What Clicks At Performics

To the surprise (and delight) of many, 2004 has put the spotlight back onto e-commerce for the first time since the dot-bomb exploded in the spring of 2000. Web stocks rose over the first three quarters, while mainstream stocks were weighed down by geopolitics.

Google went public with the kind of swagger that conjured up memories of the late ’90s. Online spending continued its rapid rise. And big advertising companies went shopping for smaller Web properties.

ValueClick bought Commission Junction. And Internet ad giant DoubleClick bought Performics.

Few have more insight into the recent past or the long-term future than Performics President and CEO Jamie Crouthamel, who shares his views in this one-on-one chat with Editor in Chief Tom Murphy.

TM: How and when did you get into the affiliate marketing business?

JC: I started Performics, which at the time was called Dynamic Trade, in 1998 and we started as an affiliate marketing service provider addressing the needs of the catalog industry, now really the multichannel marketing industry. The needs they had at the time were affiliate marketing and performance-based technology as well as services and execution help as they were executing these programs.

TM: Why and when did you change the name from Dynamic Trade to Performics? What was the strategy on that?

JC: Early on in affiliate marketing, the term performance marketing wasn’t really being used. As we grew the business and saw other performance marketing opportunities start to evolve out of affiliate marketing, Performics was a better descriptor of what we were trying to accomplish. Today, we view ourselves as a performance-based marketing services and technology company. The fact that we’re leaders both in affiliate marketing and search engine marketing points to our focus in those areas. The two needs that companies have to be able to execute on are technology to facilitate these programs and marketing expertise to execute on them as well.

TM: The acquisition by DoubleClick is complete, and now the real work begins. What changes do you foresee at Performics in the coming months?

JC: DoubleClick acquired Performics because we have a proven track record for success. So many things will remain the same. But we immediately began to work together to build DartSearch, which is a DoubleClick solution, powered by Performics’ technology. Performics also uses DartMail for merchant email campaigns and affiliate communication, and our clients think the product is terrific. Already, we see the benefit of being part of a larger company and ultimately clients and affiliates will enjoy that benefit too. We now have global reach with 19 offices around the world, so as our clients look to expand into new markets, we have the right resources in place. In addition, DoubleClick has great research and a lot of talent. Affiliate marketing is a very good fit within the DoubleClick suite of products. The biggest changes at Performics are always driven by growth. For example, we already have more than 130 employees and will add at least another 30 or more before the end of this year.

TM: The acquisition is another sign the interactive media business is converging. Is the day of the independent affiliate network coming to an end? Do you think a new network could start up independently at this point?

JC: The online marketing industry is consolidating, and affiliate marketing is part of that. Last year, there were four major networks, and now there are three, with two of us owned by larger online advertising companies. So clearly the industry has consolidated. A new network would have many barriers to entry, because established affiliate networks have already built successful companies and achieved some level of efficiency with their businesses. That still does not mean it would be impossible to launch a new network, but a new affiliate network alone wouldn’t be enough today. Marketers want access to multiple performance- based marketing channels, and they expect more from fewer vendors. They want to participate in several performance- based marketing opportunities. Affiliate networks that provide only affiliate marketing services while ignoring other performance-based marketing services lessen the value they can provide clients and hurt their own chances for success in today’s environment.

TM: Are there ways that you would say Performics is different from the other major affiliate networks?

JC: We’re very different in that we look at the performance-based marketing sector as a whole versus components of it being affiliate marketing or search marketing or other forms of it. We started out in affiliate marketing. If you look at affiliate marketing today, and back then, it really set the benchmark for performance- based marketing. Today, everything is really compared to it. It’s interesting to note that affiliate marketing, often the most cost-effective channel in an online marketing mix, provides a platform for pricing. And any media today is really based off of an effective affiliate marketing or rev-share measurement that people use. We started off with that and we started seeing other concentrations of performance-based marketing around affiliate marketing. The first one, which really is pretty obvious, is search marketing. So we broke that out as its own practice per se. We’re the only major affiliate marketing leader who is also a leader in search marketing. We looked at what our clients needed and branched out from there.

TM: A lot of affiliates do search engine marketing as well as affiliate marketing. How does your company avoid competing with your own affiliates on that level?

JC: One way is we know very much about every affiliate in our network. We take great pride in that. Every affiliate who enters our network is screened and it’s understood what their business model is, versus an open network where they come in unfiltered and just start performing their activities. Many clients prefer that Performics run their affiliate marketing program and their search marketing program in parallel because of the inter-workings of the two programs you just described. There are a lot of affiliate programs and a lot of affiliates within those programs who help to complement the marketer’s search program. There are many terms and many categories in which the affiliates are better off participating. That’s advantageous to the affiliate and to the merchant.

