Tag: 10 – March/April 2006

Retooling the Web

Microsoft was late in recognizing the profit potential of online search. Meanwhile, upstart Google surpassed older search sites such as AltaVista, America Online and Yahoo to become the clear leader in search and, therefore, online advertising revenue.

In late 2005, Microsoft chairman Bill Gates and chief technical officer Ray Ozzie wrote widely quoted memoranda acknowledging Google’s success and stating that Microsoft would refocus the company’s MSN division to address the “Internet services disruption.”

The Microsoft executives said the software giant would introduce advertising-supported services to the company’s vast portfolio of services and software, which would enable it to access a greater portion of the growing online revenue opportunities. Microsoft, which had become accustomed to defending a leadership position in desktop and server software, is now on the attack, trying to catch up to hyperactive Google, which has become an incessantly moving target.

Who Should Be Afraid

Although some online entrepreneurs may be fearful of becoming casualties in the escalating competition between Microsoft and Google, it’s traditional media companies that are much more likely to see their revenue streams reduced.

For the overwhelming majority of online sellers and service providers, the Microsoft-Google tussle will create more opportunities than it takes away, observers say. Neither MSN nor Google are primarily focused on the areas of selling products, search engine marketing, developing interactive advertising platforms or generating content. MSN may even provide a boost for the partner companies in its shopping and content portals, since MSN search does not exclude other sellers.

Google likewise opens search to anyone and everyone, and one of its main tenets is to remain inclusive. The company’s unofficial motto is “Don’t be evil,” a play on the nickname “Evil Empire” given to Microsoft by high-tech insiders. So far, most industry watchers claim that Google has remained true to its original precept of exposing the universe of digital information and supporting search through ads. The company does not directly sell products or services, and it continues to derive revenue from sharing in advertising dollars, which creates opportunities for both publishers and advertisers.

However, Google is showing an interest, albeit limited, in software development and distribution. Google now offers a desktop search application and Picasa, an image searching utility that could someday become supported through advertising. Google also reached an agreement with longtime Microsoft foe Sun Microsystems to cross-promote products and jointly market “Microsoft-alternative” applications such as OpenOffice.

Regarding the heightened Microsoft-Google competition, Rachel Lyubovitzky, vice president at search engine marketing company Searchfeed, says she doesn’t see any negatives for her customers. She says that by aggregating consumers who were previously a fragmented audience, the companies are “helping to organize Internet populations so that they will be more receptive to people’s messages.”

By convincing a majority of consumers to have either MSN Hotmail accounts or Google home pages, both companies are gathering information en masse, which advertisers love. However, even these users will continue to spend most of their time enjoying the diversity of content and search services available outside of Microsoft and Google, enabling plenty of room for creativity and innovation.

The online advertising market continues to grow rapidly, and Microsoft’s announcement that it would begin to support some of its multi-billion dollars in software and services through advertising is likely to further accelerate the growth. However, it may take several years for Microsoft to develop ad-supported services for the company’s recently announced Windows Live initiative, so don’t expect a major impact in the next 12 months.

Google’s new search services – which will streamline consumers’ ability to find video, music and text published in books – will likely also create a wealth of new advertising inventory options and contribute to market growth.

During the first nine months of 2005 advertisers spent $8.9 billion online, a nearly 29 percent increase over the previous year, according to Pete Petrusky, director of advisor services for accounting firm PricewaterhouseCoopers.

Petrusky expects the double-digit growth of online advertising to continue for the foreseeable future, at the expense of other media buys. Online advertising revenue topped $12 billion in 2005, equal to the amount spent in consumer magazines, and closing in on the $16 billion spent on cable, according to Petrusky.

Increasing inventory through new services led by Microsoft and Google could correct what Petrusky sees as an imbalance between the amount of time spent online and the advertising dollars generated. “The Internet captures about 15 percent of people’s media consumption time,” says Petrusky, “… but only 3 to 4 percent of total ad spend” that includes magazines, newspapers, television and radio.

Newspapers, which have been losing revenue to online classified ad services such as Craigslist and Yahoo, will likely have more trouble competing online when both Google and Microsoft enter the arena. Television broadcasters will see their advertising revenue decline further as Microsoft and Google make it easier for people to browse video and audio content online.

Although both companies are rolling out dozens of new services, they cannot keep up with the wide variety of services created by entrepreneurs – there are too many moles to whack for either company to be dominant in all areas. In the areas where Microsoft and Google do compete with smaller companies, having a powerful brand alone isn’t enough to convince consumers to switch, according to Greg Sterling, program director with analyst firm The Kelsey Group.

“New services can’t be marginally better; they have to be much better” to prompt changes in user loyalty, Sterling says. For example, MSN search and Google’s comparison-shopping engine Froogle and Gmail email have had trouble gaining traction. Therefore, there will always be enough room for innovators such as Digg.com, Flickr.com or MySpace.com to innovate and carve out a niche (or be acquired by big players looking to expand).

Competition Is Good

The intensifying Microsoft-Google rivalry will create a better audience for advertisers and will spur innovation in the technologies that enable people to more quickly find what they are seeking. Microsoft’s interest in advertising- supported services will also provide a necessary counterbalance that prevents Google from becoming a dominant player.

“The more options, the better” for advertisers, says Michael Stalbaum, CEO of interactive marketing and advertising agency UnREAL Marketing. For several years Google has been expanding its reach as the largest player in the largest segment of online advertising dollars, so increasing competition from Microsoft could provide an important alternative solution.

According to Nielsen//NetRatings, the volume of Internet search queries grew 15 percent between June and October 2005 to more than 5.1 billion. Nearly 48 percent of those searches were performed on Google, a figure more than double the closest competitor, Yahoo, and more than four times MSN’s share of search.

If Microsoft were able to become a stronger competitor in search, “it would be a positive for advertisers,” Stalbaum says, because Google may have to revamp its pricing structure. “Prices may come down a little bit,” he says.

Technology at the Core

The primary front in the battle between Microsoft and Google is technology, which will force all participants to continually innovate or risk losing their audience. If Google or Microsoft enters an emerging service area, the existing companies have additional incentive to upgrade their existing products.

For example, in early 2005, Google and Microsoft announced separate projects for digitizing books and making the content searchable. In December, publisher HarperCollins responded by announcing it would do the same for its content.

Charlene Li, principal analyst as Forrester Research, says the increasing competition “gives better products, which leads to better spending options” for advertisers. Products tend to be not only better, but come out more quickly once the powerhouses are involved. “Microsoft and Google participating, and to a lesser extent AOL, accelerates the product development cycle,” says The Kelsey Group’s Sterling.

Google Labs produces a steady stream of new services that make information more accessible, and the company’s willingness to share unfinished ideas with developers is accelerating the rate of technological change. Not surprisingly, Microsoft has shown an increasing willingness to publicly preview technologies and similarly make available its application programming interfaces (APIs) for developers to tinker with and enhance.

Opening up the technologies has proved a boon for third-party development. Innovations from Microsoft and Google are giving momentum to the next generation of interactivity online, designated as “Web 2.0.” Google has included Web 2.0 technology AJAX (asynchronous Javascript and XML) to build interactive Web applications such as Google Maps and Google Reader, a program that aggregates RSS feeds.

Google is also testing new technologies for publishers to structure and describe their content to make it easier to search. Salar Kamangar, vice president of product management at Google, says Google Base (which he emphasizes is not a classified ad service) is an experiment in allowing publishers to tell Google how their data is structured so that the company can deliver better results to consumers.

Rather than requiring Google’s search algorithm to guess how to identify an online seller’s product inventory, Google Base enables publishers to disclose how they format information. Data entered into Google Base is then made available to any Google property, such as Froogle or Local listings. This “increases the amount of content that Google properties can draw from,” Kamangar says.

Similarly, publishers looking to optimize their presence in search results can use Google’s Sitemaps tool to reveal how their sites are organized. Sitemaps “enables us to crawl their sites more effectively,” says Kamangar, adding that spidering websites today relies on following trails of links, making it difficult to detect dynamically generated pages. These efforts give publishers more of a say in how technology is used to influence their search standing.

Microsoft’s next-generation browser, Internet Explorer 7, will automatically discover RSS feeds and include tools for managing feeds. Microsoft also built RSS support into the Vista operating system, which will greatly increase the ability of publishers to widely distribute content by opening up RSS to a mass audience. Microsoft is also developing extensions to RSS known as simple sharing extensions (SSE) that will enable feeds to be shared and synchronized. For example, SSE could give publishers and affiliates the ability to automatically share information about advertising inventories and campaign performance.

The efforts of Google and Microsoft to outdo each other with sophisticated publishing and search technologies increases the burden on marketers to keep up with the innovations or risk having their websites appear lifeless by comparison.

Some publishers are using the available APIs for these emerging technologies to create “mash-ups” that mix data from multiple providers to create new hybrid applications. For example, Frappr.com lets individuals map where their online friends are, while ChicagoCrime.org shows where crimes are committed by matching police data with Google Maps.

Targeting Targeted Ads

Advertisers and consumers will benefit from the increasing competition as Microsoft and Google implement technology that tailors the online experience for each person. Personalized searching and browsing will create audiences that are more receptive to marketing messages.

