An Unbridled Love of Shopping: Q & A with Michelle Madhok by Chris Trayhorn, Publisher of mThink Blue Book, January 1, 2006 Michelle Madhok has a lot of experience mixing content and commerce online. She has worked at CBS Broadcasting as a director of entertainment marketing for the new media group and was group director of editorial products for AOL. Madhok understands the power of promotion when it comes to the world of online shopping. Her latest venture, SheFinds.com, offers information to busy women who don’t have time to read five-pound fashion magazines to keep on top of the latest styles. The site, which is packed with information about the must-haves in beauty and fashion, features a daily blog and an online forum that underscores her mission and motto: “We shop the Web so you don’t have to.” With 16,000 subscribers and approximately 300,000 unique visitors per month, SheFinds.com blends Madhok’s ideas about melding editorial and e-commerce. Madhok recently talked with Revenue writer Alexandra Wharton about the value that affiliates offer merchants for building their brands. She also expounded on her thought that sites, such as SheFinds.com, should be treated as any other form of media. Madhok claims that because affiliates can help retailers reach new customers and niche markets, they should not be limited to commission-only compensation. For Madhok it’s all part of the importance of value-add partnerships and relationships in the world of online merchandising. The newly married Madhok talked with Wharton, also a recent bride, about her fall wedding, which she pulled together through websites – many of them affiliate sites. This inspired Madhok to purchase the URL for WiredBride.com, her latest idea to create an online shopping guide for brides. Alexandra Wharton: What was the inspiration for SheFinds.com? Michelle Madhok: When I was at AOL, I became the beauty director and we started a column called Ms. M. It promoted beauty products every month. It did really well. We started offering swag – we would put up some kind of cosmetic and it would sell out. One time we had to contact a factory to get more of a certain color we had promoted. It really showed me that content and commerce was going to work. So I’ve been very interested in mixing content and commerce for a long time. I’d been pitching it at AOL over and over but I couldn’t really get any traction with the bureaucracy and its changing management. So I went home and started this business and we’ve been doing very well. It has been almost 18 months now and we have 16,000 subscribers today. It’s all been word of mouth. Every Tuesday we send a “style mail,” and every Thursday we send a “sale mail.” The thing about these subscribers is that they are highly qualified. At AOL I learned that you can have a ton of impressions and it does nothing for you. It’s more important to have really quality people, even if it’s a smaller audience, because they buy. We launched SheFindsMom.com five months ago, because we were getting a lot of interest about kids’ clothes and maternity stuff. So we decided to separate that off. I very much believe in psychographics, not demographics. For example, you and I are both brides, and we’re interested in the same thing that a 24-year old bride is – you know, we both need to know about cake toppers or whatever. AW: What is your biggest category? MM: Our biggest category seller, which kind of surprised me, has been underwear. We are working very closely with Bare Necessities. We figured out how to do a “Zagat” guide to underwear. We email people about their favorite underwear. And, believe it or not, people are passionate about bras and underwear and shape-wear. So we sold a ton of underwear. Dan Sackrowitz of Bare Necessities and I did a presentation at the LinkShare Symposium. Bare Necessities has made more than $2.50 per name from the SheFinds.com subscriber list. AW: Can you comment on the benefits of value-add partnerships for merchandising? MM: We frequently feature eLuxury.com as a place to buy luxury goods. We’ve moved $20,000 worth of merchandise for them this year, and remember, this is on a list that just reached 15,000 subscribers. I also know that there have been thousands of dollars in non-commissionable sales because we’ve exceeded the return days. We sell big-ticket items for them – $1,000 Louis Vuitton bags. I think it’s very valuable that they are reaching our highly qualified audience. We are providing brand awareness for them, and I think that they are beginning to understand that and support us with ad buys. AW: Do you spend most of your time working on affiliate relationships with merchants? MM: The affiliate thing is a little bit of a conundrum for me because I feel like sometimes affiliates/retailers – they don’t distinguish between different affiliate sites and they [merchants] treat us as the sweat-shop workers of the Internet. I feel with some sites – they [merchants] only want to do things on commission and I don’t think that’s right. I feel like you’re paying to have placement in magazines, you’re paying to have placement in newspapers, you’re paying to have placement on television, why should you disregard the branding opportunity I bring you? I’ve been saying my new thing is I don’t work on a purely commission basis. In editorial I do that. But if you want ad placement, or some special email, we work on a combination. Basically, if you do affiliate links with me, I’ll take 20 percent off my rate card. But you are still going to pay a placement fee. Because I believe that I am building your brand. We did this thing with SmartBargains.com – we did a combination. They did really well. And a lot of people told me they had never heard of Smart Bargains before. I’m building awareness, and who knows how much of a value that person is in a life span? I think that we should be treated the same as other media. On the other hand, coupon sites can live off of 5 percent commission or whatever people want to pay. I don’t like that we get lumped into the same area because I’m trying to create a quality product and get you the best users that you want and create your brand image. If you’re going to throw yourself up on a coupon platform, yes, they’re going to make more because they play dirty. They spam the search engines, they post codes that are out of date, and they don’t keep things up. Yes, they make a lot more money than I do, so I can’t compete with it. I really feel like that’s a problem that