Kristopher B. Jones: The Small-Town Big Man

His speech is peppered with “awesome” and “ready to rock and roll,” as if he were fresh out of high school. He’s only 32 but he feels luck has a lot to do with his good fortune. He took what was basically an idea to sell jam and turned it into a successful online marketing company.

But we’re jumping ahead. Jones is a small-town fellow. He grew up around the quiet northeastern Scranton, Pa., region – in towns with quaint names like Forty Fort and Wilkes-Barre. He still lives in basically the same area where he was raised and headquarters his business not far from those same stomping grounds.

He knew early on that he wanted to be in public service – drawn to the tantalizing returns of politics. After graduating high school in 1994, he got a full scholarship to Villanova University to study experimental psychology in 1998 after graduating from Penn State, but questioned whether he really wanted to be a clinical psychologist.

During that period, his brother Rick called and asked, “What do you think about selling grandma’s Mississippi mud over the Internet?” Jones says while he was the resident computer guru in school and was sitting on a lot of school and credit card debt, he was pretty committed to going to law school. He decided he would finish out his law degree and start this gourmet food business.

Grandma’s Mississippi mud was actually a kind of jelly he had eaten as a kid. He calls it a kind of gourmet dip. He typed the ingredients into the Web and out came the popular Northeast dip called pepper jelly. But Jones didn’t want to sell just another pepper jelly. In the end – and after consulting a friend in the food business – they decided on “Grandma Jones’ Originals Pepper Jam.”

It Started With the Jam

That, Jones says, was when his entrepreneurial spirit came out. He could point to other adventures in his business past – the lawn business he had in school and the 1-900 psychic service he started, even day trading – but they never really made any money.

The pepper jam, on the other hand, had legs. Through contacts in the gourmet food business, it started to get some traction. The business was started in 1999. “My brother was the creative side and he had all these flavors he wanted to do,” Jones says. “It all happened pretty quickly. I was going to do all the marketing. I drove the branding and launched the website called pepperjam.com. We personalized it with pictures and stories.”

Soon they realized in order to get traffic and sales, they needed to rank higher in the search engines. The most obvious way at the time was to cycle in fresh content. So, they then came up with the idea to interview famous chefs and put those up on the site. In the end, they posted interviews with the likes of Paul Prudhomme, Emeril Lagasse and Jorge Bruce, to name just a few.

Bruce sampled the product and loved it. At the time Bruce was looking to hire a consultant to get his brand and other chefs online, Jones said. “I will try to cook with this product,” he told Jones. “He may have thought we had offices when we were really operating out of a kitchen,” said Jones. Bruce suggested QVC. “I went into shock,” says Jones, “and had to put the phone on the bed and take a breath a minute. At the time, he was the highest-grossing chef on QVC.”

The chef interviews were getting a lot of traffic now and the question of how to monetize it all became important. That’s when Jones joined LinkShare and started adding affiliate links (his first check from ValueClick was for something like $37). He was just about to leave for law school and was trying to make money through affiliate marketing when in early 2000, he says he began his marketing journey in earnest. “I still own 50 percent of the gourmet food business,” he said. His brother told him to take the marketing business and he’d handle the product. “I knew that the Net marketing side of this requires work. I just started to build out websites – build out content based on a theme. My first was cookware.”

Also in 2000, he adds, Google came out with AdWords. “I was generating close to $100,000 per month in affiliate profits,” he said. He was doing this while doing his consulting work and serving as law school class president two years in a row.

“Once I had money, I wanted to do something with it,” he says. He put all the cash he had been earning while in school into this single idea – to turn his super-affiliate status into a new kind of marketing business – pepperjam.com. “We got an office. I hired my best friend as COO. We knew we could hire smart, young professionals and could help these businesses that were coming online and had no clue what affiliate marketing was,” Jones says.

Getting Into the Affiliate Game

2003 was the breakout year. Jones didn’t realize the impact his company was having until he went to his first LinkShare symposium (they got invited through Overstock.com). “We went to this event not knowing anybody and thought no one knew who we were,” he says. “My attitude was, ‘I’m a super-affiliate, let me manage your affiliate program.’ We were blown away.” When a merchant rep found out who he was, she hugged him. “You’ve been making us so much money,” she told him and introduced him to a whole bunch of merchants. “We were very well received,” he says.

With that boost in his pocket, Jones parlayed that excitement into a new small office and started to hire employees. From 2003 to 2005 he built his client list. From 2005 on, he says, it took on a life of its own. In 2006, the company was about 28 employees. Then pepperjam made Inc. magazine’s list of the 500 fastest-growing companies in the U.S. It was the only affiliate marketing company on the list. “As a search engine marketing agency, we were one of three with iCrossing and MoreVisibility.” All he could say was, “It was just a big party. We’re pepperjam, we’re in the black and we’re an Inc. 500 company.”

While still nurturing a desire to serve in a public way, he was invited to speak at a conference for the first time in 2004. He’s been hooked ever since and speaks quite often all over the country. It kind of feels like he’s class president all over again.

Somewhere amid all this work, he did manage to get married – to someone who works for the company. He said while his wife, Robyn, and he did attend the same high school, they weren’t pals. One night when home from school for a spell, his COO and he went out for a drink and spied her. They remembered her from high school. Jones sat back and watched his COO walk over and try to flirt with her. Finally, Jones joined them and he said they hit it off right away.

“She kind of asked me out after 60 seconds,” he says, “and here she was talking to my friend for the last 15 minutes; but we’ve pretty much been together ever since.” She wasn’t happy at her other job and Jones asked her to work for Pepperjam.

“I know you don’t want to work for your boyfriend, but I’ll have you work from home and write an employee manual or something. We can have you write out some client case studies,” he remembers telling her. After about a month, she began to come into the office and has been with the company for two years.

Growth Spurt

Jones says there has been a lot of interest to be acquired and from venture capital money. Last year, with about 50 employees “we had to think about crossroads – and decided to focus on our own technology,” he says. The company decided communication in this industry was the problem. “It is difficult to get in touch with your affiliates to admonish or to praise them,” he says. There was a lack of affiliate transparency. “We said, ‘We will tell you who are the key affiliates and can protect your brand.'”

This led to the notion of launching a Pepperjam network. Jones worked and consulted with hundreds of affiliates and merchants to preview the network – robust players such as Affiliate Classroom’s Anik Singal, and super-affiliates Lee Dodd and Jeremy Schoemaker, to name a few.

In January 2008, he launched pepperjamNETWORK. This essentially turns Pepperjam.com into a technology company with exclusive merchants such as luxury brand Judith Leiber, clothier Ben Sherman and Jelly Belly. Jones sees this as a super-transparent network that can be an alternative to the big three – LinkShare, Commission Junction and Performics – as well as an alternative to ShareASale. “We are not going up against the big three networks,” he added. “They are much better financed than us and bigger. There is still only one investor in pepperjam and that is me.”

Jones proudly says pepperjam.com now has about 105 employees in a 13,000 square foot floor of a building in Wilkes-Barre. He has five executives and 15 senior-management-level people. He has divisions now – online media planning and buying, search engine marketing, pepperjamNETWORK and full-time salespeople – their first. In the next 18 months, he predicts 300 employees. But he thinks of everyone as family. His wife is director of affiliate marketing; his bulldog is in the office every day. He doesn’t want it to be a corporate environment – there’s Free-Pizza Fridays, ping pong and “Guitar Hero” on the floor. In early 2007, they launched a corporate blog where a randomly chosen employee is given less than 30 seconds’ advance notice to come up with a presentation to be videoed and then posted to the site (some can be found on YouTube; some featuring Roxy the bulldog).

Amid all this success, Jones was approached in the early summer of 2007 by publisher Wiley to write a book on SEO and search marketing. “Search Engine Optimization: Your Visual Blueprintâ„¢ to Effective Internet Marketing” will be published this spring. “In fact,” he said, “I had always dreamed of writing a book in college. I always thought, how can you make a difference? I can join the clergy, be a great father or write a book.”

If that isn’t enough on his plate, Jones and his wife are expecting their first child in August. That’s not going to slow him down. “We are very focused on building out what we are creating,” he says. “We have a bunch of families now; we’re not just a small family anymore. I’ve always been the kind of person that believes that my time hasn’t come yet. I want to focus on being a great father, and from a business standpoint we want to become a great affiliate network. I want to see where we take it.”

While the future seems like a busy one, Jones notes that “pepperjam has just started.”

Double Down: Q & A with William Cooper

As the CEO of TradeDoubler – a Swedish performance network with a vast European presence – William Cooper has his eye on global expansion. TradeDoubler, with its local offices in 15 countries across Europe, is known as the biggest affiliate marketing network in the U.K. Cooper was appointed president and CEO in March of 2007, riding a wave of first-quarter revenue for 2007, up 30 percent. Previously, Cooper, a six-year veteran of TradeDoubler, was COO of the company for a year. Before that, he oversaw the company’s U.K. operations. Currently, TradeDoubler claims a network of more than 100,000 website publishers and has more than 1,000 advertisers across Europe, including a mix of local and international companies such as Apple Store, Dell, TeliaSonera, eBay and Kelkoo. Revenue Senior Editor Eric Reyes asked Cooper about affiliate marketing in Europe and the rise of globalization in an ever-shrinking business world.

ERIC REYES: Since the Sweden-based parent company seemed to launch its affiliate network almost simultaneously across Europe in 2000, was affiliate marketing considered a risky business back then?

WILLIAM COOPER: It was risky from the perspective that it was untried and untested across Europe; it was a concept that was almost completely unheard of. However, it had clearly gained some notable success in the U.S., and this gave us the confidence to succeed in Europe.

ER: Compare the opportunities and volume of affiliate marketing in the U.K. with its popularity in the U.S.

WC: I think it would be foolish of me to think that I knew enough about the market in the U.S. to make a direct comparison. However, with regard to the U.K. it is a very competitive market, and affiliate marketing is generally perceived as one of the most valuable digital marketing channels, and definitely the most cost efficient. It is held in high regard by the majority of e-commerce players.

ER: Do you run a network in Europe differently than you would in the U.S.?

WC: There are many more complexities to running an affiliate network in Europe compared to the U.S. In Europe we have to deal with different languages, cultures, tax regulations, currencies and constantly changing rates of Internet, e-commerce and broadband penetration. All this means that the need for local people in all the markets in which we operate is essential.

ER: Tell us a little about the growth of TradeDoubler UK. Have you been surprised by the interest in the affiliate space in the U.K.?

WC: No, we haven’t been surprised. We believe that we have been part of the process of raising the level of awareness and the importance in this channel. We have positioned it as “premium” channel and not a mere commodity. Affiliate marketing, if performed correctly, can be a dominant driver of e-commerce for any advertiser, so it is right that it is so well-respected.

ER: As affiliate networks become more international, are you seeing competition from U.S. firms such as Commission Junction or LinkShare, and what are you doing to keep your lead?

WC: Commission Junction has always been present in the U.K. market since we have been here. They are a very good competitor and we hold them in high regard. At present we don’t see the presence of Link- Share in our markets to any great degree but they are clearly a ver y knowledgeable and successful player outside of Europe, so it will be interesting to see how they try to gain market share in this already- competitive market.

ER: Is TradeDoubler planning to enter the U.S. market, and what would the challenges be?

WC: There are no plans at this stage.

ER: What are the regulatory and legal challenges of setting up networks in so many different European countries?

WC: There are numerous regulatory and legal challenges of setting up in all these markets. I will not make it easier for our competition by naming them!

ER: Would you consider TradeDoubler more publisher-focused than your U.S. counterparts? Why is that better?

WC: It is too difficult for us to sense that. I believe that we are more publisher-focused than most of our competitors and I believe that this is one reason for our success.