Through the MSN AdCenter platform, Microsoft began offering advertisers a method of targeting ads to a particular demographic by leveraging data collected from its millions of registered users. When a signed-in user comes to an MSN site, Microsoft anonymously matches the demographic information to the visit, enabling the company to know the gender, age and location of the people who frequent their properties.

By enabling advertisers to target users by demographic characteristics, Microsoft is introducing targeted marketing “in an innocuous way,” says David Berkowitz, director of marketing at online advertising agency Unicast. He says targeted advertising will become “arguably the most groundbreaking innovation for advertisers.”

Berkowitz says that rather than competing with Google based on audience reach (quantity), Microsoft is relying on superior information (quality) about its customers to sway prospective advertisers. “MSN’s plan is not really about better software, but about delivering demographics,” Berkowitz says. Having demographic information about a large audience of registered users gives Microsoft an advantage in targeted marketing. “Forty million Hotmail users is a huge asset.”

Senior director of advertising and marketing Eric Hadley says Microsoft will evolve MSN AdCenter to target ads to people who set up personalized home pages on its websites, including the recently launched Start and Windows Live destinations. MSN AdCenter was first launched to support advertisers on its websites, but then will be rolled out to third-party publishers, putting it as a direct competitor to Google’s dominant AdWords and AdSense products.

Hadley says a future version of the MSN AdCenter will integrate a consumer feedback mechanism. “If you hover over an ad [with your mouse], there will be a pop-up window to say ‘why am I getting this ad?'” Users would be able to request not to see the ad again if the product or service is not of interest to them. For example, married people might not want to receive ads for matchmaker services.

A not insignificant challenge for Microsoft to make MSN AdCenter a success will be to build the marketing relationships with national and regional online publishers and advertisers. Determining how to split the business model for its applications and online services between subscriptions and support through advertising places a learning curve on a company built on selling products.

Microsoft and Google are vying to create personalized experiences by customizing search results based on prior searches, tailoring information preloaded onto home pages, and delivering ads based on user actions.

For a user who has not signed in before visiting an MSN site, Microsoft will use behavioral marketing techniques to generate contextual ads based on the person’s experiences on its network of sites. For example, Hadley says if an unknown customer is browsing the MSN Music site and searches for artists Kanye West and 50 Cent, ads for other rap artists would appear.

Behavioral marketing is effective in generating high conversion rates for advertisers, says Unicast’s Berkowitz. However, because it tracks consumer actions in the background, “it is a bit creepy,” he says. Microsoft and Google need to respect privacy when building personalization services to maintain consumer confidence. “A consumer has to decide who is trustworthy and who is evil. That’s going to be a major wild card” in determining whether or not users will feel comfortable in visiting a website.

Berkowitz also says, however, that companies must be careful in their pursuit of personalization services to prevent consumers from having too narrow of an experience. Google is experimenting by personalizing search results based on prior searches, but this increases the “risk that exposure to other things that might be of interest” could occur.

“I wonder how far you want to go down that personalization road before you lose the communal experience entirely,” he says. For example, Berkowitz says that while he is primarily a New York Mets fan, he doesn’t want a search engine to stop recommending articles about the rest of the league.

Looking forward, Microsoft and Google will determine if and how to commercialize the myriad of beta services that are currently under development while keeping one eye on what the other is doing.

Microsoft will learn the ropes of the ad-supported model for services and software while trying to grow and leverage its audience of registered users. According to MSN’s Hadley, the biggest challenge for Microsoft will come after the AdCenter platform is opened to third-party publishers. “How do we absorb all this demand from [large companies like] American Express to mom-and-pop” marketing firms? “As soon as we open the gates, we have to bring people in quickly with high quality.”

Algorithm-obsessed Google will continue to refine its search technology to better match customer expectations. “We are very far from being where a person can ask a question that brings back a single answer” that matches what they were looking for, says Google’s Kamangar.

For the rest of the decade and likely beyond, Microsoft and Google will continue to play the leading roles in the unfolding drama of the growth of the Internet as a platform for commerce and entertainment. Their perpetual sparring will spur all of the players involved to perform their best to satisfy the audience.

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 MIT’s Technology Review.com.

Mining for Keywords

Now that you’ve set up your search engine marketing campaign and it’s chugging along nicely, how do you take things to the next level? You’ve picked out some good keywords, written some good copy and you’re getting a reasonable ROI, but every time you look at your pay-per-click campaigns, you just know there’s more that you could be doing to maximize your investment. And you know what? You’re right.

The next step is to start prospecting for keywords that are lower in price but still bring good results. Anyone can set up a keyword campaign with all the obvious keywords and spend a bunch of money. Smart marketers know, however, that one of the best ways to beat their competition is to go after those keywords that the competition hasn’t discovered yet. More than 500 million keywords are searched every month on the major search engines, yet only 15 to 20 percent of those keywords have bids. A veritable gold rush of keywords is just waiting to happen.

Admittedly those keywords will have lower volumes of search than all of the one-word and two-word options you are currently bidding on, but the conversion rates will be higher, and by spreading your budget over a larger number of words, you minimize your monetary risk.

The Mining Process

You’ll want to utilize two methods in the mining process. One involves brainstorming, the other research, but good keyword development strategies take advantage of both.

For the first, find yourself a big blank wall and a stack of sticky notes. You’re going to use this wall to start the brainstorming process, but don’t do this alone or, even worse, with your marketing team. You are too close to your website to be objective. You’ve watched its growth and development since it was nothing more than a twinkle in the designer’s eye, and although you may try to think like your customer, nine times out of 10 you will fail to consider all the different ways someone might search for your product or service.

People search in very random ways. Most of them don’t know all the buzzwords, jargon and abbreviations associated with your business, so they don’t use them. Your marketing team may be in the habit of trying to influence your customers to behave in certain ways on your site. Many marketing teams are great at this, but their influence doesn’t extend to the way people are accustomed to searching. They are going to search their way no matter what you think, so your job is to figure out their thought process and put your website in front of them.

The best thing you can do is conduct your own informal focus group. Gather a bunch of your friends, associates, relatives and others, and sit them down in front of that blank wall. Feed them (if that’s the only way you can get them), but try to get folks who know little or nothing about your business. Tell them, “I sell widgets. If you were looking for widgets online, what would you enter into a search engine?” Then get ready to write each keyword on a sticky note as fast as you can. The reason you will want to use sticky notes is that once you have all the keywords written down, it is easy to move them around to create “buckets.” These buckets usually correspond to specific products, price and volume. Once you have those buckets, you can easily set up your categories in Yahoo and your Adgroups in Google. Having these buckets established will also allow you to write relevant titles and descriptions for each, thus minimizing the amount of time spent copywriting.

The second step in the keyword mining process involves using tools to dig for more variations on your keyword bucket themes. You can take all the words your focus group has suggested and use them to expand your lists by plugging them into such keyword research tools as:

  • Yahoo Keyword Selector Tool (searchmarketing.yahoo.com/rc/srch)
  • Google AdWords Keyword Tool (ad words.google.com/select/)
  • KeywordSandbox (https://adwords.google.com/select/ KeywordSandbox)
  • Wordtracker (www.wordtracker.com)
  • KeywordMax (www.keywordmax.com)
  • Keyword Intelligence (www.keyword intelligence.com)

Taking It to the Next Level

While brainstorming and research are crucial to the keyword prospecting process, they are much more effective when combined with other techniques. Take advantage of all the tools and advice available to make your site a veritable gold mine. Here are some time-tested ideas that have worked for me.

Add an internal search engine to your site. This will give you tons of information on how users are finding you. It will also let you know whether users are finding what they want when they get to your site. A good search engine tool can be found at www.freefind.com, or you can find many others by typing “open source search engine” into any search engine. You will want one that just searches your site rather than searching the whole Web, as you obviously don’t want to encourage users to leave your site as soon as they get there.

Check out the source code on your competitors’ sites. You may be able to get ideas for your brainstorming process from some of the keywords they are focusing on. Remember, it’s not a good idea to use the same keywords unless you offer the same product or service, but it’s a good place to start looking for ideas.

Consider your entire website. Many folks stop their keyword research on their home page. They don’t know that their internal pages can provide a wealth of new keywords to attack.

Look for all related words. Make sure you include all variations of a term. Choose words that are singular, plural, misspellings, abbreviations, etc.

As you mine, remember that a “keyword” is not just one or two words. Many keywords are now three, four, five or more words in length – these are the keywords that are producing higher ROI with less investment.

Internet users are becoming more sophisticated in how they search and are utilizing longer keyword phrases to find what they need. Marketers, fortunately for you, aren’t keeping pace with this trend, and that’s what’s driving the prices so high on the one-word and two-word search terms. By thinking a little more creatively, and pursuing more of those niche terms, you can compete very effectively against the big keyword mining companies. After all, a little bit of gold from a lot of rocks is worth just as much as one big nugget. You may have to work harder to get it, but in the end, a gold baron is a gold baron, regardless of how he made his wealth.

MARY O’BRIEN is a partner at Telic Media. She was formerly senior director of sales at Yahoo Search Marketing and is currently presenting their advertiser workshops around the country.

Entrepreneur Sees the Light

While reviewing newbie sites, my heart sinks as I see the world’s zillionth “How to Start a Successful Online Business” site. The aspiring netpreneur, whom I’ll call Bob, has obviously sweat great drops of blood to build his first site, yet he hasn’t seen a dime of revenue.