affiliate marketing is having right now. AW: Do you work with a network? MM: I work with Commission Junction and LinkShare. I work with pretty much all of them. AW: And do the networks help you to attract new merchants? MM: Well, LinkShare has gotten to be much more helpful. I’m doing a bunch of holiday – it’s Q4 – and so they just brought me some advertisers. I think this is kind of a new hybrid of part placement fee, part brand image, and it works for everybody. They brought me Godiva and Apple. I didn’t come from a sales background so I need to figure out how to get on the brand advertiser radar. In the magazine industry it’s clear that if I scratch your back, you’ll scratch mine. They don’t talk about it, but you will see that all the beauty products that are pitched are also advertised in the magazine. We definitely have editorial integrity; we definitely don’t pick anything that we don’t think is good. But we also think that if all things are equal, we want to go with the company that’s supporting us. Almost every company now has an affiliate relationship. For instance, we are working with Bare Necessities – they were one of our first big supporters. So if we are going to write something about underwear, then we usually use them, and also they usually can get discounts for our readers. For our 2006 underwear guide, I asked our readers, “What is your favorite underwear?” I had someone write me back and say, “Mine is Hanky Panky; can you get us one of those Bare Necessities deals?” S o you see that we have built up some brand equity for them by working together. AW: Does anyone ever ask, ‘What happened to the separation between church and state?’ Do people understand that this is an affiliate relationship? MM: I don’t publicize it in the newsletter. But I could write bad editorial with no affiliate links and then I think people will leave you anyway. I mean look at the growth of magazines like Lucky and Shop Etc. Even the Bliss catalog has become hugely successful. You have to provide a good product no matter what. So if you become a complete shill, then I think people will turn away from you. AW: You say on your website: “I don’t push anything that I myself wouldn’t wear.” MM: Right. Also the playing field has become equal. Everybody’s an affiliate. At this point, it’s not like I have to pick from a small amount [of websites]. Pretty much anything I write about is [from] an affiliate site. AW: Interesting. MM: The shoes that we pick quite often are from Zappos.com. They have an enormous inventory, and they have free shipping and free returns. So that to me is a client bonus. AW: So you planned your whole wedding through the Internet and a lot through affiliate sites? MM: The No. 1 affiliate site I used was eBay. Now I think eBay is a great place to get things. I got my shape-wear through eBay, because it was sold out on my lingerie sites, BareNecessities.com and FigLeaves.com. I got my veil off of eBay. But some of the stuff was not necessarily through affiliate sites, although I did definitely peruse them and would suggest others. For instance, StyleBug.com and EdressMe .com are carrying simple wedding dresses, which is a genius thing because the wedding dress industry is a complete racket. I was invited to sample sales so I ended up buying four dresses. I sold two on the site PreOwnedWeddingDress.com. For instance, I get hit up by jewelry designers all of the time. I ended up having one of them (www.jeannenicole.com) make custom necklaces for my bridesmaids. Another one I was looking at was on a site called Trunkt.com; they are actually an affiliate site. And I found a site through them called Indigo Handloom.com, which has these beautiful shawls. So I ended up getting the shawls for the bridesmaids and for myself. And they’re woven with this silk called mugo, which is from India, and it’s supposed to be good luck. An affiliate site for groomsmen’s ties is Fozieri.com. I shopped for cupcakes online and used Evite for the pre-wedding parties. AW: Did you order your wedding invitations online? MM: My parents did it, but I’m familiar with how they did it. I did order some things from ChelseaPaper.com. I ordered thank-you cards from them. AW: Did you buy your bridesmaids’ dresses online? MM: Everyone picked their own strapless black dress. I sent suggestions as links from BlueFly.com and Nordstrom.com. AW: How about the location for the wedding? MM: Well, I definitely used the Internet to search. I was looking for some type of outdoor space, like a hotel. TheKnot.com has lots of reviews. And Craigslist.com was indispensable for the wedding. I found the reverend on Craigslist. I found my wedding coordinator on Craigslist and my video guy on Craigslist. It was nice to not have to troll stores looking for things. And I wanted to have gold shoes, and I was able to set up with eBay so they would email me every time gold shoes were listed. AW: That’s a good idea. MM: I found my seamstress through a site called ManhattanUsersGuide.com. I found on Craigslist my makeup guy as well. As for the rings, I didn’t buy them, so I didn’t buy those online, although I did search for styles online. I left it up to [my husband]. There’s a diamond guy in the diamond district here [in New York], so that’s where everyone buys. AW: Will your website, WiredBride.com, be an affiliate site? MM: I don’t like the term affiliate site ” that implies we are only out to push the retailer’s promotions. We build sites to help women shop, and brides have a lot of very confusing shopping to do. We will use affiliate links where applicable. ALEXANDRA WHARTON is an editor at Montgomery Research, Inc., Revenue’s parent company. During her four years at MRI, she has edited publications about CRM, supply chain, human performance and healthcare technology. Previously she worked at Internet consulting firm marchFIRST (formerly USWeb/CKS). Filed under: Revenue Tagged under: 09 - January/February 2006, Advertising, affiliate marketing, Branding, Business Models, Features, Interview, mtadmin About the Author Chris Trayhorn, Publisher of mThink Blue Book Chris Trayhorn is the Chairman of the Performance Marketing Industry Blue Ribbon Panel and the CEO of mThink.com, a leading online and content marketing agency. He has founded four successful marketing companies in London and San Francisco in the last 15 years, and is currently the founder and publisher of Revenue+Performance magazine, the magazine of the performance marketing industry since 2002.