ER: Are there U.S. competitors entering your market that give you cause for concern, and why or why not?

WC: At the moment they do not give us concern, as it is a very competitive market. I just hope that players entering this market respect where we have tried to position the product since 2000. This is not just a technology play; there is much greater value that we can add as network operators to ensure an affiliate program fulfills its potential and reaches the expectations of the advertisers.

ER: What are the concerns of your U.K. merchants? Do they worry about the same things U.S. merchants fret about – trademark bidding, brand management, quality affiliates, etc.?

WC: I think they all worry about very similar types of issues. I would like to think that TradeDoubler is very proactive in trying to address these concerns, many of which can be easily managed.

ER: Are there plans to enter the Asian and Indian markets?

WC: There are no specific plans at this stage.

ER: Do your U.K. affiliates do business outside of Europe, such as with America or China? What percentage? Is it encouraged or are there stumbling blocks?

WC: Some of our U.K. affiliates work outside the U.K. and in our other European networks. We actively encourage it and there are some great revenue opportunities for them in these emerging markets. We help them address any legal issues that they might face, but in general it is an easy process for publishers wanting to work in multiple markets.

ER: Do you think specializing in certain vertical markets in the U.S. would benefit a European network?

WC: There are various ways to approach a mature market like the U.S., and becoming a vertical specialist is definitely one of them. However, the ultimate aim for any network should be to cover as many sectors as possible. This is driven by the fact that we all have interests covering many different sectors, and therefore a publisher that can deliver good results in consumer electronics can also deliver effectively across other sectors as well.

ER: Is there special technology TradeDoubler uses to track and monitor transactions and affiliates? Does technology play a role in serving geographically specific content?

WC: We developed our own proprietary technology back in 1999 and we constantly update and refine that technology. We have separate affiliate networks in all the 18 markets in which we operate; therefore, we don’t need to rely only on technology to target a specific region.

ER: What qualities make up a really good publisher?

WC: A strong publisher in the affiliate world must have a well-defined target audience, i.e., one that is interested in a particular market sector such as travel or financial services. This is why credit card comparison sites, for instance, work well. The audience is visiting with a specific aim in mind and the site is fulfilling their expectations. A loyal user base is also essential – publishers will earn more if they don’t have to buy all of their traffic. They must also have good content to allow them to feature highly in the natural search rankings. The site owner obviously has to be Web-savvy, knowing what links will work well in what place, what affiliate links work better in some places than others and they should complement rather than compete with other advertising that they’re running. The best publishers have open minds and strong ideas of what they’re looking to achieve.

ER: What qualities make up a really good merchant?

WC: A good merchant is prepared to invest time and resources into their affiliate program. As well as ensuring that their website is functioning well with a clear customer journey and reasonable conversion rate before launching a program, there are many factors which will help to ensure that their program does well. A good merchant is committed to building longterm relationships and trust with publishers. They communicate regularly with their publishers to keep them informed about all upcoming activity and will often communicate directly with top performers. They will set commission rates at the right level to ensure publishers are incentivized to promote their program while still ensuring they receive cost-effective returns. They regularly update creative and ensure that it is engaging and sales-focused. They respect their publishers and pay them on time!

ER: While online gambling is a big no-no in the U.S., gambling sites in the U.K. are OK. What types of sites do TradeDoubler frown on and why?

WC: TradeDoubler does not work with any sites featuring dubious content such as violence or pornography.

ER: Are there any new ways to monetize performance marketing?

WC: One example of how the model has adapted in response to advertiser and publisher demands is demonstrated through the pay-per-call concept. At TradeDoubler we have developed a pay-per-call product called td Talk, which enables companies to advertise more complex products online, which may require a telephone conversation to complete the sale (insurance products for example), and pay for the telephone calls that are generated. This model is also appealing to smaller companies that may not have a website of their own but want the opportunity to use the reach of the Internet to market their products or services. On the publisher side, they can ensure that they receive commissions for calls that were generated as a result of advertising on their site.

ER: AOL’s recent attempt to buy TradeDoubler’s Swedish parent failed. Is this good for TradeDoubler UK or bad?

WC: This does not impact on the performance of TradeDoubler UK in any way.

Network Supporters

Many merchants and affiliates develop very close relationships with their account representative at the networks. These network reps often take on many roles including problem solvers, helpers, mentors, sounding boards, cheerleaders, and sometimes they end up being cherished friends.

Many of these representatives are juggling multiple client relationships as well as their daily interaction with colleagues and peers. The account reps are usually big supporters of their clients and while the relationship between the network and its merchants is a partnership in many ways, it’s best not to forget that the account reps ultimately work for the network. And the goal of the networks is to make money.

And that’s where potential conflicts begin to arise. As a network you want to have efficiencies and leverage strengths. If one representative has experience dealing with the specific challenges and issues of a particular vertical segment (whether it’s those selling online mortgages, insurance, shoes or flowers) then having a single person deal with all those clients might be the most effective way to maximize your resources.

However, from a merchant’s point of view this might create a conflict of interest. If you are a merchant selling flowers online, you don’t want the same person handling your account having access to all your proprietary information and also managing the accounts of your competitors.

“I think it could be a benefit and liability for the merchant,” says Shawn Collins, co-founder of Affiliate Summit. “If all goes well and you have a rep with good insight, that’s great. But if you have someone that you suspect has a reason to help someone else over you, that’s not a good feeling.”

Collins says those uneasy feelings could easily be amplified since each of the networks offer different levels of service.

“I would probably have some concerns if the same rep was working on the same verticals – especially if the network was managing the account,” he says. “If you’ve got one company paying $1,000 a month to the network and another paying $10,000 and they are in the same vertical, I’d be worried that the one paying more was getting much better attention. I’d also be worried about shared intelligence even if it was innocent or inadvertent.”

ShareASale.com President and CEO Brian Littleton says his network is very aware of the situation and asks “each client who their competitors are, in their minds, so that we get a comprehensive list as well.” He says in “any area where a ShareASale representative is in front of sensitive data, we take as many steps as we can to make sure that it is not shared directly or indirectly with a competing merchant,” Littleton says.

LinkShare President Steve Denton says that his company helps quiet merchants’ fears by giving them direct access to their affiliates. That’s not the case with some other networks – most notably Commission Junction.

“It’s your channel; you should have that information,” Denton says, who admits that tact could be a liability if a merchant decides to leave. However, he says he thinks the upside of building a partnership outweighs that.

Denton says that for LinkShare it’s all about the service level the merchant has bought into. LinkShare offers two levels of service: one where the merchant purchases tools to help them run their own program; another whereby LinkShare runs your program for you.

“If you bought tools from us and I’m not running your program, then you can be put in a vertical category,” Denton says. “I don’t see a conflict there because it’s just a tool set and the playing field is level. But if I’m running your program – recruiting affiliates, extending private offers, etc. – then you can’t have the same reps working on accounts in the same vertical. I would not have direct competitors in the same portfolio. They may roll up to the same VP. We have Dell and Apple, Wal-Mart and Target, Macy’s and Bloomingdale’s. But the same reps don’t work on those accounts.”

Gary Marcoccia, marketing director at affiliate network AvantLink, says that in the company’s top two categories – Outdoor Gear/Recreation and Special Occasions – AvantLink has seen “that the more merchants from those respective categories that come in, the better all programs seem to do. This is because each program brings quality affiliates, adding even more specialized affiliates per category to draw from and attract.”

But what if a merchant is working with a CPA or ad network? Generally the merchants that do business with ad networks are looking to get leads and conversions. They are not paying them to deal with branding guidelines.

“In essence you bought shelf space in a store, you can’t expect much more. You didn’t buy an exclusive network. The attention goes to the guy that pays the most and has the best-selling product. Welcome to the world of distributed commerce,” Denton says.

Merchant Vann’s works with two different networks and according to Matt Ranta, affiliate manager at Vann’s, “Fiscally, it can be in a network’s short-term best interests to promote one competitor over another based on the analysis of commission and conversation rates,” he says. “But, ideally, if competing merchants both were working with a single network, they should be offered equal services and opportunities from separate representatives so as to assuage as much as possible a potential conflict of interest. Unfortunately, is seems that this is not always the case with some networks.”

A Taxing Experience

Some companies worry about conflicts when competitors simply join the same network. For TaxBrain, the problems started last November when Intuit and H&R Block also joined Commission Junction after leaving LinkShare. For four years leading up to the point, TaxBrain had enjoyed being the only tax preparation program with a big affiliate presence at CJ. Even though its rivals had much larger overall brand recognition with consumers, TaxBrain had more success using affiliates.

TaxBrain got wind of a competitor joining CJ when TaxBrain’s No. 1 affiliate called the company to say H&R Block’s account team at CJ was recruiting him. TaxBrain’s affiliate manager and vice president of business development, Todd Taylor, says he approached CJ about actively recruiting his top affiliates for the H&R Block program and was told these folks signed up as publishers looking to work with specific types of merchants, and the H&R Block profile was the same as TaxBrain’s.

Affiliate Colin McDougall says this kind of poaching is the norm. “This happens all the time. I will usually accept the rival offer; however, I will promote both companies on my site by offering reviews and pointing out the differences between the two companies for my visitors to make the best decision possible,” he says. “In most cases, each merchant has their own unique selling proposition and promoting rival companies benefits the merchant, consumer and the affiliate. The merchants get more traffic. The consumer gets to see a third-party perspective. The affiliate makes more money by having more brands to promote.”

That might be true, but Taylor says it’s still a hard pill to swallow when you’ve been at the network much longer. Taylor, who had suspected something was afoot when H&R Block showed up at CJU in September, was also miffed that the newcomer Intuit got high-profile treatment at the network. CJ recently put Intuit as a featured advertiser on its home page. TaxBrain has never been featured in that position.

“I felt like that was a slap in the face,” Taylor says, adding that TaxBrain has gone through four entire account teams in the last year at CJ, due to personnel changes and reshuffling at the Santa Barbara-based network.

This has all caused Taylor to be very cautious about communicating his affiliate strategy to CJ. He’s also worked hard to find out the names and other contact information for his top affiliates (CJ doesn’t actually share that information with its advertisers). He claims that now he only calls his top affiliates on the phone and deals with them personally. The rest of the affiliate program related to messaging and such is outsourced to a team at Partner Centric.

The impact has been felt on TaxBrain’s program. Taylor claims it has seen the conversion rate come down compared with last year, while the commissions paid out have gone up. He attributes some of that falling conversion rate to a variety of factors, including the state of the economy and that there is evidence that many people are holding off on filing their taxes. He directly cited the increased affiliate program competition for the rise in commission rates, saying that his company has had to pay out more to be competitive. He also claims that H&R Block recently began mimicking TaxBrain’s successful hybrid affiliate program that pays for both leads and sales.

After getting over the initial shock of H&R Block coming to CJ just in time for tax season, Tax Brain felt like it was dealt another blow when Intuit, which joined CJ in early January after running an independent program, had its lawyers begin sending a handful of cease and desist letters to TaxBrain. Most centered on advertising that TaxBrain was doing (some here in Revenue magazine) to recruit affiliates and promote its affiliate program.

“They are lawyering us to death to keep us from gaining market share,” Taylor says. “It’s cheaper for us to comply then spend the money on legal fees.”

Boon for Affiliates

While all of this competition can be a headache for merchants, it’s great news for affiliates. The more people affiliates have bidding for their attention the more they are in the driver’s seat in terms of getting better offers and higher commission rates.

Affiliates that want to create comparison sites in a particular category can also maximize their chances of getting commissions for sales or leads. “This is great one-stop shopping having all the players in one spot – search engines love that stuff,” Taylor acknowledges.

But some affiliates claim there is some loyalty involved. “I have been approached by rival merchants seeking to compete with a strong performer on our site. However, in these cases, loyalty plays a strong role,” says Mike Allen, president and chief executive shopper of Shopping-Bargains.com.