If only I could talk to him…

“So, what made you choose Internet and affiliate marketing as the topic for your first site, Bob?”

“Well, there are piles of money to be made promoting Internet business info products and software because everyone wants to start an online business and make money on the Internet,” he explains.

I agree that it certainly seems that way, then give him some hard data. Overture’s Keyword Selector Tool shows that “Internet marketing” was queried approximately 250,000 times last month. “Make money online” had just over 67,000 searches. In demand terms, that’s a workable market. To see if it can work for Bob, I ask him some questions about his site. “I see you’re promoting XSitePro and Article Announcer. What do you think of them?”

Bob replies, “Oh, I haven’t bought either. I used a free HTML editor and I use other people’s articles on my site.”

Although I know he doesn’t use an autoresponder service either, because there’s no subscriber signup form on his site, I ask how he likes ABC’s autoresponder service.

Bob tells me that he doesn’t plan to build a list because he’s not into the hassle of putting together an e-course or writing a regular newsletter. His no-knowledge, no-experience responses are consistent until I ask for his thoughts about the Internet/affiliate marketing courses prominently advertised on his home page.

He says they’re great and rattles off the list of Internet and affiliate marketing tutorials and software products he’s bought over the last few months. “Insider’s Secrets was the very first product I bought online, then John Reese’s, Corey Rudl’s, Jim Edwards’, yours and-and-and… .”

I do some quick math and estimate he’s already invested a couple thousand dollars in tutorials and software. I tell Bob that those are excellent resources to be able to refer to in his Internet business library.

“Can you tell me what persuaded you to invest in John’s course?” I ask Bob. “Was it his sales copy, or did you get a recommendation from someone who bought it?”

“I’m not really sure where I learned about it first,” Bob says. He thinks he may have seen an ad for it on Google, but he’s on a lot of different lists, including some of John’s affiliates’ lists, so he may have gotten an email from a couple of them. Bob says he read about the course on John’s site, then posted questions in some of the affiliate marketing forums to find out if anyone really bought the course and whether it worked for them. Bob was convinced to buy John’s course based on the testimonials on the site. He appreciated seeing proof of how well John’s techniques work by showing screenshots of the results some people had after using his system. “There were even links to those sites,” Bob explains.

“Well done,” I say. Like most Internet shoppers, Bob did his due diligence and ended up buying a good product.

“You’ve probably noticed that John Reese’s affiliates continue to recommend Traffic Secrets to their newsletter subscribers,” I explain. The most successful affiliates keep testing John’s techniques and tracking traffic. They broadcast good results to their list and mention that they learned those techniques from the Traffic Secrets course, which they then link to in their message. That’s a stellar example of how the top affiliate marketers work. They find a product they can stand behind and then recommend it to their subscribers, who are interested in products of that type.

Bob remains quiet, so I continue. “The process works exceptionally well when your subscribers know that you aren’t the merchant, but rather an unbiased reviewer who gives them the straight goods.” When you consistently make excellent product recommendations, I tell Bob, both your credibility and income will skyrocket. Unfortunately, a balanced review is pretty hard to write when you haven’t tested a product, and building credibility within a niche is virtually impossible if you aren’t building a list.

I am met with complete silence from my new friend Bob.

I ask, “Did you know that each of the Internet marketing experts you mentioned started online in markets that had nothing to do with Internet marketing products?” John Reese became an eBay expert, Corey Rudl sold car decals, Jim Edwards was into real estate and the single crowd is still my primary market. All of us learned how to market online in businesses related to one of our passionate interests or hobbies.

“When you’re really keen on a topic, it’s easy and fun to share what you know with a group of like-minded individuals – your subscribers,” I tell Bob. “They listen to you, come to like you and then they’ll buy from you. Better yet, passion for your topic will keep you going on those days when you feel like you’re drowning in a sea of cut-and-paste affiliate links or promotional emails from your merchants.”

I ask Bob what he’s passionate about and discover that he lives and breathes martial arts. With Overture’s Keyword Suggestion Tool open, I am able to quickly tell him that there were 241,000 searches for “martial arts” last month. That’s almost the same number as for “Internet marketing,” and we haven’t even begun to look at the permutations. There are martial arts product suppliers with affiliate programs, some with commissions as high as 30 percent. To make the site lucrative, however, Bob will have to build a subscriber list.

“Do you think you could write a regular newsletter about martial arts?” I query.

“For sure,” Bob replies.

“Perfect. And you can keep using your current domain, BlackBeltBobs.com.”

“Awesome!”

“It must be destiny, Bob,” I say. “The only suggestion I’ll make is that you may want to reconsider your royal blue, olive and burgundy color scheme. Check out ColorSchemer.com for some good combinations.”

“Hey, thanks for the great tip, Ros.”

“My pleasure, Bob.”

ROSALIND GARDNER is the author of the best-selling guide to affiliate marketing, The Super Affiliate Handbook: How I Made $436,797 in One Year Selling Other People’s Stuff Online. It is available on Amazon and www.SuperAffiliateHandbook.com.

A Brand New Day for BrandNewDad.com

Not every website sells widgets. But that doesn’t mean every website doesn’t need an effective home page.

In this column, we chose an information portal as our subject. So instead of addressing questions like what the site is selling, and how to make a purchase, our focus was on the proper display of content, use of colors and communicating the benefits of registration.

Our subject is BrandNewDad.com. The site has a wealth of information for fathers, with helpful feature articles, pregnancy information, forums, a shopping directory and various other valuable resources. Unfortunately, the owner succumbed to the common temptation to jam-pack the home page with more options than the eye can bear. The result is a cluttered, confusing, jumbled mess.

As BrandNewDad.com owner Dave Trenck put it, “The site is too busy. ” I’d like to be able to highlight the community aspects of the site, the personalization features and, of course, intertwine all the various affiliate links and support the various CPM and CPC ad placements.”

The goal of this redesign – just as with OriginalDogBiscuit.com (the online purveyor of doggie treats we featured in the last issue) – is to increase conversions. Ultimately, that’s what it is all about.

That’s why I’ve coined the term “Conversion Design” to describe the business of design. You’ll be hearing much more about this concept as the year unfolds because it encompasses critical Web design elements that spark increased conversions, like color theory, usability and copywriting.

How do you increase conversions on a site that does not peddle products? Conversion Design is not always about direct sales. Sometimes it’s about indirect sales, or even qualified sales leads. Trenck’s goal, for example, is to woo site registrants so that in addition to serving up personalized content, he can display targeted ads that convert at higher percentages than their untargeted counterparts. In this case, registrants are considered conversions.

Our task was to redesign the home page to make the site’s benefits crystal clear. At the same time, the home page would need to soft-sell the advantages of free registration. The end result would be more registered users, more repeat visitors and more ad revenue for BrandNewDad.com. That’s good news for Trenck, but we’ve got to wade through the bad news to get there.

When we showed the original site to our small yet highly critical focus group, phrases like “too wordy,” “too much info,” “unclear navigation” and “no main point of interest” echoed through the meeting. Vincent Flanders, author of Web Pages That Suck: Learn Good Design by Looking at Bad Design, probably would have agreed. He lists having too much material on one page as one of his top 10 Web design mistakes. According to Flanders, “With so much content vying for attention, it’s initially impossible for the eye to settle on one thing. People get confused and people leave.”

BEFORE

Sostre & Associates’ art director Jason Graham has a slightly different take on the issue of displaying too much content: “A good site should lead me or suggest to me what content I might find useful. The biggest problem with BrandNewDad.com is that even though things are categorized, it doesn’t feel like they are.”

Graham’s guiding concept for our approach: Group the content into clearly defined categories so visitors can easily move through the page. This is referred to in the design industry as “chunking.”

AFTER

“The idea is to categorize and then visually group information, as opposed to letting it all bleed together,” Graham says. “We can do that by adding more white space between the elements and making the headlines or titles larger. Chunking helps to make the page scannable so we can still include all the same information that the website currently has, but now it’s easy to understand.”

Besides better content organization, we took three additional steps in our quest to make the home page more user-friendly: reducing the navigational elements, decreasing the number of colors and increasing the white space.

Like other sites with loads of content, BrandNewDad.com wants users to see it all. That’s why the site has so many options in its main navigation. In our experience, however, having too many navigation buttons can overwhelm visitors. So we reduced the number of buttons to five and repositioned the missing navigation items.

Next up: colors. The site uses six colors throughout the various user-interface elements. This mishmash spectrum contributes to the busy, uncomfortable feeling our focus group verbalized. We cut this number in half and allowed a three-color scheme to help unify the design.

White space can be tricky. On one hand, if we overdo it, we waste space that could be displaying information. On the other hand, if we don’t have enough white space, we end up with a cluttered mess. In this case, we definitely needed to increase white space to achieve the “chunking” Graham mentioned.

Our redesign simplified the site without sacrificing important information, making it easier for new visitors to understand the site’s benefits. Once the visitors are sold on the site, enticing them to register and personalize their experience is much more likely. We can encourage registration by highlighting personalization features and positioning the “register” and “sign in” links in standard locations.

