Affiliate marketing is entering its adolescent phase, but the lack of standards for delivering data is inflicting some serious growing pains. If the industry is to grow up as well as out, merchants and affiliate networks need to provide affiliates with consistent methods of accessing the data that feeds their development.
While nearly anyone with a Web address can create a static storefront with a few dozen links or banner ads, affiliates looking to stand out from the competition are finding it necessary to incorporate near real-time feeds of product information. These feeds allow affiliates to differentiate themselves by displaying daily promotions, available inventory and updated pricing.
Unfortunately, sales sophistication comes at a cost. Because many merchants and their network intermediaries continue to deliver data using 20th century technology and proprietary data formats, affiliates must develop custom applications for each partner relationship. This time- and resource-consuming process detracts from the goal of promoting products.
The State Of Disunion
Today most affiliates receive creative materials for banner ads and product information as text files delivered via email, or by downloading them from a merchant file transfer protocol site or password-protected Web site.
Chris Henger, senior vice president of marketing and product development for affiliate network Performics, says that the current process is one whereby affiliates are mostly responsible for retrieving the information. In cases where the merchants deliver information to affiliates, it’s usually formatted as XML data or comma-separated value files. But there is no consistency of formats or order of product names, categories or descriptions, Henger says.
Performics converts the merchant data into customized files for each of its 75 affiliates, which requires considerable data massaging and some human intervention, he says. However, he notes that even as technology advances, affiliate networks will continue to deliver information in multiple formats because of the lack of technical sophistication of many affiliates.
“There will always be some (affiliates) who are happy with cut and paste,” Henger says. And for affiliates who sign up to offer products from dozens, or even hundreds, of merchants, that’s a lot of cutting and pasting, which inevitably leads to embarrassing errors.
The level of technical expertise among affiliates varies tremendously, according to Kellie Stevens, president of AffiliateFair-Play.com, an industry advocacy group. Stevens says some networks have developed application scripts to somewhat automate the retrieval of data, and frequently affiliates “install them on the servers without knowing what they do.” And while some affiliates have a background in programming, “For some it’s a stretch just creating a Web page,” she says.
But getting pricing information and daily promotional materials aren’t the only items that have affiliates clamoring for data feed standardization. Most also need to get near-real-time data about their specific commissions, click-through rates on banner ads and raw sales data. The largest networks, including LinkShare and Commission Junction, use the same technologies to track those important affiliate statistics, but affiliates may still have to do some of their own number crunching to figure out the top-selling products and those that are merely taking up screen real estate. Some networks with fewer affiliates provide performance feedback via instant messenger.
Because affiliate marketers are by nature independent-minded and have a variety of opinions on how to streamline the data-sharing process, there is not likely to be a single data standard anytime soon, Stevens says. And because there is also no strong industry association to recommend or impose standards, affiliates will likely have to grapple with proprietary data feeds for the foreseeable future.
Networks Eye RSS
However, a few forward-thinking networks are embracing a standard from the online publishing world that simplifies receiving real-time data feeds. The real simple syndication, or RSS, standard was developed to allow news publishers to seamlessly share headlines and article content with other Web sites and is currently used by many media leaders including Yahoo, the BBC and Wired News. RSS standardizes the XML tags used to identify components of an article and is popular with many Web logs, which also use RSS to publish their own content so that other Web sites can link to it. Online marketers realize that the RSS standard could be used to define tags for product and pricing information and reduce the amount of programming needed to extract information. RSS data can be distributed via email or FTP, or automatically streamed to remote Web servers. To view RSS feeds, you need to obtain an RSS reader application, such as FeedDemon or NetNewsWire, or point your browser to a feed-reading service such as Bloglines or MyFeedster.
One of the early adopters of RSS is diamond jewelry seller Mondera of Bangkok, Thailand. Chris Sanderson, Mondera’s marketing and affiliate partner manager, says the company is turning to RSS because email “has started to reach its limit as a useful tool.” Affiliates, like the rest of the wired world, receive a high volume of spam, so they use email filters that frequently block the data files, he says.
“We needed an easy way to reach out to our affiliates that wouldn’t clutter their mailbox, that they could opt into É and that provides easy access to more detailed information,” Sanderson says. Shawn Collins, who runs several affiliate sites and merchant programs, including ClubMom, is making the transition to RSS for his data feeds. Collins recommends that companies disseminating information via email should switch to RSS because it can be used to get around spam filters. Collins uses NewsGator, a news reader plug-in for Microsoft Outlook that enables RSS feeds to be sent directly to folders without screening by spam filters. RSS enables Collins to more quickly manage multiple programs and affiliates. A small number of affiliates are starting to use RSS but, Collins says, “Most affiliates don’t realize that they are missing out.”