“It’s wise to ‘dance with the one who brung ya’ and I’m not willing to dismantle a strong relationship for a quick dance with a newcomer. Over the long term, though, since we have a diverse base of shoppers, I’m willing to build a complementary relationship with additional and even competitive merchants. Expand, yes. Replace, not likely.”

Allen adds there is also a lot of research that goes into joining a new program. “Once we have evaluated a program and determined we are interested in running it, we then look at the finer details of their program to determine how much we will promote it. This is especially important when there is a lot of competition in a particular vertical. Some of the finer details that impact placement and promotion on our site include the merchant’s conversion rate, their coupon policy, the availability of their affiliate manager, their policy regarding parasites and opportunities for additional earnings through bonuses, higher tiers, private offers or sometimes even slotting fees.”

McDougall says, “As an affiliate, having multiple merchants to choose from helps grow my business. More merchants to promote provides me with more brands to review for my site visitors, offering greater value to them. Plus more merchants in a vertical creates more competition amongst the advertisers to get prominence on my site, which of course leads to higher commissions. If there are too few merchants in a vertical, an affiliate doesn’t have much leverage for higher commissions.”

The Art of Wooing Affiliates

“You spammed me,” I said with a smile to the affiliate network manager standing next to me as we posed for a picture together at the last Affiliate Summit. Her smile suddenly disappeared.

Kind, compassionate and understanding person that I am, I fervently hoped to hear an honest, if not apologetic reply that would give me the slightest reason to consider ever doing business with her network’s merchants.

Despite tripping over herself with admissions of having been “horrified” when she realized that she’d spammed me, she left me in the dark as to why she would try to solicit my attention through the email address that I use only for domain registrations.

Here’s a tip for affiliates: Creating a unique email address for individual functions such as domain registrations is an effective way to ferret out spammers. Filter email sent to that address into a separate folder and check it occasionally to see who is operating on the dark side. Delete the address to which the spam was sent and make a note never to do business with that company.

OK, it should be fairly obvious that I have almost no compassion for spammers. I was simply curious to see what excuse she could come up with on the fly. However, there was no excuse because there simply is no excuse.

First of all, spamming is illegal, which makes it a lousy way to try and recruit super-affiliates for anyone who cares about their reputation as a trustworthy business partner.

Secondly, I am hardly an under-the-radar affiliate. My contact information is almost too easy to find. Google my name with or without quotes and my affiliate marketing “how-to” site floats to the top of the natural search results. In the upper right-hand corner of every page on that site there is a link to my Support Desk, at which my virtual assistant, Joel, is eagerly standing by to field questions from affiliates, managers and merchants alike. Our Support Desk is open to anyone and everyone. No proof of purchase is necessary and the only skill required is the ability to correctly enter an email address.

If a not-so-savvy surfer somehow misses the listing for that site in the search results, the vast majority of the other 999 results which Google serves on a query for my name are affiliates who link to another of my sites, which also includes a clearly labeled link to my Support Desk.

Regardless of how one chooses to get to the Support Desk, the manner in which a solicitation is worded determines the response (or lack thereof) that it receives.

Authors of generic blasts that do not include my name or are addressed to some variation of “Dear Affiliate” or “Future JV Partner” are sent a canned but friendly TYBNTY (Thank-You-But-NO-Thank-You) note. And they should consider themselves lucky that we take the time to do them the courtesy of a reply.

Those who address their request appropriately but then hype the offer receive the same note, as do merchants and managers who provide insufficient or incomplete details.

The number of correspondents that fail to show basic courtesy by including their real name and full contact details is staggering. I used to try making the point by addressing replies to “Dear ___” or “Dear Your Affiliate Team,” but I am not in the business of teaching basic email etiquette, so they too now get a canned TYBNTY.

I’m also not in business to research offers that are not only unsolicited, but which are also apparently a secret. I don’t really care if you have a “ground-breaking opportunity which will make affiliates a lot of money.” So does every other merchant, and Sherlock Holmes I am not.

Tell me what the product is, and include a link to the specific offer’s sales page. Also, if the offer is restricted to a U.S. audience, please provide a link that does not redirect my Canadian IP address to Classmates.com. Please apply the same technology within your network interface so that non-U.S. affiliates can view all merchant landing pages. I asked for that feature at MaxBounty and they were only too happy to oblige, so we know it’s doable.

Then there are those pitches for products that are completely irrelevant to my audience. If I find those before Joel has a chance to send a TYBNTY reply, they are summarily deleted. Seriously, why waste your time trying to get me to promote George Foreman grills on my dating service review site?

Do your homework and check out my sites before you contact me with your offer. Find the page on my site where your offer should be placed for the greatest impact and don’t bother to suggest that it should be placed on my home page.

Answer the question, “What’s in it for Ros?” If the offer is available on several other networks or directly through the merchant’s own affiliate program, the commission rate you offer has to beat them all, or any chance of further discussion will stop right there. Furthermore, be specific about how much more you can offer than each of the other guys.

Better yet, if the product is an online service or piece of software, kindly provide me with a username and password so that I can assess the product for review purposes. Doing so costs next to nothing, and if I really like the product and continue to use it, your product will receive a stellar review and subsequently many more sales. On the other hand, you could provide me with time-limited access, but then there is no guarantee that I will make time to review the product by your deadline.

Best of all, if you have a real product and are inclined to send samples, hit me up for my mailing address. It’s unlikely that such a request will be denied. You can be sure that affiliate Colin Mc- Dougall promoted the heck out of the inflatable boat that he was paddling around Vaseux Lake last summer.

We super-affiliates also work harder for merchants and managers who go the extra mile to get to know their affiliates. For example, while attending a conference in Los Angeles, two of my Australian- based merchants went 1,568 miles out of their way just to take me out for dinner. By result, I have been promoting their product for almost nine years and don’t intend to stop anytime soon.

If you’re not inclined to visit Beautiful British Columbia, then chat me up at a conference. Make it your job to learn that the super-affiliate you wish to recruit prefers beer over wine and dark beer over light. Super-affiliates eat too; so an invitation to lunch is always a good segue to doing business.

Having shared a belly laugh or two over lunch, you by now have my business card and telephone number. Do a follow-up call. Propose your best offer and have the name or number handy of the offer that you want me to look at.

Next, follow the call up with an email (yes, by now you also have my private email address) and include a link to the offer along with a list of keyword suggestions. Consider sending unique copy targeted to my audience and which I am allowed to edit. Barring long copy, a bullet list of product benefits and features is also very much appreciated. At this point, your job is done. Now just sit back, relax and watch for the sales spike.

There are many ways to get my attention and me working for you as a super-affiliate. Plaguing me with spam, however, is not one of them – especially when I’m already affiliated with your network!

Rosalind Gardner is a super-affiliate who’s been in the business since 1998. She’s also the author of The Super Affiliate Handbook: How I Made $436,797 in One Year Selling Other People’s Stuff Online. Her best-selling book is available on Amazon and www.SuperAffiliateHandbook.com.

eBay: What’s in Store

Describing eBay as a commerce website is like saying Elvis was a singer. The 11-year-old company that began as a virtual flea market similarly has become an international phenomenon, spurring the creation of cottage industries and sustaining thousands of small businesses.

And despite being one of the Internet’s forebears, the company is in many aspects just getting started. As eBay grows, so will the myriad of obvious and less-apparent methods that marketers can use to profit in, around and through eBay.

By economic standards, eBay is a medium- sized country. In 2005, the value of the sales through its marketplace ($44 billion) and financial transactions through its PayPal service ($27.5 billion) together were slightly more than the gross domestic product of Belarus, an Eastern European nation of 10.2 million people.

The eBay network includes much more than online auctions, encompassing vertical marketplaces (Motors, Rent.com), fixed-costs sites (Express and Stores) shopping sites (Half.com, Shopping.com), as well as a telephony company (Skype) and PayPal.

The San Jose, California, company’s revenues continue to grow at an unusually high rate for a mature company, jumping by 35 percent during the first quarter of 2006. “eBay has its own weather pattern,” analyst Greg Sterling of Sterling Market Intelligence, says. In addition to the many people who make a living selling goods on eBay, Sterling says the rapidly growing eBay economy also impacts “off-line eBay enablers, including packaging and shipping companies.”

INSIDE INFORMATION

While the auction service is eBay’s signature sales venue, it is only a fraction of the revenue opportunities available to marketers, many of which do not require selling goods. Publishers are leveraging the site’s considerable traffic to complement or as a portal to their own websites.

The eBay audience of active purchasers grew to 75.4 million users in the first quarter of 2006, up 25 percent from the previous year. The same strategies used to attract consumers on the greater Web, including search marketing, optimization and email advertising, can be used to capture traffic within the eBay universe, according to eBay Power Seller Skip McGrath.

“A lot of people use [eBay] as a marketing gateway, to market to them later,” says McGrath, who is the author of seven books on the company including “Titanium eBay, A Tactical Guide to Becoming a Millionaire Powerseller.”

Even if consumers don’t make a purchase, publishers can still profit by linking to their sites from within eBay, according to McGrath. “A substantial amount of people make more money from the advertising on their own sites through traffic from eBay than from actual [auction] sales,” he says. “I get 2,000 to 3,000 visitors per month just from people clicking through from eBay,” he says.

Publishers must be careful in promoting external sites, as eBay will ban anyone who violates the company’s linking guidelines, according to McGrath. For example, only the “About Me” page of an eBay Store can contain external links, and those must be at the bottom of the page. But McGrath has commandeered substantial traffic by including the URL of his business in the image he created for his About Me page, which he says is okay by eBay rules.

Maintaining an eBay Store not only provides the possibility of selling items for fixed prices, it also enables sellers to advertise to eBay’s massive audience. The company has one of the largest inventories of advertising positions to sell, as it is ranked as the fifth-most-trafficked website, according to comScore Media Metrix. In May of 2006, 77 million people visited the site, or 60 percent more than Amazon.com

eBay sellers can promote their wares by purchasing keywords on the site, but the ads can only link to eBay Stores. eBay Stores are promoted through Google’s Froogle shopping engine, and eBay spends about $250 million per year advertising with Google’s AdSense program to increase traffic, according to analyst Sterling.

eBay offers an email marketing program for contacting registered users. Power Seller McGrath says he increased the traffic to his website by including links in a newsletter that has 35,000 subscribers. “It’s a great platform to reach international markets, as it is hard to promote a website overseas [through search marketing],” McGrath says.

Marketers looking to improve the performance of their products on eBay or to identify the valuable keywords to promote in search marketing can license data from the company, says Greg Isaacs, the manager of eBay’s developer program. Publishers “can determine fair market value of items that are for sale” by analyzing data about sales at a fixed price versus at auction, Isaacs says, but eBay does not license personal data about its registered users.

To capitalize on the potential of the wildly popular social networking phenomenon, eBay recently launched two of its own Web 2.0 services. During the eBay Live users conference in June, the company unveiled Member Blogs, which enables members to promote their products and stores. Bloggers can expand their social network through posts in which they are not restricted from promoting and linking to their websites. The company automatically creates RSS feeds of the blogs to facilitate syndication and continually update readers.

Also announced at eBay Live was the eBay Wiki, a user-created encyclopedia of insider marketing tips and best practices for participating in the eBay economy, which publishers can use to showcase their marketing savvy.

“The next level [for eBay promotions] will be social commerce,” says Robb Hecht, a business blogger who publishes the Media 2.0 site. He says getting the blogosphere to build a community around the company and its products will be an important factor in maintaining eBay’s growth.

In addition to promoting themselves within the eBay cloister, marketers have a plethora of opportunities to generate revenue by promoting eBay commerce throughout the Web. Through advertising, integrating eBay listings and affiliates, marketers are spreading the gospel according to eBay and earning commissions.