We’ve taken the important first steps of giving this home page a much-needed overhaul. But the work should not stop there. An essential aspect of Conversion Design is continuous testing and review. Websites should be reviewed and tweaked frequently to ensure that their creators are getting the best possible outcome. User feedback and a careful eye for conversion rates should be the guiding factors in this process.

Would you like to get a free home page or landing page design for your website and see it featured in this column? To be considered, please send your name, company, contact information (phone, email, etc.), a brief description of your business and its goals, and, of course, your URL to bydesign@sostreassoc.com. Please put “Revenue’s By Design Makeover” in the subject header.

PEDRO SOSTRE is principal and creative director at Sostre & Associates, a consulting and development firm, which also promotes affiliate programs. Pedro is currently working on a book about his new concept of Conversion Design, scheduled for release this summer.

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.

The Best Intentions

Effective self-marketing is the quickest path to success.

Whether you know it or not, you’re marketing yourself every day – to lots of people. You’re marketing yourself in a quest to make a sale, warm up a relationship, get a job, get connected, get something you deserve. You’re always sending messages about yourself.

Guerrillas control the messages that they send. It’s all about intention. Guerrillas live intentionally. Non-guerrillas send unintentional messages, even if those messages sabotage their overall goals in life. They want to close a sale for a consulting contract, but their inability to make eye contact or their confusing email message turns off the prospect.

Avoid Unintentional Messages

Unintentional messages erect an insurmountable barrier. Your job is to be sure there is no barrier. There are really two people within you – your accidental self and your intentional self. Most people are able to conduct about 95 percent of their lives by intent. But that’s not enough.

It’s the other 5 percent that can get you in trouble – or in clover. I’m not talking about phoniness here. The idea is for you to be who you are and not who you aren’t – to be aware of what you’re doing, aware of whether or not your actions communicate ideas that will help you get what you truly deserve.

Who do you market to without even realizing it? Employees. Customers. Prospects. Teachers. Parents. Children. Bosses. Prospective employers. Mates. Prospective mates. Friends. Sellers. Landlords. Neighbors. Professionals. Members of the community. The police. Service people. Family. Bankers. These people can help you or stop you from getting what you deserve. You can influence them with how you market yourself.

To market yourself properly, answer these three questions:

  1. Who are you now – if friends described you, what would they say? Be honest.
  2. What do you want out of life? Be specific for the best results.
  3. How will you know when you’ve reached your goals?

If you can’t answer these questions, you’re doomed to accidental marketing and spending your life reacting instead of responding, and the odds will be against you reaching your goals.

How do you send messages and market yourself right now? With your appearance, to be sure. You also market with your eye contact and body language, your habits, your speech patterns. You market yourself in print with your letters, email, website, notes, faxes, brochures and other printed material. You also market yourself with your attitude and ethics.

Again, you may not be aware of it, but people are constantly judging and assessing you by noticing many things. You must be sure your marketing message doesn’t conflict with your dreams. What are people using to base their opinions, to make their decisions about you? I’ve come up with more than 30 variables, but here are the top 10:

  1. Clothing
  2. Enthusiasm
  3. Neatness
  4. Tone of voice
  5. Energy level
  6. Eye contact
  7. Writing ability
  8. Spelling
  9. Business card
  10. Availability

You’re fully aware of your intentional marketing, and you invest time, energy and imagination into it, not to mention money. But you may be undermining that investment if you’re not paying attention to things that matter to others even more than what you say. These are things such as keeping promises, punctuality, honesty, demeanor, respect, gratitude, sincerity, feedback, initiative and reliability. People also notice passion – or the absence of it. They notice how well you listen to them.

How to Market Yourself

Now that you know these things, what should you do? Ben Franklin said that three of the hardest things in the world are diamonds, steel and knowing yourself. Here’s a three-step plan to get you started on the road to self-awareness and self-marketing acumen.

  1. Write a positioning statement about yourself. Identify just who you are and the positive things that stand out most about you.
  2. Identify your goals. Put into writing the three things you’d most like to achieve during the next three months, three years and 10 years.
  3. State your measuring stick. Write the details of how you will know when you’ve achieved your goals. Be brief and specific.

To guerrilla market yourself, simply be aware of and in control of the messages you send. Do so and your goals will be a lot easier to attain.

Look at your policies, procedures and daily management practices. What behaviors are you measuring and rewarding? Examine your purchasing and pricing practices – these impact your brand far more than anything you might say in your ads. Finally, look at your website through the eyes of your customers – you’ll begin to glimpse the truth of your brand.

Taking Action

Examine the soul of your company through your daily actions, not your beliefs, and you’ll soon be able to write branding ads that will ring like a bell. Behold the keys to successful brand writing:

Truth in advertising. Bad ads are filled with phrases you like to say about yourself. Good ads are filled with what your customers say about you when you’re not around. To be successful, your branding ads must sharply echo the word on the street about your company. Jeff Bezos, CEO of Amazon.com, got it right when he said, "It has always seemed to me that your brand is formed primarily not by what your company says about itself, but what the company does." You’ll discover the truth behind your brand when you can explain why customers come back.

Overstatement is passé. Offer proof to back up what you say, even if it lies only in your customers’ experience or assumptions. Branding isn’t just about the facts: People buy brands with their hearts as well as their heads. Brand loyalty is built on the fact that our purchases remind us – and tell the world around us – who we are.

Search for evocative words. Sniff out overused phrases. Stimulate customers’ minds with thoughts more interesting than the ones they were previously thinking.

Be consistent. The consistent use of the same colors and fonts is often called "branding." Your brand should remain constant in all communications from your company, including your website, email, brochures, business cards and so on.

Brands are built on consistency, the roots of which are patience and attention to detail. It’s going to take a lot longer to build your brand than you feel it should. Here’s the bottom line: If you think you’re going to be able to measure brand progress at the end of 12 short months, you’re dreaming. Brand development isn’t measured in months, but in years. Good luck with your brand.

Remember always that you are your own brand, and that if you’re not guerrilla marketing yourself, you are falling short of what you ought to be doing.

 

JAY CONRAD LEVINSON is the acknowledged father of guerrilla marketing with more than 14 million books sold in his Guerrilla Marketing series, now in 41 languages. His websites can be found at www.gmarketing.com and www.guerrillamarketingassociation.com.

Scrutiny on the Bounty

As every good bounty hunter knows, capturing your target requires exacting execution of a well-designed plan. But unlike intrepid fugitive hunters such as reality television star “Dog” Chapman, earning sizable rewards by corralling customers online doesn’t require risking life or limb.

Instead of offering commissions paid in nickels and dimes, bounty programs attract a growing number of publishers by handing out dollar rewards of tens and twenties. Programs offering substantial bounties for acquiring customers and qualified leads are now among the most lucrative opportunities for publishers. However, the increasing competition among bounty programs requires publishers to rigorously scrutinize leads and to be more aggressive in pursuing consumers.

“The biggest money in affiliate marketing is bounty programs,” says Beth Kirsch, group manager of affiliate programs at LowerMyBills.com. Kirsch, who says publishers can earn up to $75 for delivering a credit card customer, says bounties provide the greatest opportunity for rapidly increasing revenue “without going for porn or gambling.”

Companies on the hunt for consumers will pay hefty premiums “because advertisers are willing to pay up front for the lifetime value of the customer,” Kirsch says. Unlike retail sites that focus on capturing a single transaction, the companies paying bounties are looking to build an ongoing relationship with a customer. The most popular industries utilizing bounty programs include real estate, personal finance (such as credit cards and loans) and subscription services, according to Kirsch.

Kirsch says that while most bounty programs pay commissions after a transaction is completed, companies such as Netflix and Audible.com will pay out merely for getting people to sign up for free trials. “The amount of money flowing through [bounty programs] is amazing,” she says.

Leading to Search

The prospect of earning lucrative commissions is prompting companies to increase their online advertising as well as the incentives offered to attract consumers. Sites such as FreeiPods.com that are relying on search marketing to acquire new customers now make up 6 percent of total online advertising revenue, according to the Internet Advertising Bureau. During the first half of 2005, online advertising revenues for lead generation and customer acquisition rose by more than 200 percent over the prior year to $347 million.

“Paid search is a focus for customer acquisition,” says Shar VanBoskirk, a consulting analyst with Forrester Research. VanBoskirk says that search marketing is an effective tool for bounty sites in industries such as travel because it “captures a person at their point of interest.” The increased spending is raising the cost of keywords and encouraging companies to become smarter at search marketing, she says.

To earn these bounties, publishers are aggressively pursuing consumers by promising cash incentives and free popular electronic devices such as iPod music players and Xbox 360 game consoles to those who will fill out a credit application or subscribe to a publication or service. These sites have found that consumers are willing to provide personal information as well as refer several friends in order to receive a device worth up to $400.

However, VanBoskirk says that while some marketers do not seem to be concerned with how their publishing partners attract an audience for their subscription or financial service, they may be putting their customer relationships at risk. “You could turn away a loyal customer if you were associated with a bad brand or screwed-up message,” says VanBoskirk, who recommends that marketers retain some control over the incentive process.

Service and subscription companies looking to acquire customers are among the top individual Internet advertisers. According to Nielsen//NetRatings AdRelevance advertising data for November 2005, telephony company Vonage spent more than any other company in online advertising, while LowerMyBills.com, BellSouth Corp., Netflix, Verizon and QuinStreet were also in the top 10.

