format.

Still, it’s very difficult for him to turn his brain off. The wheels are always turning with ideas and he’s always looking for better ways to do things. He’s been like that as long as he can remember.

One way to improve things was to go to college. At 29 he quit his job selling Hondas near his hometown of Alexandria, La., and enrolled at LSU with the goal of becoming a certified public accountant.

Although he was making a good living selling cars, he hated the business. One of the reasons was that he’d often spend several weeks talking with a potential customer, only to return from a day off of fishing and find that customer had come in and bought a vehicle and that he’d lost that commission to another salesperson. There weren’t any ill feelings; he was just tired of being in commission-only sales and hustling people for a living.

But accounting didn’t suit him either. After just two semesters, Hazard decided that being a CPA wasn’t for him. He spoke with an adviser and took some aptitude tests that showed he had strong skills for becoming an attorney. Instead he decided to pursue a liberal arts degree with three minors – English (in his senior year he was the editor of the LSU newspaper); history; and speech/theater.

Four years later, with a degree in hand, he was ready to move out of the student mode, give up his part-time gig as a weekend disc jockey at a rock station in Alexandria and get back into the world of full-time employment.

So, he moved to Miami to direct at a theater in South Beach for the summer. He starved, had a great time and then went to work for a marketing company in Fort Lauderdale. That company immediately sent him to work on a project in New Orleans for three months. When he returned to south Florida he pitched his firm on an idea for a jobs site. The company passed and Hazard left to start SouthFloridaJobs.com on his own in 1998.

After visiting a friend in central Florida, he made the move there in the spring of 1999 and subsequently sold his company in the fall of that year. “I’m a Southern boy and I have to move north to get back to the South,” he says.

He began doing various freelance Web design projects and then started designing an e-commerce website for a merchant in Daytona Beach. That website competed with affiliates and Hazard says “those affiliates were kicking my butt and eating my lunch.” His relationship with that merchant ended and he was forced to look at affiliate marketing.

He calls that 2003 incident the single best thing that’s ever happened in his life.

Maybe that’s because he surpassed his original income goals. Hazard pays more in taxes now per month than he originally estimated he’d make in a month and now generates between $2 million and $4 million in sales annually. He was also was named as a charter member of CJ’s Performer program in 2005.

“My affiliate endeavors have proven better than my wildest dreams,” he says.

But a big part of those dreams for Hazard also included leaving behind the rat race and having complete and total control over everything in his business. However, there’s a downside to complete control, according to Hazard, who says that often there is nobody to question your decisions or say no to you, and it’s not uncommon to get tunnel vision.

That’s where friends and forums come in for feedback. And in the end, for Hazard it all comes down to doing the right thing and having good friends.

Savvy affiliates like Hazard often have a choice to make – work extra hard to develop new methods to make money or employ questionable tactics that in the short term will increase revenue. Hazard loathes those that opt for the latter, which he believes is the easy way. He credits his mom and dad with instilling a rock-solid sense of right and wrong in him. He says that at the end of the day, when he’s brushing his teeth and looking in the mirror, he enjoys knowing that what he’s accomplished was good and right.

Plus, he has like-minded friends that will call him on his actions. He gets together with a group of four to six friends in Orlando once a month to talk about the affiliate space. These folks are not direct competitors – there’s an affiliate manager and some other merchant affiliates (but they are all in different verticals). They openly share very sensitive business information.

It’s a relationship based on trust formed over the years, according to Hazard. In the end, he likes being a key piece of what he calls the happy triangle.

“If I did something that helped someone find a shoe and in the process generated a sale and the customer and merchant are happy, then I’m happy,” he says. “If I simply find ways to cheat the merchant and I end up with money and the customer is happy, but not the merchant, then that’s not a happy triangle.”

Denied

On a cold Minnesota afternoon, affiliate marketer Connie Berg checks her email fearing the worst: a message from a dream merchant saying her affiliate application for either iShopDaily.com or FlamingoWorld.com has been denied.

You see, Berg’s sites post coupon information – a once-hot commodity now shadowed by merchant belt-tightening and recent incidences of customers getting expired or invalid affiliate-posted codes.

“No matter how much we try to convince them that 99 percent of the coupon sites are simply shopping sites that also post coupons, they don’t seem to want to give us a chance,” Berg says.