An advertising system under development by eBay will enable publishers to generate commissions by referring users. AdContext, which competes with Google’s AdSense, searches the content of a Web page and automatically generates links to relevant eBay categories.

“Contextual advertising allows us to leverage content on any website, and connect it with any transaction [on our site],” says Lily Shen, a senior manager who oversees eBay’s affiliate program. Or, publishers can manually match their content with eBay keywords using software available to eBay affiliates.

Affiliates interested in AdContext sign up through network partner Commission Junction, according to Shen, who says affiliates are prohibited from using AdContext to link to their own eBay Stores. Commission payouts are tiered based both on the volume of new eBay users referred and the dollar amount of the winning bids that referring consumers make, says Shen. While referrals to eBay Marketplaces (including eBay Motors and eBay Express) are aggregated toward reaching the tiered goals, affiliate referrals to other eBay companies (such as PayPal, Half.com or Shopping.com) are not, Shen says.

Affiliates who promote other eBay companies receive separate revenue and traffic reports and must sign up for each program individually as every eBay property has its own commission structure, according to Lisa Riolo, senior vice president of business development at Commission Junction. Riolo says the addition of AdContext could help eBay to reach new publishers, although “there aren’t too many publishers who aren’t aware of eBay.”

Would-be publishers looking to create their own Web identity can use an eBay commerce and content tool. ProStores.com is an eBay subsidiary that offers an email marketing system for sending permission-based newsletters and promotions.

BUY DON’T BUILD

While eBay provides an extensive list of application programming interfaces (APIs) that publishers can access to integrate content into their websites, a growing number of third-party programs provide the shortest route to assimilating with eBay. The roster of eBay’s developers doubled last year to 30,000, according to eBay’s Isaacs. Applications developed by independent programmers generated 25 percent of the listings on eBay, he says.

Specialty retailers can boost their inventory by incorporating eBay Marketplace listings into their stores. For example, by customizing an eBay API, ticket reseller FatLens.com displays eBay items alongside tickets from other vendors, says president Siva Kumar.

While Amazon.com has more mature software, eBay’s technology is straightforward to use, and Kumar is impressed with the quality of the listings. “eBay has many long tail items like Civil War uniforms, things you can’t find in a regular store,” he says.

Advertising company Scope Aware recently introduced SmartyAds, a program for companies that want to participate in search engine marketing with the leading engines but do not want to manage multiple programs. Scope Aware acts as an agent, managing the campaigns for marketing eBay Auctions, eBay Store, and eBay Express listings across MSN, Google, Yahoo and Ask.com, according to founder Ali Gungor.

Scope Aware’s software “automatically analyzes goods for sales and comes up with the keywords to buy,” says Gungor, who charges a setup fee and percentage of the value of the goods sold. SmartyAds creates the ad copy and suggests the language for landing pages, Gungor says. By acting as an agent and negotiating with the search engines, Scope Aware enables small advertisers to participate in paid search dominated by large companies, he says.

Even though eBay’s commerce business is more mature than search, the company and its partners continue to develop new services for marketing and selling products. But maintaining that growth in the face of competition from Google, which is just beginning to exploit commerce, and Amazon, which is adding content to its retail properties, will be a challenge according to analyst Sterling. “It’s unclear how broadly eBay can expand.”

JOHN GARTNER is a freelance writer in Portland, Ore. He is a former editor at Wired News and CMP. His articles regularly appear on Wired.com, AlterNet.org and in MIT’s TechnologyReview.com.

Going Out Is In

Companies are outsourcing affiliate managers to fuel online marketing programs.

Former London-based freelance writer Rob Palmer knew he was on to something when he launched the affiliate program for his FreelanceWorkExchange.com subscription site. For several years he ran the program in-house; revenues were decent, affiliate applications were steady, but “there simply weren’t enough hours in the week for me to manage the program and deal with all the other management issues which required attention,” says Palmer from his new home in Australia. Plus, “the freelance market is massive and growing fast, but most affiliates hadn’t realized this can be a very lucrative source of commissions. I felt there was huge potential in the affiliate sector that we were not making the most of.”

His solution? Like the employers that use his site to outsource writing, programming, design and other freelance functions, he set out to find an external source of his own: an outsourced affiliate manager. Palmer found it with affiliate-turned-OAM Greg Rice.

Outsourcing isn’t new. Companies have done this for years, primarily to – according to a Dun & Bradstreet study – maintain competitive edge, focus on core business and improve service quality.

“But it’s new in comparison to the overall market that we’re in,” says Andy Rodriguez, an OAM and affiliate management consultant who will host a third OAM training conference in Chicago this August. “There just aren’t that many [OAMs] around. In the past, a lot of merchants hired a manager and said, ‘Here’s the affiliate program.’ Then they discovered what they really needed was someone that can lead a virtual salesforce, managing a large group of people by phone, by email and by instant messaging, who has a background in technology and knows how the Web works. That’s why so many merchants are now correcting their mistake of just hiring anyone in-house, and going out and hiring the best [OAM].”

Industry watchers informally estimate there to be a few hundred OAMs – either on their own or as part of an OAM agency – worldwide. And that number seems to be on the rise.

“The demand for OAM is large,” says Linda Woods, former Commission Junction affiliate manager and founder of the six year- old OAM agency PartnerCentric in Santa Barbara, Calif. “Our biggest challenge over the past year has been to find top-quality, experienced AMs.”

Others agree.

“Outsourced affiliate program management is a very new and, hence, an extremely exciting sphere to be working in these days,” Evgenii “Geno” Prussakov, a St. Petersburg, Russia-based OAM who manages programs for such U.S. clients as RussianLegacy.com and FantasyJewelryBox.com, says. “Many online businesses are in need of good affiliate program management, yet the number of experienced [OAMs] around the world is very limited. The competition between [OAM] firms is certainly growing, but the market is still very new and fresh.”

PartnerCentric’s OAMs hail from affiliate teams at Orbitz.com, Gap.com, 1800flowers.com and other “upper echelon” merchants; each having at least one year of full-time AM experience.

Even the term “outsourced affiliate manager” is somewhat nebulous. Few OAMs operate on their own; many have staffs of three or more assisting with new clients. “To find one person with a blend of all the skill sets needed is pretty rare: recruiting, selling ability, keywords, optimization,” says Peter Figueredo, CEO and co-founder of NETexponent, a NYC agency running affiliate programs for NYTimes.com, FinancialTimes.com, PuritansPride.com and others. (He has 13 on staff, and is hiring more “online media managers” to fit the OAM bill.) “We approach it as a team, bringing different people with different skill sets together to work with our client accounts.”

That’s the case with OAM agency PartnerCentric.

“Very few [merchants] have the internal expertise to run an affiliate program to the level that it needs to be run today,” says Woods. “It’s incredibly complex now because of all the new issues involved: fraud, spyware, conversion rates, EPC, competition. Two years ago, there were one or two furniture companies with affiliate programs. Now there are 40. Affiliates used to have a few hundred merchants to choose from in a network; now it’s a few thousand. The tracking has become more complex. And there’s even competition for clients from OAMs, especially if a merchant feels one AM can give them more exposure. That’s the kind of complexity we face every day, so managers have to really know what’s going on.”

In April, PartnerCentric acquired AMWSO, a Thailand-based OAM agency led by Bangkok-based Chris Sanderson. “By being able to work with a U.S.-based OAM agency, we can benefit our team here,” says Sanderson, pointing to programs his team already runs for Shopster.com, WesternUnion.com and 18 other international merchants. “That’s the personal touch we wanted.”

PartnerCentric manages affiliate programs for about 50 merchants, including TheCompanyStore.com catalog company, NationalGeographic.com, DigitalRiver.com (a half-billion-dollar e-commerce software company) and recently ClubMom.com. It’s had 300-percent-per-year revenue growth for the past three years, and Woods expects to double its revenue in 2006. PartnerCentric now has 20 on its team, plus eight other staffers; a move Woods says is “definitely moving towards the big boys.”

Some affiliates, however, are often going it alone until they’ve built up enough business to start adding staff.

For instance, the new outsourced program manager for FreelanceWorkExchange.com, Greg Rice, was once a superaffiliate for TigerDirect.com. He’d been an affiliate for seven years running a shopping mall site, and made the switch after going through Rodriguez’s mid-2005 OPM training. Currently, Rice owns CommerceMC.com and manages four programs, including ITHeadhunter.net.

“Working as an affiliate, you have contact with a lot of affiliate managers,” Rice says. “You get to see firsthand what works and what doesn’t work – and you get to see firsthand the opportunities that exist because most AMs don’t have a clue other than putting links up there and walking away from it.”

Another affiliate who’s going the OAM route is Kevin Webster, owner of outsourced B2B affiliate marketing agency OPMWeb.com, near Rochester, NY. For five years he ran a site called CorporateLeverage.com, stocked with his own articles on business-to-business sales and affiliate links to relevant products. In late 2005, he left his day job selling Cingular and Verizon cell phone plans to businesses, sold his affiliate content “for a scant $1,500” and launched OPMWeb.com.

“The rumor is that this industry is underpopulated,” Webster says. “It’s my intent to grow this organization slowly and smartly, ensuring that each new client receives all the focus their program deserves. That’s critically important at the launch of an affiliate program, and never really changes.”

Webster’s first client is SimpleGuardian.com, a notification security and medical alarm company targeting real estate agencies and arenas; two other contracts are in the works, he says.

“Simple Guardian had a very traditional brick-and-mortar sales model before this point,” Webster says. The company is very new to e-commerce, so this is a real test of a lot of things. Our main focus is B2B, which in my opinion has only been done with limited success up until this point. Plus, the merchant uses a content management system where I’m able to log in on the back end to tweak things for those landing pages. They’ve given me access to basically their entire organization – I can pick up the phone or send an email to just about anyone, from their database guy to their graphics department to their sales team. Not all merchants are going to be like that.”

While some OAMs fulfill otherwise-disregarded fundamentals, others are using technology as their edge. From a home office with a DSL connection, AvantLink co-founder Gary Marcoccia works with three other home-based OAMs in the Salt Lake City area to distribute data feeds from 16 merchants to several hundred affiliates. They do it all thanks to an integrated “deep-linking tool center” supported by Web service technology, RSS publication of affiliate ads and content and a simplified management interface. New merchants include ToolKing.com, Altrec.com and CampSaver.com; tools are free for affiliates to use, and merchants pay a flat $1,200 for its “start-up package.”

“Merchants really warm up to the start-up package,” Marcoccia says. “Once they realize that they really do need someone to manage the affiliate channel, it can be somewhat terrifying. Unless someone has deep pockets to justify hiring us as an [OAM] at $3,000 per month, it’s daunting. A start-up package should get them off the ground.”

The package includes program detail pages that are searchengine- optimized to be crawled and indexed; “buzz” on AvantLink’s AbestWeb.com’s forum; program announcements to AvantLink’s affiliate opt-in list; a few hand-picked “quality affiliates” to start; and, soon, a press release on the merchant’s new program sent through one of the PR news wires.

“We have tools that are pretty advanced,” Marcoccia says. “We’ve identified effective conversion methods, and kind of promise them five quality affiliates that will get going with the program, use the tools effectively and get the program running. That’s a pretty powerful service to offer a company that’s in limbo. We solve that catch-22; these merchants are interested in starting an affiliate program, they have a good niche but they don’t have to pay an in-house AM $10,000 per month to get the program off the ground.”

Technology is also the foundation for San Rafael, Calif.- based WatchDog Affiliate Managers, which runs programs for such merchants as InteriorExpress.com, Yoox.com and MadisonAvenueMall.com.