Interest in bounty programs has spurred the development of specialty performance networks, such as QuinStreet, Adteractive, AzoogleAds and MetaReward, that are focused on customer acquisition and lead generation. These networks are bypassing the largest networks and offer generous bounties to publishers who can funnel traffic to their clients.

“To the extent that you can deliver more quality leads, advertisers are willing to pay for them,” says J.B. Orecchia, president of MetaReward.

Detailing the Demographics

Orecchia says the increasing competition among bounty programs is prompting marketers to collect more extensive demographic and lifestyle information so that they can match consumers with advertisers. MetaReward collects date of birth, gender and address information as part of their registration process. The company, which along with Lower MyBills.com and PriceGrabber.com are subsidiaries of Experian Interactive, analyzes the information and delivers targeted advertisements for its advertising clients.

“Deriving positive return on investment from cost-per-lead/account programs relies on the marketer’s ability to match the consumer profile with the type of customer the advertiser is looking for,” according to Orecchia. “It all comes down to yield management,” he says. “Marketers must identify the characteristics of the programs that maximize the quality of the leads.”

Orecchia says his clients do not want to filter out bad data themselves, so publishers must scrub the lead data at the same time it is being collected. MetaReward relies on technology developed by parent company Experian to verify the authenticity of address information as well as remove duplicate leads in real time so that the consumer experience is not disrupted.

Publishers need to be diligent in filtering consumer data because consumers are being more creative in trying to scam companies out of free goods, according to Greg Morey, executive vice president at marketing consulting firm GR Wyse. “The free iPod generation prompted people to [find new ways] to beat the system.”

Morey says despite improvements in screening submissions, there is “still a high amount of bad data” being submitted to lead-generation sites. He says the additional techniques for weeding out spurious information, including email verification, double opt-in steps and survey questionnaires, are increasing the cost of processing leads. In recent years the cost to publishers of verifying a lead has risen from approximately 50 cents to more than $2.

Data verification companies such as TARGUS info use multiple databases to check the authenticity of information in real time. These databases not only verify that the phone numbers and addresses are valid, but also that they match the names of the person filling out the form, Morey says. After a form is submitted, TARGUS info checks the data and, if it is valid, consumers are sent to a landing page from the advertiser.

Morey says competitive verticals such as travel companies, vitamin supplements and mortgage lenders are willing to pay the additional cost to reduce the number of bogus leads.

Media Get Their Share

Publishers and broadcasters are also receiving bounties by converting audience members into leads. Technology from LiveDeal enables newspapers and radio stations to host classifieds on their websites and receive commissions for leads, according to Steve Harmon, vice president of corporate development at LiveDeal.

Harmon says publishers that are losing revenue from classifieds to companies such as Monster.com and Craigslist can earn between $10 and $30 for a lead on a vehicle, and between $30 and $300 for a real estate lead. LiveDeal partnered with radio and advertising giant Clear Channel Communications to create classified site SFBayAuto.com. ClearChannel promotes the classifieds on its six San Francisco Bay area radio stations, and the media companies receive a bounty when someone clicks on a vehicle listing and then fills out a form with her contact information.

LiveDeal provides all of the technology, including the classified listings, e-commerce and images of the items for sale, according to Harmon. The lead-generation service, which went online in 2005, enables media companies, which already collect extensive demographic information about their audience, to connect their fans with products that are likely to be of interest.

Turning Leads to Clicks

Performance network Kanoodle has developed a program for niche publishers who can earn small bounties by sharing information about their site’s visitors with larger publishers. BrightAds, which became available in December 2005, is a third-party cookie program that uses information collected on a website to generate relevant ads on another, according to Doug Perlson, Kanoodle’s chief operating officer.

For example, a golf blog or enthusiast site will install BrightAds software, which places cookies on consumers’ computers to record their activities while on the site. Should that consumer then go to a Kanoodle partner site such as MSNBC.com to check the weather, the cookie information would be retrieved, and they would be shown a golf-related advertisement.

“Third-party cookies are going to be the lifeblood of publications that offer free content,” Perlson says.

When a consumer clicks on an ad, Kanoodle gives 5 percent of the revenue from the publisher to the referring web- site, according to Perlson. Because BrightAds has no exclusivity requirements and does not conflict with existing advertising programs, publishers can earn additional revenue without having to modify their current relationships, he says. And while getting a sliver of the PPC commission (Perlson says the money comes from Kanoodle’s share, not the publisher’s) may not sound like much, third-party cookies can be delivered to all consumers who don’t actively block them.

This “stealth” referral program leverages the information collected by niche sites with dedicated audiences to deliver ads to general interest sites, according to Perlson, who expects consumers to become more comfortable with third- party cookies as they realize the benefits of being exposed to more targeted ads. To address privacy concerns, Kanoodle deletes the cookie information after a maximum of 30 days, and sometimes in less than a week.

Forrester’s VanBoskirk says that while BrightAds helps larger publishers to optimize the yields from the ad programs by targeting customers, some consumers may be concerned when they realize that behavioral information is being shared among sites. Consumers are gradually learning that visiting sites utilizing cookies can provide a better experience, but the cookie placement has to be made known to consumers. “Responsible publishers will want to explain that they are collecting cookies,” VanBoskirk says.

She also notes that some small publishers may have reservations that participating in third-party cookie programs could help competitors. “The biggest concern is that a third party will be selling data to another advertiser,” she says.

Going Offline

Publishers in industries that are completed by offline transactions have been limited to pay-per-lead programs, but new technology allows bounties also to be paid on a pending-sale basis. Because advertisers control the offline sales process, fraud is a concern for publishers, according to Jackie Bates, Web marketing director for affiliate network LinkConnector.

LinkConnector’s pending-sale technology enables publishers to follow a campaign’s performance by tracking the progress of the consumer-seller activity until it is completed, Bates says. LinkConnector monitors the progress when leads become pending sales, such as vacation packages or jewelry where sales representatives are often needed to close the deal, she adds.

LinkConnector passes a completed call form from the publisher to the seller, which initiates the monitoring process. The network provides publishers with status reports and processes the payments to guarantee that publishers are compensated, according to Bates.

Bates says the technology gives merchants that do not have online shopping carts more flexibility in setting commission structures. LinkConnector “enables more merchants to come into the affiliate marketing game,” Bates says.

Bounty programs are popular with publishers because of the substantially higher commissions offered for capturing new customers. New tools that clean up lead data and collect more extensive demographic information will make them more useful both to advertisers and consumers.

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 MIT’s TechnologyReview.com.

Power Tools

Sometimes even the simplest tasks can only be performed using the right tools. There’s no point in using a chain saw when a paring knife will do the job.

These are not reviews, ratings or recommendations. It’s just a collection of software, services and tools that we’ve come across and wanted to share with you. Here they are in no specific order.

T3Report.com

CyData Services Inc., based in Austin, Texas, has taken its competitive analysis reports that detail the linking relationships of websites, previously sold exclusively to the online adult industry, and adapted them for the affiliate and performance marketing space.

Called T3Report.com, the subscription service performs its own spidering of the Web to gather data from more than 100,000 Web pages. The service can offer its subscribers competitive market analysis about who rivals are linking to and who is linking to them. It would allow affiliate managers with merchants to see the affiliates of their competitors. And the idea is to then target those affiliates to also join their programs or possibly emulate the strategy of competitors, according to officials at CyData.

The company claims all of the data gathered is publicly available, but previously it was hard to obtain – mostly because other services such as Google and Alexa go through only the first 1,000 pages of relevant data, leaving much data untouched.

There is a full-featured version as well as a light one of the offering, which can be subscribed to on a quarterly basis. Users pay to access the T3Report.com online system, which the company claims can be easily navigated by even novices after a brief tutorial.

The pricing is based on the number of domains in the report. For detailed analysis of less than 500 domains, the price is $2,700 per quarter. Pricing goes up for more than 500 domains.

The full version gives subscribers three levels of domain-linking information. For example, users would be able to find out who Walmart.com links to, who is linking to Walmart.com and then who links to those linking to Walmart.com. The light version does not delve as deep and offers only the first two levels of linking information for the user.

The company claims that, given an affiliate network link, the product can map that to the merchant, basically revealing what is in the “black box” with the affiliate network. This works because networks use LinkSynergy.com as the linking domain by affiliates, and then they redirect to the merchant. T3Report.com has more than 650,000 LinkSynergy links in its database, with more than 5 million added each day.

For each domain, the product can show how many unique domains link to it as well as the number of links. These statistics can reveal how many websites are promoting a specific merchant.

Company officials claim that they can spot all the websites that belong to a specific affiliate and track which products they are promoting. And given the same product on two networks, they can show which is doing better as far as promotions by affiliates.

ReturnOnAffiliate.com

These days communication is a big issue for online marketers. Return on Affiliate, an online affiliate marketing meeting space, is attempting to bridge the gaps of this industry and bring affiliate marketers, managers and associates together in a single place to communicate.

ReturnOnAffiliate.com is a community that includes message boards, instant messaging, private messaging, the ability to link to other members, invite friends and colleagues (like LinkedIn) into your circle, as well as the ability to create blogs. It’s free to set up an account, and members have access to searchable profiles of Return on Affiliate members.