It’s certainly a frustration for Berg, still an ideal candidate with 90 percent of her traffic from direct bookmarks or type-ins and a “deal alert” newsletter going to thousands. But she’s been caught in a war between ideologies that surrounds many once-highly desired affiliate sites. Merchants are looking twice at any site that could potentially cut its profits, give the wrong idea about its brand or send an unapproved marketing message.

That’s why affiliate application turndowns extend even beyond coupon sites. Under fire are affiliate sites offering coupons, incentives, discounts, email marketing, heavy search buys, forums, downloads and even mass-market and cross-cultural appeal rather than the merchant’s defined niche.

“Five or six years ago, it was about who had the biggest affiliate program,” says Chris Kramer, media director of NETexponent. Kramer, who approves affiliate applications for The New York Times, Financial Times and others, says, “Now it’s more about ‘who is this affiliate, what are they doing and do I have to worry about what they are doing?'”

Performics, for instance, denies 20 to 40 percent of the applications it receives for programs including Bose, Eddie Bauer, Harry & David, HPshopping.com and Motorola. While AffStat 2005 found onequarter of its merchants still auto-approving applications, the buzz is that the remaining three-quarters of merchants are creating additional safeguards to determine who gets in, and who stays in.

“When we talk about this issue of merchants denying affiliates, it’s mostly due to brand sensitivity,” says Kraig Smith, co-founder of Chicago-based Media- Impressions.com. His clients include Apartments.com, Healthcare Media, HEE Corporation, LifeGem Memorials and Performics. “Many big-brand offline marketers are concerned about protecting their brand in affiliate marketing.”

After all, these days merchants can be more selective – mainly because there are plenty of affiliates to choose from.

“There’s a lot of filibustering going around about how many affiliates there are,” says Chris Henger, Performics’ vice president of marketing and product development. “There are legitimately probably 50,000 to 100,000 types of affiliates active at any point in time. While it used to be easy to stand out as an affiliate with a professional site, now you’re just one in the crowd.”

“The whole [affiliate] industry has gotten more sophisticated,” says Elizabeth Cholawsky, vice president of marketing for ValueClick, Commission Junction’s parent company. “These are real businesses with real employees working day to day to grow their revenues and customer base.”

Even Vinny Lingham, a Commission Junction super-affiliate and founder of Clicks2Customers.com, the affiliate search marketing technology provider that won CJ’s 2004 Horizon Award for Innovation, gets denied for about 10 percent of the programs he applies for.

“We’ve mainly been denied because of the fact that we’re search marketers,” he says. “From a search marketing perspective, 90 percent of the merchants realize they can’t market through search engines as well as the affiliates can.” The result, he says, is that some merchants pin search-oriented affiliates as the culprit if their own search campaigns don’t produce.

Perhaps, but Kerri Pollard, Commission Junction’s director of publisher development, says it’s more about being concerned with how an affiliate will fit into the merchant’s overall integrated marketing strategy.

“Paid search has become such a big component of all the affiliate programs,” Pollard says. “They want to make sure that whatever the publishers are doing doesn’t conflict with their own search campaign.”

Still, Lingham’s site takes top affiliate status in many programs, even globally, and Clicks2Customer’s parent company, incuBeta, is one of Business Day’s “Technology Top 100 Companies.” “In reality, if we or any other super-affiliates are not working for your company, we’re building your competitor’s business and market share instead.”

Why Deny?

Oklahoma affiliate Joel Comm has begun running DealofDay.com, a community of 125,000 bargain hunters, since he sold off ClassicGames.com to Yahoo in 1997. Three to 5 percent of his applications are denied, and the bulk of those come from financial-related merchants.

“Some merchants, like financial services, just don’t want to be part of coupon sites,” he says.

His response if denied? “I’ll just put someone else there instead,” Comm says. “There are some affiliate managers that just don’t get it, and others where the affiliate relationships are managed by the legal team – dotting their I’s and crossing their T’s. That ties their hands.”

That’s particularly apparent in the financial services arena.

“I don’t know if it’s as much price point as it is brand concern, but there is a correlation between higher price point products and brand concern; that’s not accidental,” says Peter Figueredo, CEO of NETexponent, the agency that manages the Financial Times’ affiliate programs.