“Lately, we’ve been writing contracts starting at around $2,100 for the smaller guys that we think have a product that will grow and where the affiliates will be attracted to because the commission is good,” co-founder Christina Lund says. “For that low of a rate though, we would ask for a little bit more in commission; maybe 1 or 2 percent more than the 2 to 5 percent we usually charge.”

This bare-bones package includes all of its full-service offerings: recruitment of program-specific affiliates; newsletter writing and distribution; use of a WatchDog-branded administrative software system that allows advertisers to make changes to creatives that are automatically fed to all of their affiliates in real time; XML-based coupon feed so affiliates automatically get up-to-date offers; plus its “Merchant Express” multilingual data feed software, which uploads up to 2,000 product descriptions and photos and feeds the results in real time to affiliate-tuned storefronts with only the types of products that affiliate wants.

“It’s a whole store in one line of Java script,” says Cory Lund, WatchDog’s vice president of product development. “The whole part of this game is to really nurture these affiliates, and make their job a lot easier. With technology, we can offer everything in the big package, but the hours are shaved a bit ” it may be 20 hours per week for an OAM to manage instead of full time.”

WatchDog has nine freelance OAMs in its fold – spread out in San Francisco; Ventura, Calif.; Minnesota; and Kansas City, Missouri.

With technology being a selling point in the OAM world, it makes sense that some of the networks are jumping on the OAM wagon. Six-year-old affiliate network ShareASale, which is historically a place where merchants run “self-serve” programs, recently started managing the programs for clients. On its OAM to-do list: day-to-day administrative management, including affiliate approval and review; coupon and promotion distribution; newsletter creation and distribution; regular traffic and sales reporting; assistance with product data feeds and basic banner creation and management; and providing unique content, keyword lists and custom merchandised storefronts for the merchant’s top affiliates.

“Management of programs is only a small part of what we offer; ours does require membership in the ShareASale network, and is really more of an ‘add-on’ to our basic service, as opposed to a true outsourced solution,” says Brian Littleton, president and CEO of ShareASale.com. “But for small-to-medium- sized business, where ShareASale concentrates their efforts, [our OAM] services can be extremely helpful in allowing merchants to focus on their best practices, while allowing the [OAM] to assign best practices to the affiliate channel based on their expertise.” Though Littleton won’t divulge the total number of accessible affiliates in ShareASale’s network, Littleton says they’ll “often research categories for merchants who inquire about joining the network in order to give them rough ideas as to what to expect.”

Meanwhile, at LinkShare, “we really go out to market with our account management and client services,” says Liane Dietrich, vice president of merchant services for LinkShare. “Most of our merchants are working with in-house AMs or outsource their program management to LinkShare.”

Still, for Chris Henger at affiliate network Performics, outsourcing is a loaded word. “We prefer to look at it as an extension of the merchant’s marketing team. ” Yes, clients rely on their Performics’ program manager to administer the program, negotiate with affiliates, field inquiries and optimize the program,” Henger says, “but we don’t view our approach as outsourcing. The advertiser maintains control and still has to make critical decisions, particularly in regards to promotions and customer quality.”

The addition of network outsourcing of affiliate program management is an interesting hurdle for OAMs.

“A lot of people go directly to the networks because they don’t realize there’s a whole region of independent managers out there that can manage their program independently as well, if not better,” says OAM Shawn Collins, who runs affiliate programs for PaylessShoeSource.com and Snapfish.com. “Yet I get a lot of calls from headhunters wanting affiliate managers to run a program inhouse, and they’re just not around. The in-house talent pool has been moving to the agency side – because they can manage multiple programs which can potentially be more lucrative.”

Which brings up the subject of money. OAM firms usually work on monthly retainers of anywhere from $2,000 to $7,000 for only a few products, and up to $35,000 for rollouts of a big-merchant range of affiliate-sold products. Remember, however, that the retainer could be funding the cost of several managers and, in the case of NetExponent, even OAM health benefits.

While the numbers may seem large, merchants are recouping that several times over from affiliate sales. The highest-paid OAMs also often come with the most to offer: “All that money that was spent in the dot-com blowup went toward educating a lot of staff people,” says former BarnesAndNoble.com AM Stephanie Agresta, who’s now an OAM at Commerce360, a Pennsylvania-based agency that guides merchants through the LinkShare platform. “You can’t replicate that just anywhere, for any price. If you live in Kansas, you may be able to find someone who can work for $30,000 per year – but in areas with lower labor cost, there’s more of a chance you won’t be able to find the expertise. At a minimum, we’re talking salaries of $60,000 to $100,000. For that same amount of money you can buy an OAM solution that comes with expertise and relationships.”

For now, costs continue to climb, as the existing OAMs in greatest demand gain more experience and more relationships with super-affiliates that they’ll bring in tow, observers say. In time, costs are likely to level out as more OAMs enter the market.

No need to fear, says Prussakov. “Competition only benefits the industry. It constantly makes OPMs think of new ‘outside the box’ ideas to enhance affiliate performance and draw more quality affiliates to their programs.”

The advent of aggressive outsourced program managers brings certain advantages to affiliates, namely the ability to work directly with managers who’ve once been affiliates themselves.

“It’s absolutely imperative to have affiliate experience,” Rodriguez says. “You cannot help someone build a house unless you’ve built a house before. You can’t help someone ride a bike unless you’ve ridden a bike before. At the same time, in no case should an affiliate manager compete in the same business as their affiliates. They have access to very sensitive information, and this is a trust industry.”

Given recent flap over affiliate managers at the big networks leveraging affiliate strategies to start competing affiliate sites, this is a fair warning. If you’re concerned, simply ask your OAM to add a noncompete clause to your contract. Many already include it. Some avoid even the appearance of a conflict of interest by working with only one client in each type of industry. Others count their expertise with multiple, similar programs as their strength. The choice is yours. Meanwhile, the lure of the money that can be made from the OAM price tag is already leading to some problems, as a few OAMs overload their plates and end up shortchanging everyone.

“You need two people full time, or four people half time to fully service one affiliate program,” Figueredo says. “The quality of work required to have a really robust and aggressive program comes out to that amount of work, at least.”

For FreelanceWorkExchange.com, adding one more was the perfect number. “Greg [Rice] has done a great job of taking on all the important tasks that had been neglected in the past, from liaising closely with affiliates and managing bonus schemes, to writing our affiliate newsletter and recruiting new affiliates,” says FreelanceWorkExchange.com’s Palmer. “The hardest part of the process was making the decision to let an outside party handle such an integral part of our business. But once that decision had been made, the only issue was choosing the right consultancy for the job. I didn’t want to find myself paying high fees to a company that just delegated our account to a junior with little experience. We were looking for someone who could deliver high-level expertise at a reasonable cost, and that’s what we found with CommerceMC. In every other respect, it has been pluses all the way – we now have a more professional and more efficient program that is attracting new affiliates daily.”

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.

The New Face of CJ: Q & A with Lisa Riolo

Commission Junction’s Lisa Riolo steps into a new role with some familiar responsibilities.

As Commission Junction’s senior vice president of business development, Lisa Riolo is responsible for driving revenue for the sales and business development teams. While she’s not technically filling Todd Crawford’s shoes, Riolo will be the new face of the affiliate network, taking on many of the same challenges as the former vice president of sales, who left in February.

Owned by ValueClick, CJ is based in Santa Barbara, Calif., and has tens of thousands of publishers in its global network. In the six years that Riolo has worked there, she has led the sales, client development, search and product management teams. In her new position, she manages the 25 people who make up the sales and performance optimization departments. Revenue Senior Editor Maria Sample recently interviewed Riolo about her company’s practices and plans for the future, as well as the affiliate marketing industry and the importance of understanding people.

Maria Sample Your predecessor was very active in the affiliate community (i.e., forums, message boards, etc.). Do you plan on continuing to be Commission Junction’s face in those arenas?
Lisa Riolo Actually, the organizational structure introduced by our general manager, Tom Vadnais, positions me in a role that hadn’t previously existed. So, fortunately, I’m not faced with the challenge of having to fill someone else’s shoes. I do recognize that, since its earliest days, Commission Junction has relied upon one or two individuals to convey most of its messages. In the future, I think the affiliate community will hear and see us take more of a team approach.

MS Todd Crawford (the former vice president of sales) was considered the public face of Commission Junction. The downside of that is that he often took the heat from angry and upset affiliates. Are you prepared for that? And how will you handle those sorts of public (and sometimes personal) attacks?
LR I believe passionately that Commission Junction achieved greatness because of the publishers. I’m very open and prepared to listen to them. It’s been part of my role for the past six years.

If I end up the target of discussion, that’s OK. I’ve found that frustrations expressed reveal great opportunities to learn and improve. I tend to worry more about silence than I do about rants.

MS Part of your responsibilities include increasing Commission Junction’s market share. What plans do you have to increase market share over the next 12 to 18 months?
LR Our vision has consistently included a global perspective, and in the last 18 months, we’ve expanded our European presence from the U.K. to Germany and France. In 2006, we plan to launch offices in more countries in Europe, and continue to leverage opportunities we have in Asia.

We’re also committed to improving our clients’ experience in the CJ Marketplace. As we make it easier for them to extract information and interact with our product offering, we’ll attract new participants to our business.

MS What about plans for driving new revenue?
LR Our current plans fall into three categories. Last year, we expanded our service offering to better meet the needs of our advertisers, especially those selecting the CJ Access service level. We see additional opportunities for services that benefit other segments with our client base. Next, we’re exploring opportunities for leveraging new distribution channels created by technology innovation. And finally, we’ve reaped great benefits by collaborating with other teams in the ValueClick family of brands and plan to continue to do so.

When you look at the ValueClick products and expertise, you’ll see we have a compelling story. When you look at the metrics from just a couple of our cross-divisional efforts, you see the type of incremental lift that generates real excitement on our part.

MS What threats, if any, does the sudden proliferation of ad networks present to Commission Junction?
LR Ad networks have existed for years, some of which we’ve had relationships with for a long time. We don’t see ad networks as a threat, per se. They offer value that complements what we do at Commission Junction. We see that from our collaboration with our teammates at ValueClick Media, who run the largest independent display ad network in the U.S. The more monetization opportunities we can offer our publishers, the happier they are and the more they want to work with us.

The fact is, as heard from several outstanding publishers, they go where they get the best return on investment [ROI]. Commission Junction must understand and optimize every component of the ROI equation, from payout to time spent in our member area.

MS Can you outline the risks and benefits of sub-affiliate networks?
LR From an advertiser’s perspective, the benefits are a) you’ve potentially improved your efficiency because you’ve outsourced part of your relationship management responsibilities, and b) the sub-affiliate network may generate significant volume and extend your reach. The two primary risks of working with subaffiliate networks are a) you’re typically paying a premium for “aggregated” transactions, and b) you often do not have good visibility into the promotional methods used by the “subaffiliates” which, in all likelihood, will challenge quality standards.

From a publisher’s perspective, the benefits offered include higher commissions and often, faster payouts. The downside is productive publishers that don’t have direct relationships limit their ability to demonstrate their value. Hence, negotiating exclusive offers or higher payouts is difficult. The other risk for publishers is that, often, the sub-affiliate networks are not only outsourcing to other affiliates, but also competing with them. How often does a subaffiliate’s transaction get attributed to the network or super-affiliate?

MS Andrew Jacob, Leadpile’s CEO, seems to think his company’s Centralized Online Lead Marketplace could take the place of Commission Junction. Recently, he referred to his offering as an alternative to “traditional, old-fashioned affiliate marketing programs like Commission Junction.”
LR Isn’t it fantastic to operate in an industry where someone references a company that hasn’t celebrated its 10th anniversary yet as “old-fashioned?” Anyway, my response in these situations is usually the same: I pay attention. I never dismiss the potential importance of a future or existing player in the space. If you’re still in business, the game never ends. You’re always competing and you always have to scout and monitor what else is out there – and why. You won’t catch me not paying attention.