Just one month after launching at the start of 2006, the site had more than 700 members. The groups include all types of affiliates, merchants and industry types. Everyone from working moms to Overstock.com executives are members. The site is attempting to use the popular social-networking concept to make managers, community leaders and even CEOs accessible to affiliates.

SimpleFeed Version 2.6

SimpleFeed (www.SimpleFeed.com), based in Palo Alto, Calif., unveiled an updated version of its SimpleFeed RSS service.

The new release (Version 2.6) rolled out in February builds off the company’s most recent major upgrade (Version 2.0), which came out in November. That edition was aimed at giving marketing departments more options for personalized content and increased control over the management, measurement and branding of RSS feeds by using templates as the basis for creating collateral to communicate with customers. By using templates, users are able to publish RSS feed that look like their websites, including the same images, colors, fonts and the like that customers use.

SimpleFeed Version 2.6 includes a handful of new features and functionality such as secure feeds and the ability to automatically import content as well as a light version of the product.

Like the previous release, SimpleFeed continues to publish RSS feeds through a URL that is unique to each subscriber. Version 2.6 now offers content creators the option to require a security code or authentication. Those feeds are also sent out over a secure SSL link. If a specific Web portal doesn’t support such authentication, such as Yahoo, then only a summary of the feed, not the actual feed content, will be sent. The next version of Windows – called Vista – along with Microsoft’s forthcoming upgrade to Explorer, will both support passwords and authentication.

The product’s new Web Import feature also allows content creators to put together RSS feeds another way. Users can choose a specific page number or a page range and the SimpleFeed software will automatically spider the user’s website to pull out the correct content. That content will then be queued up to be published on the site and then subsequently pushed out in an RSS feed. This functionality enables content creators to skip the step of putting together RSS feeds manually or with templates.

SimpleFeed is also offering a light version of the product, which gives users less reporting functionality. (Users get eight reports rather than the 48 that are included in the full-featured Enterprise version.) Users of the light version do not get a fully templated RSS feed. The feed is in a template, but it cannot be changed or fully customized. Company logos can be added to feeds, however. Company officials say the light version is a good way for smaller businesses to evaluate the technology at a reasonable price ($100 per month per feed).

The product also builds on capabilities from the previous version, including SimpleTag, a personalization technology that enables customers and prospects to subscribe to content categories using checkboxes on an uncluttered subscription page. The product’s Measurement and Analytics Suite sports 48 customizable reports providing insight on key RSS statistics such as subscribers, content views and clickthroughs. Feed Publishing and Management is a Web-based tool that allows feeds to be created and managed without any prior technical knowledge. New privileges provide companies with granular control of users and workflow and can readily comply with corporate communication policies.

The Affiliate AIM List

Here’s another way to facilitate communication via a very simple concept. Affiliate AIM List (AffAimList.com) is a list of the AOL Instant Messenger handles of people in the industry. Members opt to sign up and are then added to the buddy lists of all other members. That allows everyone on the list to see who is offline or logged into IM and then contact them directly.

The Affiliate AIM List was created by affiliate Adam Viener to facilitate communication among the many different parties comprising the affiliate community. Viener, president of search marketing affiliate IMWave, is a fan of AOL Instant Messenger from way back and thought the communication tool would be a great way to foster better and more frequent communication between people. The list is not a money-making vehicle but more of a community service, Viener says.

To date, it’s been well-received, and the ever-growing list boasts some high-profile industry leaders from top companies including Circuit City, Commission Junction, eBay, Fat Wallet, HomeGain, KowaBunga, LinkShare, Performics and PrimeQ. Viener says that while he’s getting lots of requests to be added to the list, only two users have asked to be removed.

SmallPalace.com

VentureDirect Worldwide recently launched its newest online lead-generation portal, SmallPalace.com, which is aimed at the home finance and home services markets.

Mortgage refinancing has exploded into one of the fastest-growing sectors of the financial services industry. In 2005, one-third of all homeowners used cash- out mortgages to refinance their homes, and more consumers are planning to divert discretionary spending to home improvements.

SmallPalace.com focuses on delivering Web-based, category-specific leads that are generated from applicants actively seeking information on new home purchases, mortgages, refinancing or a variety of home services categories such as home security and contractors.

The SmallPalace portal joins other online lead-generation sites developed by VentureDirect Worldwide, including Direct Degree (www.DirectDegree.com) for online education, Let’s Franchise (www.LetsFranchise.com) for franchise opportunities, and The Free Forum Network (www.FreeForum.com), a co-registration site.

Pic2Vid for Marketers

Sister Technologies, which provides applications and hosted services for the automated creation and management of multimedia marketing content for online retail and mobile environments, recently released its Pic2Vid for Marketers solution suite.

Pic2Vid is a Web-based solution that automatically generates streaming video content with voiceovers from digital photos and text, enabling online marketers to enhance each product and listing with attention-grabbing video clips.

The Pic2Vid for Marketers solution suite consists of two parts: Pic2Vid Hosted and Pic2Vid Enterprise.

Pic2Vid Hosted is a fully hosted, Web- based solution aimed at auction-site power sellers, small and mid-size retailers and service providers, and online marketers and affiliates. The company’s Pic2Vid Enterprise is a turnkey, scalable hardware/software solution for large brick-and-mortar retailers with significant online businesses, including auction sites, shopping sites and industry portals, as well as resellers such as aggregators, service providers, Web publishers and creative agencies. A demo of the Pic2Vid Consumer version can be found at Pic2Vid.com.

Sister Technologies is also working on a new tool, based on the Pic2Vid and “M- Plat” online editing platforms that will enable advertisers to create short video clips that would appear alongside organic search engine listings.

There are only a handful of steps involved in creating a video, and within approximately two minutes a user can create a 15-second clip that could appear beside their organic search listing or as part of a paid listing. Pricing is about 1 cent per minute of broadcast. A one- minute clip that receives a thousand views would cost the advertiser $10.

Affiliate Market Maturing

The affiliate space is getting more sophisticated and complex, according to the findings of the AffStat 2006 Report, an annual study examining the state of the affiliate marketing industry.

Released earlier this year by Shawn Collins Consulting, the survey polled nearly 200 affiliate managers from a cross section of the industry on their overall statistics, as well as a number of issues about their affiliate marketing channels, such as staffing, recruiting and management.

Of those surveyed, 77 percent were pay-per-sale, 19 percent pay-per-lead and 4 percent bounty affiliate programs, which is almost exactly in line with the report’s 2005 breakout of how companies paid out commissions.

Over the last year, however, the size of pay-per-sale programs seems to have shifted. The latest report shows an increase in the number of affiliates in the midrange, with 23 percent of this year’s respondents reporting 5,001 to 10,000 affiliates compared to 13 percent a year ago, yet 18 percent said they had too many affiliates to manage effectively.

The trend toward smaller programs is also on the rise. A year ago, 16 percent of respondents had between 2,001 and 5,000 affiliates. The latest figure jumped 7 percent for 2006. Last year, however, 26 percent of respondents had 5,000 or more affiliates and rose just 3 percent for 2006.

Part of moving to small programs is that merchants are giving more scrutiny to the affiliate approval process. And while 17 percent still approve affiliates manually, that is down from 23 percent for the previous year.

Another interesting finding from the survey: Nearly two-thirds of in-house affiliate managers earn $40,000 to $80,000 a year. In the pay-per-sale programs, 71 percent had dedicated affiliate managers; 24 percent had fewer than 500 affiliates; 22 percent had 501 to 2,000 affiliates; 23 percent had between 2,001 and 5,000 affiliates; 15 percent had 5,001 to 10,000; and 14 percent had more than 10,000 affiliates.

Commission Junction continued to lead the pack when it came to which affiliate networks, solution providers or software solutions were being used to track affiliate programs. CJ had 31 percent of the total survey respondents, up from 26 percent in 2005. Some of that gain is likely from Be Free, which is owned by Commission Junction. Be Free dropped 2 percent to comprise 6 percent of this year’s total for respondents.

The use of homegrown tracking solutions rose to 22 percent from 17 percent in 2005. LinkShare moved up 2 percent from last year, to account for 11 percent in 2006. Performics also gained some ground; up to 3 percent from 2 percent in 2005, while ShareASale.com inched up 1 percent to reach 6 percent overall for 2006.

Still, some lost ground. My Affiliate Program//KowaBunga dropped to 8 percent from 13 percent for 2005. Direct Track dipped to 8 percent from 9 percent in 2005, while the response for “other” dipped to 5 percent from 9 percent in 2005.

There was virtually no change in attitude from 2005 to 2006 in responses to the question, “Do you permit your affiliates to bid on your trademark name in pay-per-click search engines?” Fifty-nine percent responded no; 29 percent said yes; 7 percent said yes, but with restrictions; and 5 percent did not know.

As for blogging, of those surveyed, 21 percent had a blog, compared to 15 percent last year.

And the biggest challenge for affiliate marketing for 2006, according to the report, continues to be recruiting new affiliates. This year 31 percent cited it as the largest challenge, compared with 24 percent in 2005.

The entire report can be found at http://www.affstat.com/products.shtml.