NETexponent’s Kramer says one of the reasons is that financial service companies, ranging from American Express to mortgage companies, are governed by strict rules, codes and laws.

“They can’t have affiliates out there advertising ‘no-fee balance transfers’ when there really is a fee, because they can get fined,” Kramer says. “But when it comes to companies such as Financial Times, it’s more based on brand integrity. They’ve invested a lot of money in protecting and developing their brand,” and wouldn’t want “just anybody” representing that brand. Financial Times also “fits a tight demographic of highly educated, higher-income customers,” he says. “It doesn’t serve their needs to have their ads on sites where their ideal customers are not going to be.”

However, as a trend, “declines by merchants are on a case-by-case basis,” ValueClick’s Cholawsky says. “Some merchants are tiptoeing into affiliate marketing and are very restrictive. Others accept every application. We try to encourage merchants to be more inclusive, since we’ve seen that as one of the best practices. Otherwise, there is relatively little change” across the board.

Either way, the networks say tough requirements work both to the advantage of merchants and affiliates.

“Affiliates don’t want to be associated with a network that has a lot of fraud running rampant on that network,” says Danay Escanaverino, head of Global Resource Systems’ quickly growing affiliate network, Filinet.com. “If we allow fraudulent affiliates, generating bogus leads or clicks, that makes the program difficult to run for our other affiliates, and advertisers start losing faith in the program. It’s in everybody’s best interest for us to be a little bit more vigilant about who we allow in.”

Pay-per-click or pay-per-lead merchants, however, have higher rates of declines, attempting to weed out applications likely to send bogus clicks for quick cash. It’s an issue faced every day by Jonathan Miller, who approves applications for 27 affiliate programs managed by ForgeBusiness.com.

“We get inundated with affiliates trying to get into our programs,” says Miller, who since 2001 has received tens of thousands of applications, if not more. “We used to take just about anybody that signed up, but over the past year I’ve realized that things have become a lot more fraudulent and, in some programs we manage, as many as 90 percent of the applications in some periods are fraudulent.”

It’s usually only a temporary spike, made up by syndicates doing mass submissions from outside the United States, but Miller still usually denies 30 to 40 percent of the applications he receives, many of which are fraudulent.

Though common for pay-per-click or pay-per-lead sites, other merchants generally see fraud in no more than 5 percent of their applications, says a KowaBunga insider. (KowaBunga runs MyAffiliateProgram .com.) The rate of fraudulent applications often depends upon the type of merchant, the type of product, whether the merchant pays per lead or per click, and the dollar amount of commissions for average sales. “If you have lucrative offers,” Miller says, “it will be tested by forgers.”

So Miller, like other affiliate managers, is adding extra safeguards. He now has all the network fraud protections and verifies Social Security numbers and compares application info against the Whois.com registration information for the domain. Even after an application is approved, he watches for any telltale activities, such as lots of immediate clicks or changes in banking information at the end of the first month. Then, before paying out checks that are often in the thousands of dollars, ForgeBusiness.com requests not only a W-99 form but also additional proof of the affiliate’s identity, such as a faxed copy of a driver’s license, Social Security card or business license.

“We are willing to share our identity with our affiliates,” Miller says, “and we’re now requesting that our affiliates share their identity with us.”

Still, Miller says, “There is always a worry that we will be denying legitimate affiliate applications, which is why we call every affiliate that applies that makes it through the fraud software on our networks. If the affiliates can’t be contacted, then we either wait and hope to hear from them or their application is rejected.”

So while merchants of pay-per-click and pay-per-lead programs must still watch out for fake applications, ValueClick’s Elizabeth Cholawsky says – though the company hasn’t made an official statement – that she’s not seeing any more or less overall affiliate fraud than there was years ago. If the website is legitimate, the email address gets a response, and if the tax ID number checks out, then “the initial barrier [into CJ’s program] is fairly easy for a new affiliate.”

Though acceptance is easy, Commission Junction doesn’t cut a check until it’s reviewed by a “network quality team.” In June 2005, it redoubled its efforts, bringing in Cyveillance’s phishing, identity theft and corporate-brand-abuse protection software, which includes affiliate channel compliance and control features.