I do look for potential issues with other networks. For example (and acknowledging that it’s still early on), Jacob hasn’t illustrated how he plans to manage quality and scalability from the advertiser perspective. If you can’t drive and manage large-scale results on a reliable basis, you can’t drive value for your network participants. And a bid-based pricing system alone doesn’t really resolve all of the issues around quality. Nor can he simply assert, “Our sellers provide high-quality leads” with no basis. Even if the prospective customers Leadpile provided to its past advertisers were of acceptable quality, it’s a completely different thing to build a quality network.

So, it’s about quality, efficiency and scale, and no one in the affiliate marketing industry has driven all three of these as well as Commission Junction.

MS What does Commission Junction have that the competition does not?
LR The first thing we have is market-leading scale. Commission Junction is a global leader in performance-based marketing, and is the No. 1 provider of affiliate marketing managed services. Second, our commitment to upholding quality standards within our network of advertisers and publishers is unparalleled. We are the only network that has a team dedicated to monitoring and enforcing our Code of Conduct and Service Agreements. We are a trusted third party that continually strives to build and retain our clients’ (and future clients’) trust and exceed their expectations.

Third, we provide more transparency than the competition. The CJ Marketplace is the only network that openly publishes the performance metrics of advertisers, publishers and ads, allowing for a results-driven environment.

Fourth, as part of ValueClick, we can introduce our advertisers and publishers to a broader set of solutions that help advertisers meet their various online marketing goals and publishers monetize their online presence.

MS Why does Commission Junction use the term “publisher” instead of “affiliate”?
LR When we made the change from “affiliate” to “publisher,” we introduced the CJ Marketplace with the intention of influencing online marketing beyond the affiliate world. So, we adopted terms more commonly used by the ad networks. We also switched from “merchant” to “advertiser.” The strategy worked well and we have caught the attention of a broader group of online marketers.

MS How often do you interact with publishers?
LR During the past six years, my primary responsibilities involved developing our clients – both the advertisers and the publishers. When it comes to personal interaction, client meetings reflect about a 70/30 split between advertisers and publishers. Typically, though, I spend more of my time in the publisher meetings. At our annual client-facing event, Commission Junction University (CJU) and other industry events, I focus my attention almost exclusively on publishers because I need more data points from that group to understand if, and what, trends exist.

MS What makes an affiliate/publisher a “super-affiliate” at Commission Junction?
LR There are several attributes, including commissions earned, that earn publishers a CJ Performer designation. Generally, I’ve found the highest performance levels represent the top 5 to 10 percent of a program or network’s participants.

MS What traits do super-affiliates/publishers possess that separate them from the others?
LR I almost always see a balanced blend of entrepreneurial spirit, technical ability and creativity among this type of publisher. They are goal-driven and usually set aggressive benchmarks. The one unique quality I see in those with a long track record of proven results is a greater focus on flexibility than massive scale.

MS What type of online advertisers/companies do you work with?
LR We work with 1,700 advertisers. There isn’t a specific type of advertiser that we work with – we attract a broad spectrum of advertisers from small, regional businesses to global brands and from all industries.

MS What rate of measurement works best for advertisers? Publishers?
LR ROI and ROI.

MS What do you think publishers could be doing better?
LR On the whole, publishers tend to focus on attracting consumers that have already progressed toward the decision-making phase in the purchasing cycle. I think they could improve their ability to effectively move a consumer through more of the earlier phases in the purchasing cycle.

MS What do you think online advertisers could be doing better?
LR Advertisers should focus on managing their spend and resource allocation across channels. Too often I hear the statement that affiliate marketing generates the best RoAS [Return on Ad Spend] coupled with the assertion that the channel isn’t capable of producing comparable “volume” to their other channels. Managed properly, as evidenced by a number of savvy advertisers in the industry, the affiliate channel can effectively outperform the alternatives – including search and portal deals.

MS What do you like about performance-based marketing?
LR Both the left and right sides of my brain get stimulated by this work. I love the analytics and seeing the big ideas unfold. You might think the accountability in performance-based marketing, with its focus on metrics, would discourage creativity. I think it’s quite the opposite. Driving results, on a pay-for-performance basis, forces a level of effectiveness that demands creativity. I think the publishers are often at the leading edge of change and innovation.

MS What do you dislike about performance-based marketing?
LR When you compare results across marketing channels – the standards set by performance-based marketing should prevail. Yet I still see advertiser clients having to fight, internally, for budgets and resources. If the team involved is properly monitoring for quality, then blowing through a “budget” should equate to blowing through sales goals – and that’s a good thing, right? They should be feeding the revenue machine.

MS Are you involved in Commission Junction’s Internet radio show, “Affiliate Marketing Today”?
LR Yes, I participated in the decision to produce the show and it launched on March 21. Our team changed the broadcast format to take a unique approach in that it covers the continual changes in the industry, with both an advertiser and publisher perspective across beginner, intermediate and advanced levels.

MS What’s happening in 2006 at Commission Junction – any big changes?
LR This year is very exciting for us and our clients. We have some significant projects in our pipeline. Also, I mentioned earlier we plan to launch in some additional European countries this year.

MS Do you think Yahoo’s ban on trademark bidding will have a big effect on SEM?
LR Right now, a conflict exists between brand marketers and performance marketers. The assumption is that you are either creating awareness or driving sales. Actually, both channels should benefit the other. I think pricing models and ROI metrics, rather than restrictions, are the best way to manage the effectiveness of a channel. As marketers’ perspectives on this issue evolve, I think Yahoo may choose to alter their policy.

MS What would happen to Commission Junction if Google suddenly went out of business?
LR At its core, Google is a distributor of information. I don’t think Google created demand that wasn’t already there. Instead, they found a way to effectively supply the information. Initially, Google altered the way people navigated the Web. If suddenly the system being used to access information disappears, what happens? People adapt and find a new source, or sources, to access information. With respect to Commission Junction, we, through our publishers, would adapt. Publishers would find new opportunities to promote offers at the emerging information sources.

You know what? These changes are already happening, but it’s gradual, not sudden. Web users navigate and source information differently today, compared to yesterday. What are we doing about this? Sensing, responding and facilitating changes within our model.

MS How has your psychology degree helped you in your career?
LR A psychology degree wasn’t supposed to help me in business – or so I recall having heard from people more often than not. I remember thinking that studying psychology would help me understand what motivates people. And, it seemed to me, if I was going to be an effective leader within any business, I better understand what motivates people. I think my theory held up pretty well.

Relationship Manager Needed

Connection, communication and commitment are the cornerstones of a good affiliate marketing relationship.

I’m looking for someone to share my life with. My life is busy, complicated and filled with people who are looking to me for advice on relationships. I spend all day helping others make meaningful relationships, only to come back the next day and start all over again. I’m not in it to make a match for myself, but to help everyone around me make a match. Why, you may ask. The answer is quite simple: As an affiliate manager, that’s my job.

I manage affiliate marketing relationships for an online personals site. I’ve managed affiliate relationships for a number of years, and I’ve come to realize that what I do for work feels a lot like dating. For instance, every day I search for someone special who shares my goals and is willing to work as hard as I am to reach them. I look for someone who knows that an affiliate relationship must be built on communication, and sometimes compromise. I want to find someone with whom, in the end, I hope to make a successful match to ensure a long-term commitment.

As an affiliate manager, I recruit people and companies to join my program, and these affiliates recruit others to join the site. These two objectives are inexorably linked. The stronger a bond I create with my affiliates, the harder they will work for me. I believe in my affiliates and, above all else, I believe that I should invest as much as I can into establishing quality affiliate relationships.

I would like to share five essential tips that have helped me build successful and profitable relationships with my affiliates.

Provide Attractive Creative

It is important for an affiliate program to have fresh, well-designed creative in a variety of sizes and styles. Many affiliates judge the value of a program by the way its creative looks. It’s important to remember that a program’s creative reflects not only on the quality of the program, but also on the quality of an affiliate’s site. After all, affiliates’ sites are your first line of defense, and establishing trust and rapport with their visitors is vital.

In a lot of ways, this is like searching through your closet and picking out your best-looking outfit, getting a haircut and washing the car before you pick up a date for a nice night out. If you don’t look like you care about how you present yourself or the way you feel about your affiliation, it’s going to be difficult for your relationship to take root and bloom.

Communicate

Communication is the cornerstone of any great relationship. Not only does communication take patience, it also requires that we listen to the needs and concerns of others; it’s a two-way street. Affiliate managers need to make sure that they ask their affiliates for tips and suggestions and give advice accordingly.

If something is working well for your company, share it with your affiliates. If you’re an affiliate stuck in a rut, call your affiliate manager and talk to them about looking at your site to find ways to push the needle. In the words of recently retired Loyola University Chicago professor John Powell, “Communication works for those who work at it.” If you work at communicating with your counterparts, you will be able to increase your earnings and give your affiliates incentive to remain loyal to your program.

If you work with a network that does not share affiliates’ personal contact information such as phone numbers and email addresses, this may be a little more difficult. However, you can still make sure that you provide affiliates with the easiest ways for them to contact you. Give them all of your email addresses, phone numbers, instant message handles and, if you operate a blog, the blog’s URL. But don’t let that be all. Most networks still allow you to send out emails, newsletters and promotional offers, so take advantage of this. It is important to make sure that your communication is of the highest quality and will add value to your affiliates’ promotional efforts.

Be Available and Accessible

I am constantly receiving email and phone calls from affiliates who are so grateful that we make ourselves available to them. Nearly every night before I go to bed, I check my email; when I have new messages, I try to respond to them as soon as possible. A number of our affiliates run their sites as a side business and usually work on them after-hours. Therefore, if I can expedite my responses and make an affiliate’s work easier, our program will benefit.

Be Honest and Up Front

Never make promises you can’t keep. This is the quickest way to destroy relationships. When you are honest and up front about expectations and goals, both sides will be more willing to foster that perfect team of manager and affiliate. Give More Than You Receive In a very real way, being an affiliate manager is like being a big brother to hundreds of people. My job is to fight for the needs of my affiliates. If an affiliate needs more creative, then it’s the manager’s job to make sure the affiliate gets it. Above all else, managers should always be looking for ways to give more to affiliates – more time, more commissions, more of whatever they need.

Gone forever are the days when affiliate managers and affiliates could ignore one another and remain successful. Relationships in the affiliate marketing world take a lot of work and must be managed well in order to succeed. If you want your affiliates to work for you, start working for them. Do more than send monthly newsletters or mass emails, although those are a good start. Constantly review affiliates’ sites and look for ways to improve them or to help affiliates with any errors they may not be aware of. Then call each of your main affiliates and those with potential to be top affiliates. Develop that personal relationship and help them to grow their programs.

We would be smart to keep in mind the words of entrepreneur and author Dr. John C. Maxwell: “If your focus is on what you can put into people rather than what you can get out of them, they’ll love and respect you – and those attributes are great foundations for building relationships.”

JAMES GREEN is customer acquisitions manager and heads up the affiliate program for MingleMatch, Inc., a division of Spark Networks plc. Originally from Utah, Green formerly worked for 10xMedia and 10xMarketing.

Community Commerce

Until now online shopping has been a lonely endeavor. Think Sandra Bullock in “The Net,” the 1995 film where she works from home, orders everything online and has few friends outside of cyberspace. Even 10 years later most people still shop online alone, sneaking it in during work hours or squeezing it in after everyone’s in bed.

“If you look at the first 10 years of e-commerce, it was solitary, not social,” says Rob Solomon, vice president of the Yahoo Shopping Group. “Yet, if you look at the pre-e-commerce world, that’s all shopping was; e-commerce changed that. E-commerce isn’t going to be a solitary thing that much longer.”