Merchants who aren’t interested in developing technology themselves or negotiating with affiliates are turning to consultants and affiliate management companies for guidance. These groups often minimize the technical hurdles of sharing data with affiliates by taking data in whatever format the merchants prefer and finding a method of matching it with the affiliates’ preferred means of communication. Michael Stalbaum, CEO and affiliate manager of UnREAL Marketing, says affiliates get what they pay for in making a technology investment and that many affiliates are happy using email and FTP files to find out how their shops and ads are performing. However, he notes that the quality tracking of referrals through a timely data feed is key in a performance-based industry. “Since you only get paid when you generate leads, you need to understand what is working and what is not,” Stalbaum says.
Affiliate marketers are looking at the networks to organize the data distribution process using standards such as RSS, according to Gary Stein, senior analyst at JupiterResearch. He says that any standardization is likely to come from larger players like Commission Junction, LinkShare and Performics.
Standardization of product and performance data would give marketers more timely insight into their customers and allow them to more quickly make decisions about promotions. “Product feeds are getting more in demand. If you can set up an automatic feed using RSS, you can do all kinds of things,” he says. For example, if prices change, you can automatically rotate the least expensive item to the top of the list. Stein says that while many marketers grab the cheapest technology to get the job done, “20 percent of the affiliates are really sophisticated and passionate” and are willing to invest in technology.
Blogs: The Interactive Affiliates
Blogs, which are often personal opinion, news and rumor Web sites, have attracted huge followings during the past few years, and they are now monetizing their popularity by becoming affiliates. Entrepre-neurial bloggers are now using scripts to combine their RSS-formatted content with affiliate links. This ensures that when another Web site uses content that features text links to merchants, the original blogger is credited with referring the traffic.
Dick Costolo, CEO of data feed services company FeedBurner, says several networks have asked his company to help them create a commerce solution leveraging RSS feeds. Affiliates who receive RSS feeds no longer have to read through emails or check the Web sites of all their merchants to see if new content has been posted. RSS is a “more efficient way of tracking Web-based content,” he says.
There is a substantial business opportunity to combine blogs and commercial publishing traffic with affiliate marketing, according to Costolo. He claims there are currently about 4 million RSS feeds being distributed, 95 percent of which come from bloggers. Affiliate marketers can have their referral IDs inserted into RSS content streams, enabling them to contextually link within articles while maintaining tracking information.
Costolo recently began working with one of the biggest fish in the affiliate stream, Amazon.com. The online merchant is streamlining its affiliate program using RSS to make it easier to track purchases and associate relevant sale items with content. For example, an affiliate that has content about books can scan the RSS feed to find related content that is continually updated. “We are giving publishers more options by enhancing their feeds,” Costolo says.
Merchants At Your Service
Affiliates looking to partner with the largest online sellers may be required to make a more substantial investment in technology, but in the process they can gain experience with the leading e-commerce standards. Amazon and eBay have granted access to their massive inventories via Web services application programming interfaces, or APIs. Web services are platform-independent applications broken into component functions that are used to share information over the Internet.
Amazon and eBay have provided Web Services blueprints detailing how affiliates can query their databases to obtain real-time price and product information using tools common to many developers, including Java, the simple object access protocol (SOAP) and XML. Through Web services, affiliate developers can access product images, perform searches and find related products through standardized APIs. “The focus [of the Web services initiative] is to give programmers the guts of Amazon’s technology so that they can build a storefront on top of it,” says Jeff Barr, program manager for Amazon’s Web services.
Combining Web services with RSS data feeds is a “great example of creativity” that enables affiliates to mass-produce dynamic Web pages, and “this allows small companies to compete with the bigger guys,” Barr says.
But don’t look for Amazon to provide comprehensive tools that enable affiliates to cut and paste some code or download a utility and immediately hang out their virtual shingle. Barr says the Web services method requires some programming, and third-party companies are filling the void by developing applications that are more affiliate friendly. However, affiliates who aren’t afraid to learn a few simple scripts and shop around for third-party tools could put up a basic site within a few days, he says.
Choosing A Path
Affiliates looking to promote products from many merchants must manage the tradeoffs of committing to create custom feeds for each partner with the overhead of implementing cutting-edge technologies such as RSS and Web services. Or, they can take the path of least resistance and join up with a single affiliate network.
“Signing up with an affiliate network is the way to go,” for most affiliates today, according to JupiterResearch’s Stein. He says it is the affiliate networks’ responsibility to be the trusted source “guaranteeing that all the clicks are being counted.”
However, some affiliates are leery of committing to affiliate networks without being able to understand the networks’ proprietary data feeds that are used to calculate their commissions, according to AffiliateFairPlay’s Stevens. She says the networks were created to intervene between merchants and affiliates, but now some affiliates are learning how the data feeds operate so they can police the networks.
Understanding what goes into your feed is never a bad idea.