Lost in Translation

Ten years ago, Jaime lived outside Managua, Nicaragua, worked in a shoe factory and took college classes. The then-35-year-old did not own a car and shared a house, a TV and a stereo with his parents, along with his brother and sister- in-law. Both Jaime and his brother helped his parents pay the rent, and the rest of Jaime’s paycheck went toward saving for a move to the United States.

Now Jaime lives in Daly City, Calif. He works as a bookkeeper in San Francisco and rents a house with his girlfriend, Aura, and her 12-year-old son, Juan. Together they share a car, own a TV, a computer, a stereo and cell phones.

They got on the Internet five years ago and Jaime spends about two hours a day online, surfing the Web and doing email. Aura has difficulty reading and does not use the computer at all, but her son spends about an hour a day playing computer games.

Jaime reads news about Nicaragua at the La Prensa website and reads U.S. national and local news in Spanish at the Univision and StarMedia sites. He also regularly reads the Latino Channel on AOL, especially for entertainment and sports news.

The La Prensa site also helps keep him up to date with his favorite baseball team, El Boer, as well as delivering news about his other hobbies – following the Brazilian soccer team and seeing what’s happening in the boxing arena. To follow news about his new local sports teams – the San Francisco Giants and the 49ers, he watches TV. He also uses the Spanish version of Western Union’s website, geared for U.S.- based Hispanics, to check exchange rates, but he goes to the physical location to send money back home.

For his past two trips to Nicaragua, Jaime bought plane tickets at Expedia.com, a site he visits often to check prices. As time passes, he says he feels more comfortable with the security of purchasing online, but he has only bought plane tickets from the Web so far because he likes the experience of shopping in a brick-and-mortar store so he can check the quality of products and walk around.

Because of the financial opportunities in the United States, many of Jaime’s relatives also now live here. Jaime feels that he is living the American dream. He does not know that he is quickly becoming a marketer’s dream. As a 45-year-old bilingual male with a combined household income of more than $50,000 – 8 percent of it disposable – Jaime and his household are part of a U.S. demographic with a purchasing power that dwarfs all other minority groups.

By 2007, the Selig Center for Economic Growth projects that disposable income in the Hispanic market will approach $1 trillion, which represents 9.4 percent of all disposable income in the United States.

Hispanics in America

Understanding the untapped opportunity of Hispanics online requires knowing more about the U.S. Hispanic population. And these days, there is no shortage of research, reports and studies examining this group.

In 2002 the U.S. Census Bureau announced that Hispanics are the largest minority in the United States with 13.4 percent of the population – or 38.8 million people. By 2020, Latinos are projected to be 21 percent of the population, and a third of them will be under age 18, which is another highly desirable segment for marketers.

But it’s not just the size of this group, it’s how much money they are making and where they are spending it. Hispanics are increasingly the major driving force behind revenue growth in consumer product and service markets, a $690 billion market that has attracted the attention of online marketers and retailers.

And while the median income for American households increased just 6 percent between 1996 and 2001, the median income of Hispanic households rose by 20 percent, from $27,977 to $33,565, during the same period. As of 2002, 31 percent of U.S. Hispanic households had an income of $50,000 or more, according to Scarborough Research and Arbitron.

So, as the Hispanic population is making more money, larger numbers of Hispanics are also getting online. Market researcher Centris found that the number of Hispanic online households in 2003 was 5.5 million.

A study by AOL/Roper reported that Hispanics go online 13.8 hours per week at work and 9.5 hours at home, compared with 8.4 hours at home for the general online population.

Hispanics Internet users tend to be younger than the overall population. Research from comScore Media Metrix shows that 60 percent of Hispanics online were 34 years old or younger, compared to 50 percent of the total Internet user population.

As Hispanics get greater Internet access, they are also starting to shop online more. According to Scarborough Research and Arbitron, 33 percent of online Hispanic adults made at least one purchase in 2002. Although that is significantly lower than the 56 percent of all Internet users who bought something online in 2002, as estimated by eMarketer, it is still increasing year-over-year. Still, according to Scarborough Research and Arbitron, only 13 percent of Hispanics purchased something online 10 or more times.

When U.S. Hispanic adults get involved in e-commerce it’s typically travel and banking, according to the AOL/Roper U.S. Hispanic Cyberstudy. Also, Hispanics tend to consume more types of entertainment, including purchasing tickets, than Internet users overall.

The study also found that Hispanics engage in online communications and other forms of communications at a high rate. A study by the UCLA Center for Communication Policy reports that substantially more Hispanic users than non-Hispanics consider the Internet an extremely important source of information – 44 percent versus 32 percent.

An Untapped Market

Considering the growing purchasing power of Hispanics, the higher-than-average amount of time they spend online and the categories that they spend in, there is a surprising lack of affiliate programs aimed at Hispanics.

Geoffrey Gonzalez, president of Ahorre Marketing, a Hispanic marketing services company, agrees. “I think it is a tremendous opportunity,” he says, but adds that the programs are “pretty much nonexistent.”

In September 2000, affiliate consultant Shawn Collins wrote about the potential of the affiliate marketing industry for Hispanics in Latin America in an article on ClickZ.com, “Brave New Affiliate World.”

Collins admits that the market has not taken off as he projected. “I thought it was about to explode five years ago, but it never happened,” Collins says. “The Hispanic market is a very under-served area for sure.”

Linda Woods, president and CEO of Partner Centric, agrees. “We have been waiting for this to happen; I think a lot of money is being left on the table,” she says.

There are many theories as to why the online marketing community has yet to seize this seemingly huge opportunity. Some believe the merchants need to lead the effort, while others claim it is the affiliate networks that need to act first to facilitate the opportunity. Still others say that the affiliates need to create demand in order for programs to take off.

Language Barrier

However, most agreed it is a language issue and that the expense and commitment associated with developing a Spanish language infrastructure is deterring the merchants and the networks from moving first.

Spanish language is very important to 67 percent of Hispanic Web users, according to the AOL/Roper U.S. Hispanic Cyberstudy, which reports that 40 percent of all Hispanics consider themselves bilingual, 40 percent consider themselves Spanish-dominant and 20 percent are English-dominant. For those who are bilingual, their preference for English or Spanish depends on if they are native- or foreign-born.

Some experts say there cannot be affiliate programs aimed at Hispanics until there are complete Spanish-language versions of major merchant websites. Many company websites, such as Target.com, offer a bit of Spanish, but pages of merchandise, site navigation and the shopping cart are in English.

“Some companies have a landing page in Spanish, and then the rest of the site is only in English,” Collins says. “What kind of ridiculous user experience is that?”

Most major e-commerce sites, such as Sears.com and Wal-Mart.com, do not even have Spanish landing pages. AOL offers channels such as news, entertainment and sports channels in Spanish, but their e-commerce channel, called Shopping, is in English only.

“A merchant company can create a great conversion engine, but when Hispanics get to the shopping cart, all of the instructions are in English and the customer support is in English,” says Matias Perel, CEO of Miami-based interactive agency Latin3. “If an affiliate brings the 20 percent [of the Spanish-dominant Hispanics] to the site, it’s going to be hard for the affiliate to see a positive return on investment.”

Brian Littleton, president of affiliate network ShareASale.com, agrees. “The merchants have to be the first people to step on board. If they determine that it is a market that is available and should be targeted, then that is the basic first step in selling. Obviously the network platform and the affiliates need to be there, but that is down the road. E-commerce came before affiliate marketing.”

Some industry watchers wonder if merchants are worried that focusing on one group will have other growing ethnic groups feeling left out. “Perhaps merchants think it is a slippery slope where if they create a site for Spanish-speaking Hispanics, they will need to create a site for many other ethnic groups and languages,” says Kathryn Finney of TheBudgetFashionista.com.

What About the Networks?

Another theory suggests it’s possible that merchants are waiting for demand from the affiliate networks and publishers before they go through the expense and commitment of building Spanish-language capabilities.

“It’s something of a chicken-and-egg thing,” Collins says. “Why go through the trouble and expense to convert everything if there is not a network to bring you down there? They need Commission Junction, LinkShare, etc., to invest there. Affiliates haven’t gone there because there are no programs to promote.”

In addition, the traditional networks, such as Commission Junction and LinkShare, are not set up to accommodate Spanish-dominant affiliates.

For example, at Commission Junction, when a publisher searches on “Hispanics” for programs to promote, the search yields several programs including Amigos.com, Date.com, FriendFinder.com, SpanishToys.com and Yahoo Personals. But like many of the shopping carts at big online retailers, the interface is in English only; Spanish-dominant affiliates cannot sign up if they can’t navigate the English-only site.

Many merchants describe their affiliate program, or “programa de afiliados,” in Spanish but switch to English once the user reaches the enrollment pages.

Ahorre.com’s Gonzalez points out, “You can’t walk a user through in Spanish until page 9 and then switch to English when it gets to page 10. It’s misleading. It’s very similar to mortgages. You can promote, market, talk, speak and write everything in Spanish for mortgages, but the bottom line is that the contract is in English, and that hasn’t been changed by our laws.”

For example, the bookseller Ofertón de Libros has two complete versions of its site and two complete descriptions of its affiliate program, as well as contracts for both. However, the affiliate contract on the Spanish site is non-binding, but links to the English contract, meaning that the user needs to sign the contract in English to join.