That’s because social networking is having its third rebirth online, and this time experts think it will stick.

“E-commerce will be much more than 5 percent [of retail revenue] three years from now,” Solomon says, “because this will change the landscape of it.”

As such, affiliate sites are building loyal fan bases and gaining steady clickthroughs by encouraging buyers to bring their offline friends along for the shopping experience.

“Consumers looking for the best of the best, the first of the first, the most relevant of the relevant increasingly don’t connect to ‘just any other consumer’ anymore,” according to TrendWatching.com, a report focused on spotting new trends. “They are hooking up with (and listening to) their taste ‘twins’; fellow consumers somewhere in the world who think, react, enjoy and consume the way they do.”

To tap this trend, the best-selling affiliates are adding social networking elements outside the norm. They’re offering ways for buddies to view each other’s potential purchases, give and get advice in any form they want, pay each other’s bills and even get cash for recommending something their buddy ultimately buys.

Influencing Others’ Potential Purchases

Forrester Research found that consumers who buy fashion online are more likely to interact socially by sending product links to friends. With more than 40 million – mostly young, higher-income females – having purchased clothing online to date, this market is ripe for affiliate-site options that seamlessly allow second opinions.

Take eDressMe.com, run by Tango dress designer Joanne Stoner, who uses Yahoo’s storefront to offer her dresses alongside more than 1,000 others from New York designers. The site conference calls in mothers and daughters with its personal shoppers to look at online dress options together and reach an agreement.

“It’s just the right forum because the daughter is around to shop, the mother is around to pay for it and the personal shopper will be the one who decides whether the outfit is appropriate or not,” Stoner says. The result? eDressMe.com gets about 6 million unique visitors per month and has been No. 1 in most natural search rankings for “cocktail dresses” and “evening dresses” for three years running.

While online buddy shoppers can’t actually see the other person’s outfit on, they now have options like My Virtual Model, an animated model sized to a customer’s exact measurements and customized with faces, hairstyles and builds. Merchants like Adidas.com, LandsEnd.com, LLBean.com, Sears.com and iVillage.com (20 percent commission) all offer the virtual model for “trying on” clothing as part of their affiliate offerings. The saved model can be used at all participating merchants, with final outfits “imailed” to buddies for feedback. Shoppers using My Virtual Model reportedly spend more, buy more and return fewer items.

Buddy emails and conference calls are just two of the many new ways shoppers will soon be able to provide pre-purchase feedback through shopping sites. “There is so much more you can do with IP communications if you tailor it for the e-commerce experience,” says Rob Seaver, CEO of website-embedded IP communications provider Vivox.com. “What if you could talk to people who recently purchased the same item? What if you could see into other people’s shopping carts? What if you’re considering a purchase of the ‘Desperate Housewives’ DVD collection, and while you’re looking at that there’s an ad that says, Join five people in a small affinity group talking about ‘Desperate Housewives’? By bringing the social networking aspect and e-commerce together, you can increase interaction on a site and, consequently, increase sales.”

For example, in conjunction with Friendster.com allowing users to post Amazon.com affiliate links, it now offers Net Zero.com’s free computer-to-computer calling with a banner ad on its log-in page. Buddies only need a USB headset and microphone to bring the offline experience online.

Give Advice, Get Advice

Amazon.com is a leader in product reviews with more than 6 million entered by its users. And in November, Amazon patented how its reviews are conducted.

According to Amazon’s lead engineers, “The click through and conversion rates of recommendations based on collaborative filtering vastly exceed those of untargeted content such as banner advertisements and top-seller lists.”

Still most others claim it’s a non-issue. “All the major sites have product and user reviews,” says Martin Levy at eDeals.com, which posts reviews alongside merchant, auction and coupon results for product searches on one page.

The Pew Internet & American Life Project found that 33 million American Internet users have reviewed or rated someone or something online. And Forrester Research found that, in Europe, more than 50 percent of online consumer electronics buyers check product reviews from other customers, 30 percent purchased something online based on someone else’s online rating and 15 percent wrote a review themselves.

TrendWatching.com cataloged these results in its late-2005 “twinsumer” report.

“The twinsumer phenomenon is turning millions of reviews, ratings and recommendations into truly valuable results fitting one person’s very particular preferences or even lifestyle – whether it’s a one-off twinsumer union or an ongoing relationship. Twinsumer therefore isn’t about access to reviews or ratings or even trust in general (those are fast becoming hygiene), but about relevance.”

The name of online mall Yub.com says it all. It’s “buy” written backward. The company, launched in February 2005 and snapped up by Buy.com, is all about consumers recommending products to other consumers. Offering nearly 5 million affiliate-fed products, Yub.com provides a place where people sign up to meet (and give Yub valuable consumer data), hang out and get merchant-negotiated cash-back rates of up to 25 percent for free members and up to 34 percent for “premium” members, paying $24.95 per year. Users also get 1 percent when their buddies buy something endorsed in their profile.

“The voice of our members is an incredible resource for both merchants and online shoppers,” said Jared Morgenstern, president of Yub.com, in a launch release. “Merchants receive the benefit of satisfied customers who become product evangelists, and online shoppers learn the latest in trends from the most reliable source – their friends. It’s a win-win situation for everyone involved.”

Insiders are finding that the best way to help “product evangelists” refer other shoppers is by giving them the communication tools they’re most apt to use. They may want chat, email, instant message, text messages, on-demand cell phone or land-based phone calls, calls to other computers with headsets, photo or video uploads or live webcam communication.

“One of the things people don’t like doing online is not having any sort of interaction when they’re picking out, say, a dress,” says Karen Hoskins, Logitech’s webcam PR specialist. The addition of webcam communication “is a more personal element to shopping online.” Sellers on eBay now can even upload pre-shot Webcam footage for 99 cents per video listing (first upload free).

“But to make it more like real life,” Vivox.com’s Seaver says, “the next step will be to have the real-time interaction among users.” Vivox has a managed IP service that integrates all of the various real-time IP-based communication methods. It costs a few hundred to several thousand dollars per month, so sites usually roll costs into membership fees charged to users.

For sites wanting to add their own social network, Vivox already powers WorldFriends Networks’ (WFN) new WorldFriends Phone service. Buddies can view personal hot lists, identify members online and escalate interpersonal interactions from IM – regardless of the branded IM service they may currently use – to voice to video with one click. All of these services can be private-labeled: WFN customizes and operates the personals service, combining profiles from more than 150 sites in 18 countries viewable in up to five languages.

“There is no up-front cost to join our network and avail of our service,” says Dominic Penaloza, in sales partner for Meta4-Group.com, WorldFriends Network’s parent company. “However, we do have a modest set up fee that is payable from the user-fee revenue share.” Partners get a “generous” share of all user fees, which run $24.99 per month or one year for $99.99 ($8.33 per month).

And don’t forget the forums for tapping into buddy-type recommendations.

“There is an amazing amount of discussion on everything – from digital cameras to professional chef knives – on all of the specialized user forums out there,” says Michael Tchong, founder of Trend Setters.com and UberCool.com. “That’s shopping engineering at its best.”

Pay Each Other’s Bills

eDressMe.com is just one example of sites using social networking to have one person find an item and another person pay for it. Gift card revenues have exploded to $55 billion dollars, according to Tchong. “That inherently includes the social element – because you buy a gift card to give to someone else.”

BarnesandNoble.com’s new shopping cart software builds on its social features (blog-like back-and-forth reviews and posts of a reviewer’s other recommended reads) by including pop-up reminders to “send an online gift certificate” now.

Getting Paid for Social Networking

“When consumers rally around a specific topic, recommendations are instantly relevant, as long as they don’t stray too far from the topic at hand,” TrendWatching .com reports. “No wonder virtual communities are fertile breeding grounds for meeting one’s twinsumer.”

Perhaps the most affiliate-friendly virtual community to date is Squidoo.com, launched in early December by Internet marketing guru Seth Godin, author of New York Times best-sellers Permission Marketing and Purple Cow.

Users create profiles and build a topic-specific reference Web page known as a lens. Fifty percent of net revenue from a lens, whether from automated Google AdSense ads or affiliate sales for Squidoo’s 500 merchant partners, go back to the lensmaster.

“Squidoo lets online entrepreneurs sell thousands of products without signing up for different affiliate programs or building and hosting a website,” Godin says. “In just a few minutes, they can present a thoughtful collection of items – and then spend their time promoting the site.”

The bonus for adding yourself to social commerce sites like this can be immense. Relevant content garners higher Google PageRanks and can highlight your best blog posts, point to the products and services you write about, autofeed with RSS news when you’re out of town, track your site’s name mention on other blogs and promote upcoming podcasts and offline events.

Gather.com is another social commerce site now in beta testing. All of its members are bloggers, an area ripe for commercialization. Bloggers, some of whom simply repost blog entries or newsletter content from their own site, are paid out of revenue generated from Gather.com’s in-house ad network, where affiliate ads are welcome. Ads appear based on interests specified in a user’s profile.

“Because we’ve got just a few dozen advertisers since [our Nov. 15] launch, they’re getting prices that are much better than what they’re getting at Google or Overture,” says Gather.com founder and CEO Tom Gerace, the brains behind BeFree’s affiliate network (it sold for more than $100 million to ValueClick in 2003). “Plus they’re able to target an audience – membership is 5,500 and growing – that’s already loyal to coming back to our site.”

Then there’s Yahoo’s Shoposphere beta, which launched Nov. 14. It aggregates and sorts Pick Lists created by Yahoo Shopping’s community, allowing users to “search, view, read about and purchase specific products recommended by people they know and trust, experts they’ve never met, and everyone in between.” Affiliates can use Yahoo’s Open Web Service APIs, which include shopping search, price compare, reviews and product specifications.

“This creates a whole new value chain that allows those people who were only consumers in the past to become sellers,” says Yahoo’s Solomon. “Not too many other people can execute on this like we can. Amazon.com is positioned, but without the social networking all ready they’re really at a disadvantage.” Yahoo won’t roll out revenue sharing with Shopospherekeepers, however, until later in 2006.

All in all, tapping into this social networking trend boils down to making your online shopper’s experience more like one they’d have on land.

“One of the affiliate managers I work with said he was so tired of seeing stores that looked alike, and wanted to see different things in online shopping like capturing the social experience,” says John Gilhooly, publisher of mallDTS.com, which launched in October 2005. “Malls have always been a great social experience for people, so we get a little more of that online to make it seem like they’re actually engaged in offline shopping, online.” He’s made the experience so authentic, he says, that “two people actually called recently and asked for directions to the mall.”

Sources like TrendSpotting.com are predicting this is just the beginning.

“The twinsumer trend is part of an all-encompassing trend changing who and what consumers rely on when making purchase decisions, both need- and impulse-driven,” the report states.

But will the business model work, or will content-based sites crash like revenue-share Themestream.com did in 2001? The tagline for the 1995 movie “Mallrats” hints at the perils of crossing your fingers for commerce in a social environment: “They’re not there to shop. They’re not there to work. They’re just there.”

But industry insiders say that, thanks to the buddy factor, consumers are ready to come online and actually buy this time. “Instead of getting the lowest price and leaving, shoppers are staying on the site and getting some value for that,” eDeals.com’s Levy says. “Then they’re there when a merchant comes out with a special offer and they can take advantage of that. That’s what eDeals is doing ” something very similar to Yahoo. And if Yahoo is doing this, then you can see that this is where the market is heading.”

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 and writes in Portland, Ore.

Winning the Seasonal Race

Managing a seasonal program is akin to drag racing – lots of hard work goes into the preparation, the light turns green, then it’s over.