With more eyes on applications, Commission Junction can now relax some of its other requirements, such as denials of applications from affiliates in certain geographical areas: “We used to exclude all of Asia, all of Russia, but now we just exclude a couple of pockets,” Cholawsky says.

Meanwhile, officials at both Commission Junction and Performics say the number of applications isn’t going up, and the number of active affiliates are about the same even with new entrants (as new ones enter, old ones drop off). At the same time, the number of merchants with affiliate programs is growing year after year.

“As affiliate programs become standard, we’re starting to see it as part of every online merchant’s sales efforts,” Cholawsky says. This seems to say that the issue of perceived growth in affiliate denials isn’t a result of increasing competition for a limited number of spots.

So what is the answer? Though requirements and the number of applications remain stable, what used to slide is now inexcusable. “Three years ago you would see the ‘under construction’ symbols, and maybe that’s what kicked you out; today I’d be shocked to even see ‘under construction’ signs,” Performics’ Henger says. “We probably have a more discerning eye today as to what is a quality site that we want to let into the network.”

Other affiliate sites are being turned down because they’re missing something that could be easily fixed (see sidebar page 51).

Once you’re in the network, remember to reread your affiliate agreement on a regular basis.

“We put a lot of work into post-screening as well, checking month to month on the top sites to make sure they’re consistent with the rules we set,” Kramer says. As such, he says, affiliates are increasingly concerned about guidelines, especially regarding search or email marketing, once they get into the program. “Years ago, nobody cared about search and it was definitely a free-for-all, where you could do whatever you want,” he says. Now it’s a much different model.

These days, affiliates like Berg have to push for acceptance into the programs they want. But they are doing it.

“I’ve had some merchants that I was able to get into by really pushing it with the networks,” Berg says. “American Eagle was really hard to get into; I had to basically promise away my life that I wouldn’t do this or that. They gave me a data feed so I can post real-time products, but they were really particular about what they would allow on the site – and I follow it to a tee.” That means no coupons for American Eagle’s site and no inclusion of the words “discount,” “sale” or “coupon.”

And affiliates like Berg are learning to cut their losses.

“Sometimes I’ve actually dropped some merchants because they didn’t even want their name mentioned in the title meta tags, even when they are the only store on that page.” She’ll either find other merchants who carry the same products or chalk it up as a lesson learned. “Sometimes,” Berg says, “you get into their program, but the restrictions are so tight that you just have to walk away.”

JENNIFER D. MEACHAM is a freelance writer who has worked for The Seattle Times, The Columbian, Vancouver Business Journal and Emerging Business magazine. She lives in Portland, Ore.

Coupon Hoopla

You’ve been there. You’re at the grocery store to buy one single item. You have your groceries on the counter, your cash in your hand. But the person in front of you has a never-ending stash of coupons. The cashier enters in code after code. You start looking for an open clerk, cursing the customer ahead of you.

Well, coupons aren’t nearly as annoying online. Frugal shoppers can save money in the privacy of their own homes, redeeming as many coupons as their hearts desire. And it doesn’t slow other shoppers down one bit. Everyone wins. Especially people like Mike Allen.

Allen not only has an eye for a bargain, he loves to offer good deals to others. “I saw that coupon codes sure could save you a lot of money,” says Allen, who speaks in a slow, soft Southern accent. “But they sure are hard to find.” That’s why he decided five years ago to devote an entire Web site to online coupons. Shopping-Bargains.com features 500-plus merchants.

Coupon sites say their revenue varies widely month to month, but some gross more than $10,000 a month and the ones contacted by Revenue say they’re expecting a whopper of a holiday season. EdealsEtc says months in the fourth quarter sometimes result in six-figure revenue.

“Q4 is always good for us,” agrees Joel Comm, who runs DealOfDay.com. “But 2004 is gonna be the best year for coupons so far.”

The uncertain economic outlook combined with a long-running trend toward value shopping has created vast opportunities for affiliates to promote sales by providing coupons to people who just can’t live without them. In 2002, according to Forrester Research, consumers downloaded 242 million grocery coupons, coupons they print out and take to brick-and-mortar stores. That’s almost one coupon per American, and that’s just for groceries.