A Spanish-language interface at the networks’ sites would facilitate the enrollment of Spanish-speaking affiliates into Spanish-language affiliate programs. But if the affiliates can’t sign up, the networks can’t know that the demand is there.

“The affiliates who can’t speak English would not know how to join,” says Linda Buquet of 5 Star Affiliate Programs. “My guess is that the networks won’t do it until they know the affiliates are there.”

To date, none of the major affiliate networks (Commission Junction, LinkShare, Performics or ShareASale.com) offer outreach in Spanish. ShareASale’s Littleton says, “These things are definitely in the plans for companies like ourselves and, I am sure, other networks as well.”

Affiliate Demand

Each group seems to be looking at the other to get the ball rolling. From the networks’ view there is also concern about whether there will be demand from affiliates to make a program successful, according to Partner Centric’s Woods.

“I think a lot has to happen before affiliates get into it,” she says.

Littleton agrees. “It is hard to put a lot of resources and work behind a product when the majority of affiliates are not ready and the majority of merchants are not ready,” he says. “All of the pieces are needed for a successful push into any market, whether it is Hispanic or European or Asian.”

Latin3’s Perel says, “The last thing you want to do is build an affiliate program directed to Hispanics and then find that you fail on the transaction part.”

A Need for Content

An affiliate program cannot work if there is not enough relevant content. So, the key to a successful affiliate program is to recruit affiliates with contextually relevant sites that have a proven track record for driving traffic, according to Buquet.

“Until they know the relevant content is there, the networks won’t do it,” she says. Page views are up 30 percent in the U.S. Hispanic market, but they’re up only 6 percent in the U.S. general market, according to comScore Media Metrix. Some point to this as proof that Hispanics are spending more time on the same sites because there is a lack of good Spanish content on the Web.

According to the AOL/Roper study, more than half of all offline Hispanics (56 percent) cite lack of Spanish content as a reason for not going online at home. About half (49 percent) also say it is because there aren’t enough sites and activities online that would interest Hispanics.

It’s in the Works

Regardless of whom you speak to – merchant, network or affiliate – there is a sense that the development will happen with time. But there is trepidation expressed as well as optimism by all parties.

“Everyone knows that Hispanics are a vast audience, but I don’t think that anyone is doing it well yet,” says John Ardis, vice president of business strategy at ValueClick. “Everyone is still scratching their head. There is no shining example to point to. There is a paralysis about when to step forward. It is not just a translation job; whole concepts have to be translated to do it right. It can affect the offline merchandise – if we build it online, do we have to have duplicative merchandise in our offline world?”

Joseph Anthony of Vital Marketing says, “In time, with the proper commitment and appropriate research, these brands will find a lot for them to target. They just can’t sit back and keep doing what they are doing.”

Mark Lopez, publisher of AOL’s Latino, agrees. “As the market develops and companies see the potential of this market and see the Internet as a really mass medium to reach these audiences, I think there’s going to be more investment in the back end to make sure the whole interactive product is in the same language.”

Targeting Hispanics

The research and the online experts say the opportunity to reach the Hispanic market is huge and the development is in the works. Meanwhile, affiliates are scratching their heads about how to tap into this market.

Language is the first concern for any potential affiliate. Other advice from experts in the field includes translating concepts, not just words; being culturally sensitive to the target audience (realize that Mexicans are different than Cubans); targeting the appropriate products with appropriate price points; and testing and retesting the market.

Some experts claim that companies may be wrongly assuming that if customers have an Internet connection and a credit card, they can understand English well enough to make a transaction. A Feedback Research study found that 79 percent of Spanish-speaking Hispanics who have used the Internet for five years or less are already highly engaged in online activities.

There is evidence that it is important to reach out in Spanish even if the user is bilingual. comScore Media Metrix found that 49 percent of the 12.6 million U.S. Hispanic Internet users prefer sites that are either in Spanish or bilingual. “While English content can and does reach large numbers of Hispanics, marketers must also provide relevant Spanish-language content to fully reach U.S. online Hispanics,” the report stated.

There are programs that do target the 20 percent Spanish-dominant U.S. Hispanic market. For example, 21st Century Insurance supplies its affiliates with creative in Spanish for car insurance deals. Partner Centric’s Dan Fink, who manages 21st Century, says the “Spanish creatives represent about 15 percent of our creative content and do bring in a good amount of quotes as well.”

Pedro Sostre of Sostre & Associates is a design consultant and an affiliate who owns several sites that provide creatives to affiliates in Spanish. Sostre’s FreeBookClubs.com promotes two Spanish-language book clubs – Mosaico and Circulo.

“The Spanish-language clubs are on par with some of the other niche clubs,” says Sostre, who also notes that his book club targeted to the African-American market does extremely well, as does the Large Print book club (aimed at the older market).

In addition, Sostre helps run the affiliate program for ServerPronto.com, which also provides its creative in Spanish. Most of the affiliates that use those creatives are targeting a South American audience. Because the company serves clients internationally, ServerPronto’s Spanish-language website and marketing are not specifically geared for U.S. Hispanics.

Be Bilingual

While there are many sites, including Mexgrocer.com and Amigos.com, that also offer some Spanish-language pages, some claim the experience does not need to be entirely in Spanish – it is sufficient to reach out with a bilingual message that leads the user to a Spanish-language page at an English-language site.

Many companies are targeting Hispanics with bilingual messages. Ahorre.com advertises its Household MasterCard credit card in English and Spanish on the same page. Target.com has banners on its Spanish landing page that mixes languages to say “Nuestra Gente – Hispanic Heritage. Discover the Cultura and Tradicion.”

Reebok used this “Spanglish” this year in its much-hyped BarrioRBK campaign, which was produced specifically for the U.S. Hispanic youth market. The site is marked with Spanish and English tag lines as well as Spanglish tags directing visitors to “Volver a Home” or “Return to the Home Page.”

Latin3’s Perel, who designed the site, explains, “We created this website in Spanglish because we realized that young Latinos are bilingual or, because they came here very early, they are English dominant. Because we want to connect with them, we give it a Spanish flavor, so the key here was to have copy writers who have a clear understanding of when to use English and when to use Spanish.”

But there are other reasons not to reach out solely in Spanish. Research firm Cultural Access Group found that Hispanic youths prefer English-language television and radio programming over Spanish-language fare by a margin of nearly two to one, and overwhelmingly prefer English-language Internet sites.

“I think a lot of younger Hispanics are more comfortable in English,” says Sostre. “I am in my 20s, and if I see a site that is completely in Spanish, I think it is targeted at my mom or my grandmother.”

He warns that you might risk insulting a potential user if you communicate with them only in Spanish. “A lot of Hispanics find it offensive if you assume that they don’t speak English.”

A Question of Culture

Affiliates may find that language is less important than culture. Lopez, the AOL Latino publisher, says “the Hispanic audience definitely has cultural dimensions that are really different than the general market.”

For example, Reebok’s BarrioRBK site features a Reggaeton dance game, a music area that includes the top 10 Latino artists, and information about famed Mexican soccer team Chivas.

Because Hispanics online skew younger, Ahorre’s Gonzalez claims affiliates might also do well to target them with lower-priced items. “The growth in Hispanics online is in the youth market, and the youth market is into music – they are into iPods and they are into CDs. Try to sell reasonable price points; if you target up to $99 you should do well.”

Not everyone agrees that low-price items are the way to go. According to Lopez, Hispanic demographics tend to be younger than the general market, but he adds that their buying power is increasing year to year. “Hispanics are becoming more sophisticated just like the general market.”

Nacho Hernandez, president of iHispanic Marketing Group, says, “U.S. Hispanics spent $5.6 billion in 2003 purchasing on the Web.” In fact, Sharper Image, which is known for its high-end electronic goods, has a Spanish-language version of its website targeted at Hispanics in the U.S. and has a “programa de afiliado.”

But some argue that the current research and demographics don’t tell the whole story. Many claim the Hispanic market is not that distinct and will become less distinct over time – much like the offline world where Hispanics become acclimated to American lifestyles and habits.

“In recent years, there has been a shift in online advertising – less of a focus on demographics and more of a focus on psychographics or behavior,” wrote Barry Parr in his MediaSavvy blog. “Demographics are usually the wrong way to target online advertising. You may believe that the most likely user for your products is a woman between the ages of 25 to 44, but what you’re really looking for is anyone who might want to use your product. ” On the Web, you can target users by context and behavior. That’s a lot more powerful than demographics. “”

Vital Marketing’s Anthony concurs. “I think that marketers may be overanalyzing the Hispanic market in terms of feeling that Hispanics are only going to go to sites that are relevant to Hispanic cultural content or contain some type of concentrated cultural information,” he says.

The debate continues about how to target this growing Hispanic group, but for now many agree that for affiliates to succeed, they need to recognize that the Hispanic segment is one with unique requirements – including differences in language, culture and spending habits. Reaching out with cultural references that appeal to Hispanics, and experimenting with Spanish, bilingual and Spanglish messages, are some of the ways to get started. Programs will have better conversion rates if they can demonstrate that they have considered the wants and needs of Hispanic shoppers.

The best way for affiliates to determine the appropriate way to drive traffic is through experimentation. “Top affiliates must be committed and continually test, measure results, make adjustments and retest the market,” Hernandez says.

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 march FIRST (formerly USWeb/CKS).