For a seasonal program to be successful, it’s crucial for its managers to think like affiliates. If you were a top affiliate looking for a program, where would you go and what would you want to hear? If you can get into the head of an affiliate, you can gain the perspective of a top performer, understand the tools necessary for success and learn how to win.

Attracting Valuable Affiliates

All of your affiliates are valuable, but the top performers will give you the highest return on investment. Forget the 80/20 rule (80 percent of revenue comes from 20 percent of affiliates). In 2005, for example, only 1 percent of TaxBrain.com’s affiliates generated 80 percent of affiliate revenue. Obviously some affiliates were better prepared before the season began. They most likely used the following steps to success.

Find the best program. Check out resources such as search engines, affiliate networks, directories, forums, events and other networking opportunities. Within these, look for the most compelling stories on potential earnings in terms of conversion rates, clicks per sale and commission structures.

Use the right keywords. Your program’s online presence begins by building affiliate pages optimized for keywords in your niche. Online marketing success means ranking high in the search results for your particular niche (such as "tax affiliate program"). Searching on Google for "affiliate program" yields 134 million organic results as opposed to 74 million for "top affiliate program." Paid search has a decent ROI, but you can also achieve meaningful results by site-targeting popular affiliate and webmaster hangouts, as well as home businesses and small-business portals.

Spread the word. Take advantage of communication opportunities available through your affiliate network. These include multiple category listings, newsletters, conferences and email marketing. Top-performing seasonal programs are often overlooked by the Big 3 affiliate networks (Commission Junction, LinkShare and Performics). This is because their indicators are heavily weighted with off-season trends. To overcome this, capture your performance results when it’s your time of the year and trumpet that information all year long.

Get listed. Affiliate directories work well, so get listed in as many as possible and pay those that are worthwhile. Often, reciprocating links are all you need to offer. To attract the best performers, talk payouts, highlight impressive stats or try catchy headlines like "Top Affiliate Earned Enough Last Season to Take Rest of Year Off!" Most directories don’t offer much listing space, so make your sales pitch count.

Use the forums. Forums are a beautiful thing – think of them as the eBay feedback mechanism of affiliate marketing. They allow you to monitor affiliate concerns and provide an excellent opportunity to market your program. Buzz around the forums, abide by the rules, post when appropriate and be sure that your signature promotes your affiliate program.

Make it personal. Personal relationships with affiliates often begin at trade shows and other industry networking events through direct contact. When online, you can gather contact information by using freebies and give-aways as motivation. For example, offer T-shirts or publications in exchange for direct contact information.

Optimizing Your Program

With thousands of seasonal programs all claiming to be the best and attempting to clear obstacles such as being overlooked by network indicators, it’s imperative that awareness of your program rises above the noise. For a seasonal program to be a winner, it must be well-tuned. To achieve maximum performance, managers can use the following ideas:

  1. Evaluate all existing affiliate communications from sign-up to acceptance. Review and revise your program listing to sell the opportunity, not just the product. Adjust your welcome letter and carefully craft your first message so they are appealing.
  2. Review competition in and out of your own network. Sign up as an affiliate and join your competition’s programs. Examine messaging and compensation within those programs for strengths and weakness. Implement strategies to exploit the weaknesses of your competition. Use the information to increase the appeal of your program while reducing your competition.
  3. Determine the lifetime value of a customer and create the highest commission structure in your niche. Pay more and pay faster. Pay your best affiliates the most. Provide additional strategic information and offer customization. PPC players don’t have much time to test a seasonal program, so you can accelerate their acceptance and understanding by releasing specific ROI stats from your own PPC performance.
  4. Create program offers that are appropriate for differing business models. Loyalty, incentive, shopping and content sites may have different needs than those of email marketers. To help accelerate sales during the season, create tiered offers that reward affiliates with additional commissions when well-defined revenue targets are achieved. Be sure your reward structure is attainable and measurable.
  5. Assess and build compelling creative. Ensure that initial messaging and associated landing pages match for consistency. Eliminate extra clicks or distractions at registration and preserve the initial click through messaging throughout the experience to checkout.

With your engine tuned for best performance, it’s time to put team dynamics into play.

School Your Affiliates

Once you have affiliates, you must teach these new business partners how to sell your product effectively. They have the ability to generate traffic, but you have to show them how to deliver it for maximum conversion. Here are some helpful tips to get the job done.

Organize your approach into complete campaigns – define targets, duration and exact message, using your affiliate Web pages for emphasis. Produce a matching keyword list. Promote each campaign individually.

Separate affiliates into meaningful groups to quickly spot trends. Create "watch" groups so you can track performance and monitor activity. Consider grouping by like business models or by special promotion. Continue to reorganize and regroup as business conditions change.

Communicate specific selling opportunities and develop a messaging strategy around each campaign. Start a blog enabled with RSS, in lieu of an emailed newsletter, to keep affiliates informed. Give your affiliates sufficient notice to put a new campaign into play (some need up to a month’s lead time).

Motivate your affiliates. Contests make things fun, but more importantly they help keep your program top of mind all season. For maximum exposure, create a contest that anyone can win. Have a daily prize throughout the selling season.

Try to identify demographic shifts or new trends that might be happening, then communicate this new information quickly. As an example, Hurricane Katrina created new government initiatives that benefit survivors, which could affect the way consumers search for tax products. This made new keyword combinations such as "hurricane tax," "katrina tax relief" and "hurricane katrina tax forms" valuable.

When managing a seasonal affiliate program, remember it’s the off-season that’s critical to next year’s success. That’s when you should learn from the experience, evaluate performance, incorporate new technologies and make all necessary changes. Recruit, optimize and communicate – these are the keys for managing a topperforming seasonal program.

 

TODD TAYLOR manages business development for TaxBrain.com from Petz Enterprises in Tracy, Calif. He is a technology veteran and entrepreneur with more than 20 years in the industry. He studied economics at Carleton University and is a graduate of computing from St. Lawrence College.

Managing a seasonal program is akin to drag racing – lots of hard work goes into the preparation, the light turns green, then it’s over.

For a seasonal program to be successful, it’s crucial for its managers to think like affiliates. If you were a top affiliate looking for a program, where would you go and what would you want to hear? If you can get into the head of an affiliate, you can gain the perspective of a top performer, understand the tools necessary for success and learn how to win.

Attracting Valuable Affiliates

All of your affiliates are valuable, but the top performers will give you the highest return on investment. Forget the 80/20 rule (80 percent of revenue comes from 20 percent of affiliates). In 2005, for example, only 1 percent of TaxBrain.com’s affiliates generated 80 percent of affiliate revenue. Obviously some affiliates were better prepared before the season began. They most likely used the following steps to success.

Find the best program. Check out resources such as search engines, affiliate networks, directories, forums, events and other networking opportunities. Within these, look for the most compelling stories on potential earnings in terms of conversion rates, clicks per sale and commission structures.

Use the right keywords. Your program’s online presence begins by building affiliate pages optimized for keywords in your niche. Online marketing success means ranking high in the search results for your particular niche (such as "tax affiliate program"). Searching on Google for "affiliate program" yields 134 million organic results as opposed to 74 million for "top affiliate program." Paid search has a decent ROI, but you can also achieve meaningful results by site-targeting popular affiliate and webmaster hangouts, as well as home businesses and small-business portals.

Spread the word. Take advantage of communication opportunities available through your affiliate network. These include multiple category listings, newsletters, conferences and email marketing. Top-performing seasonal programs are often overlooked by the Big 3 affiliate networks (Commission Junction, LinkShare and Performics). This is because their indicators are heavily weighted with off-season trends. To overcome this, capture your performance results when it’s your time of the year and trumpet that information all year long.

Get listed. Affiliate directories work well, so get listed in as many as possible and pay those that are worthwhile. Often, reciprocating links are all you need to offer. To attract the best performers, talk payouts, highlight impressive stats or try catchy headlines like "Top Affiliate Earned Enough Last Season to Take Rest of Year Off!" Most directories don’t offer much listing space, so make your sales pitch count.

Use the forums. Forums are a beautiful thing – think of them as the eBay feedback mechanism of affiliate marketing. They allow you to monitor affiliate concerns and provide an excellent opportunity to market your program. Buzz around the forums, abide by the rules, post when appropriate and be sure that your signature promotes your affiliate program.

Make it personal. Personal relationships with affiliates often begin at trade shows and other industry networking events through direct contact. When online, you can gather contact information by using freebies and give-aways as motivation. For example, offer T-shirts or publications in exchange for direct contact information.

Optimizing Your Program

With thousands of seasonal programs all claiming to be the best and attempting to clear obstacles such as being overlooked by network indicators, it’s imperative that awareness of your program rises above the noise. For a seasonal program to be a winner, it must be well-tuned. To achieve maximum performance, managers can use the following ideas:

  1. Evaluate all existing affiliate communications from sign-up to acceptance. Review and revise your program listing to sell the opportunity, not just the product. Adjust your welcome letter and carefully craft your first message so they are appealing.
  2. Review competition in and out of your own network. Sign up as an affiliate and join your competition’s programs. Examine messaging and compensation within those programs for strengths and weakness. Implement strategies to exploit the weaknesses of your competition. Use the information to increase the appeal of your program while reducing your competition.
  3. Determine the lifetime value of a customer and create the highest commission structure in your niche. Pay more and pay faster. Pay your best affiliates the most. Provide additional strategic information and offer customization. PPC players don’t have much time to test a seasonal program, so you can accelerate their acceptance and understanding by releasing specific ROI stats from your own PPC performance.
  4. Create program offers that are appropriate for differing business models. Loyalty, incentive, shopping and content sites may have different needs than those of email marketers. To help accelerate sales during the season, create tiered offers that reward affiliates with additional commissions when well-defined revenue targets are achieved. Be sure your reward structure is attainable and measurable.
  5. Assess and build compelling creative. Ensure that initial messaging and associated landing pages match for consistency. Eliminate extra clicks or distractions at registration and preserve the initial click through messaging throughout the experience to checkout.

With your engine tuned for best performance, it’s time to put team dynamics into play.

School Your Affiliates

Once you have affiliates, you must teach these new business partners how to sell your product effectively. They have the ability to generate traffic, but you have to show them how to deliver it for maximum conversion. Here are some helpful tips to get the job done.

Organize your approach into complete campaigns – define targets, duration and exact message, using your affiliate Web pages for emphasis. Produce a matching keyword list. Promote each campaign individually.

Separate affiliates into meaningful groups to quickly spot trends. Create "watch" groups so you can track performance and monitor activity. Consider grouping by like business models or by special promotion. Continue to reorganize and regroup as business conditions change.

Communicate specific selling opportunities and develop a messaging strategy around each campaign. Start a blog enabled with RSS, in lieu of an emailed newsletter, to keep affiliates informed. Give your affiliates sufficient notice to put a new campaign into play (some need up to a month’s lead time).

Motivate your affiliates. Contests make things fun, but more importantly they help keep your program top of mind all season. For maximum exposure, create a contest that anyone can win. Have a daily prize throughout the selling season.

Try to identify demographic shifts or new trends that might be happening, then communicate this new information quickly. As an example, Hurricane Katrina created new government initiatives that benefit survivors, which could affect the way consumers search for tax products. This made new keyword combinations such as "hurricane tax," "katrina tax relief" and "hurricane katrina tax forms" valuable.

When managing a seasonal affiliate program, remember it’s the off-season that’s critical to next year’s success. That’s when you should learn from the experience, evaluate performance, incorporate new technologies and make all necessary changes. Recruit, optimize and communicate – these are the keys for managing a topperforming seasonal program.

 

TODD TAYLOR manages business development for TaxBrain.com from Petz Enterprises in Tracy, Calif. He is a technology veteran and entrepreneur with more than 20 years in the industry. He studied economics at Carleton University and is a graduate of computing from St. Lawrence College.