A raft of online coupon sites exist. Large sites like CoolSavings and CouponCart.com let you print coupons to redeem in offline stores. Others like FatWallet, UPromise, Spree.com, eBates and KeyCode offer cash-back incentives or rewards to shoppers. If a merchant gives an affiliate, say, a 5 percent commission, the affiliates might pass on 2 percent of that to their customers.

But even the sites that offer savings on online purchases range from small niche hobby sites to larger companies like CouponMountain, which employs eight people in Los Angeles, has 750 merchant partners and does a lot of marketing. And with about two-thirds of the US households now online, there’s still plenty of room for affiliates who can build a site that rises above the crowd.

Adam Schwartz and Craig Nelson were eating sushi in San Francisco and saw an ad on the window that read: “See our coupon on the Internet!” They thought online coupons were a great idea and started CouponSurfer in September 1998.

Brad Wilson started DealsDuJour.com with his brother Campbell in 2001. The 20-something brothers bought things, mostly electronic gadgets, online and when they scouted a good deal, they told their family and friends about it. Their hobby started as a pastime, soon blossomed into an email newsletter and then later became a business.

How many sites are devoted to online coupons? A lot. DealzConnection tries to list destinations for online bargain hunters. It lists 42 with forums, 41 that have price comparisons and 232 other bargain sites, plus 104 dead sites (not all coupon sites survive).

Site Design

As in many other areas of affiliate marketing, design is critical. Having a home page that is fresh every day is a great start. The best coupon sites list the deals in a variety of ways so that consumers can easily find what they want.

Many have current deals ranked and listed by popularity. New coupons occupy their own space; expiring coupons are placed somewhere else, so users can find deals before they’re no longer valid.

Many sites let you search alphabetically by merchant to find the store you prefer. And most have a category breakdown, so you can scan that to find a coupon for a gift for your Aunt Hilda’s birthday, whether you are looking to get her a karaoke system or a trip out of town.

Affiliates need to think more about aesthetics and the user experience. “Sites aren’t making it appealing and clean and idiot-proof,” says Wilson. “I sit my mom down. She is absolutely useless online. I see if she can make it through the user interface and if she can navigate, then we go with it.”

“A simple interface that has agreeable color schemes is important,” agrees Travis Bowman, president of EDealsEtc.com. “You also need to optimize for speed and test for speed and multi-browser compatibility. A good logo is also critical.”

But design and navigation aren’t the only considerations. Deals are ever-changing, and keeping up in the coupon biz definitely isn’t for the faint of heart.

Update Your Deals

“You cannot neglect it for one minute. You have to be on top of it,” warns New Yorker Abe Rapaport of JumpOnDeals .com “There are merchants whose coupons are expiring. Others are putting new deals out there. Customers contact us with their concerns. We have to keep up with all of them.”

Keeping up and using legitimate coupons is a full-time job. There’s nothing more frustrating to consumers than taking the time to pursue an offer that already expired. Burn your customers, and you’ll burn yourself.

“You need to link deals into a searchable database,” offers DealOfDay’s Comm.

Shopping-Bargains.com’s Allen and his wife revamped their site and hired ColdFusion programmers to help make the static site dynamic with a database that automatically schedules coupons to expire. Since they relaunched in January, keeping the site updated has been “dramatically easier,” says Allen.

“Users expect accurate and current deals,” says Allen. “They want a comprehensive listing. It’s very hard work to keep merchants happy and users happy.”

But once you have a site that is designed well and is updated regularly, you’re ready to tell people about it.

Marketing Moxie

Sites that focus on online deals must do a lot to separate themselves from the pack. Wilson says his goal is to give consumers the better things in life at a better price. The company’s motto: “Shop smart, live rich.” Wilson says it still takes a lot of work to get attention.

“Paid search can work but you really need the right metrics,” says Wilson. “Search engine optimization is incredibly competitive but it’s always worth the effort.”

Many of the affiliates contacted by Revenue simply love search engine optimization. Tagging pages properly isn’t easy, and getting someone with expertise to help can be expensive. Bidding keywords and buying PPC advertising – Google has a 5 cent cost-per-click minimum; Overture has a 10 cent minimum – are also tested tactics. But they aren’t for everyone.

“Keyword placement is too expensive for this niche,” argues Comm. Instead, he’s syndicating content. That way, his site gets double the exposure, and search engines are twice as likely to pick up his pages.

A few sites like PhatDeal.com and eDealsEtc.com say they are even considering buying offline advertising -newspaper ads, billboards or radio time in their local markets to attract traffic, a tactic described in Issue 3 of Revenue (Beyond Search Engines).

The smart coupon sites also let you sign up for an opt-in newsletter that gives shoppers links to popular deals, turning first-time visitors into repeat buyers. And many use “Tell a Friend,” which lets users click on a link and do the viral marketing for them.

“The best is when an affiliate manager recommends us to other merchants,” says Bowman. “Word of mouth works for consumers as well as retailers.”

A few sites have added email notification systems that help convert browsers into customers. Bedford, Mass.-based CouponSurfer.com has set up a “Coupon Butler” service that informs users when a particular product they are interested in is available at a discount. Such newsletters and notices help.

But the best means of attaining visibility? Word of mouth. “The goal is for people to have an easy experience, become repeat visitors, sign up for emails and tell their friends and family about us,” says Wilson. “One of these visitors is worth five of the other kind.”

Everyone loves loyal customers. That’s why many sites encourage visitors to click a link to bookmark their sites as a favorite, sign up for an opt-in newsletter and tell a friend.

DealsDuJour.com recently received the Titanium award at the LinkShare awards ceremony, which Wilson says has helped it to garner a lot of positive attention. Mentions in the press don’t hurt either. Dan Baxter founded DealCatcher.com, which gets 3 million page views per month and promotes more than 500 merchants. He says appearances in the The Wall Street Journal, PCWorld and USA Today have been boons to his business.

But even if you get the best media attention and the greatest industry awards, you are still going to have to work hard. Your challenge is to get people interested and coming back. Content is important, too.

“You have to save your members either time or money or both time and money,” says CouponSurfer’s Schwartz. “You have to offer them value.”

Thinking about your audience is the key to success in the discount game. Luckily, online retailers are always trying to invent and offer new promotions. DealsDuJour.com’s Wilson has witnessed an increase in merchants in 2004 getting their holiday marketing plans in place earlier this year.

Work With Merchants

“I’ve been impressed. Merchants were already concerned in July about Q4,” says Wilson. “The usual suspects think ahead. Overstock.com and those guys are really focused on affiliate channels.” Then again, Overstock.com has 10 people focused on affiliates (see story page 40). But other merchants would be wise to think about offering discounts and disseminating deals.

“Merchants mistakenly think people will buy no matter what,” says Rapaport. “But if you aren’t offering deals, your competitor is. So you really need to offer coupons to people.” Rapaport suggests giving visitors a variety of coupons from which to choose – whether it’s a dollar amount off, a percentage off or free shipping. “Test and see which codes do better,” he says.

So what sorts of deals perform the best for merchants? Rapaport thinks free shipping offers are better than no special offer at all, and JupiterMedia’s Patty Evans hails them as a great deal to offer, especially this time of year.

“Free shipping is the master plan. It is consumers’ top concern; they react to it better than other discounts, even if they aren’t saving as much as they could with different offer,” says Evans. “It’s tangible and definitely priority around the holidays.”

Work Around The Clock

“It’s a juggling act,” says Joel Comm of DealOfDay.com. “It’s nearly impossible to keep up with all the offers. There are so many merchants and there’s so much competition.”

Maintaining a coupon site is so much work that Mike Allen realized last year he needed to make a choice between his job as a marketer and his job as a governmental training specialist at Mississippi State University. So he quit his university job and devoted himself full time to being an affiliate this year. Because he has four kids at home, he had to rent office space. “It’s too noisy at home,” he laughs.

And the business has ups and downs. Online savings affiliate sites see their business fluctuate with retail cycles. It’s not predictable income, and you have to be prepared to work when the shopping fevers strike.

“This is the hardest easy money you’ll ever make,” says Allen. “It’s only easy because you aren’t sweating.”

Keep in mind if you want to dance in the discount disco, you better be ready to work your tail off. There’s no break in this business. Says Rapaport: “We will be here on Christmas and the day after doing the after-holiday sales.”

DIANE ANDERSON is managing editor of Revenue.