TM: There are other areas emerging in the performance marketing field that seem to be fairly lucrative. I wonder if Performics might start competing in such areas as search engine arbitrage or creating blogs to increase revenue flows.

JC: We keep looking at performance-based marketing opportunities as they would be beneficial to advertisers. We always represent the advertiser in ways that would be beneficial to them. We probably wouldn’t get into the blog creation market because that would basically be creating content, which we don’t necessarily do. We just help our advertisers take advantage of it. So as blog advertising may or may not unfold, we would participate in that. With search arbitrage, we tend not to work in that market. But we would convince our clients that it’s better for them to run their own programs so they can reap the benefits of those programs.

TM: You guys are well known for your proprietary tracking technology. How is that system run? Is that a cookie-based system?

JC: There are different elements to it, and there is also a cookie component as well. As with any tracking technology, if you’re trying to track some return-day or some come-back to the site, you have to use cookies. So every tracking technology uses cookies. But there are other elements to it as well.

TM: In our last issue, Steve Messer from LinkShare raised some eyebrows by suggesting cookie systems weren’t accurate enough for this business. Would you care to comment on that?

JC: Well, in our technology, one element of it is a cookie technology. And DoubleClick, which now owns us, also leverages cookie technology. And everybody in the industry uses cookie technology, including LinkShare because they track some type of return-day. So I would think that’s a standard.

TM: Is there something beyond that you use to back up the accuracy of the cookies?

JC: Yes, we have other means that are a little technical to describe in an interview that also do backups to it. But if you’re trying to track any sort of return to a site once you leave, cookies are about the most accurate way to do that. There’s no tracking that is 100 percent. For every pro, there’s a con to it as well.

TM: There’ve been some complaints on the forums that links from Performics don’t go live right away, and that of course makes it harder for affiliates to check their links as they upgrade their sites. Why does that happen and can it be changed?

JC: I don’t know the technical answer to that. But once our links are created, they’re basically live in the system within seconds of being created. So it might be getting approval of those links instead of technically being ready.

TM: Like some other networks, Performics is said to block its affiliates from speaking directly to merchants, which could prevent affiliates from seeking higher commissions.

JC: That’s not true. We encourage meetings between our merchants and our affiliate partners. There’s contact information where a merchant can contact an affiliate. In most cases, an affiliate can contact a merchant. In a lot of cases, a merchant prefers that Performics handle the potential thousands of conversations on their behalf. So it’s really an efficiency request by the merchant, but it’s not a restriction.

TM: People seem to be a lot more aware of predatory advertising now. Do you think that problem is lessening, growing or staying about the same?

JC: I think it has picked up over the last few years. I think it has leveled off. It has become more heightened in the marketplace, and I think that’s why people hear more about it now. At Performics, we’re strong opponents of it. We’ve taken steps with our code of conduct, with our partnering with Commission Junction on that. Again, we screen every affiliate in our network, so it’s difficult for the spyware or the wrong side of the equation, predatory advertising, to take advantage of our merchants.

TM: Blogging, of course, is exploding with affiliates right now because they’ve figured out they can get high search engine rankings. What do you think is going to happen with that trend?

JC: We’re watching blogging very carefully. I don’t have any predictions at the moment. It’s a very efficient form of moving creative content back and forth, but there’s still a kind of non-standards going on right now with blogs being created and with blog writers. So I think there are still a lot of things that will unfold in that area.

TM: As merchant revenue grows in the affiliate marketing arena, do you think some of the smaller affiliates will be forced out by bigger players in their field?

JC: No, I do not. I think the beauty of affiliate marketing is that it’s a way for small publishers or affiliates to participate in the marketing mix of a merchant. I think that’s the beauty of affiliate marketing, that publishers of all shapes or sizes can participate because of the leverage you can get out of an affiliate program.

TM: Do you think, as the industry grows, more merchants will bring their programs in house instead of going through a network?

JC: Again, from the past question, I’d say not, because affiliate marketing allows publishers of all shapes and sizes to participate efficiently in it. It allows for the next evolution. Affiliate marketing seems to create new performance-based marketing vehicles. That’s the catalyst of it. So participating in a network that gives you broader reach in new opportunities allows you to see those emerging trends.

TM: What do you see as the biggest challenges for affiliate marketing in the coming months? It’s an area that changes all the time. Is there anything on the horizon now that seems like a threat to affiliate marketing?

JC: I don’t think there’s a threat per se to it, but I think what you’ve seen over the years is a trend toward more tightly controlled networks. You’ve seen folks who’ve run massive affiliate programs with tens or hundreds of thousands of affiliates starting to scale those back in an effort to get better understanding and control of their affiliate marketing program, as merchants are performing their other performance marketing-based activities.

TM: You said you screen affiliates closely. Do you also remove unproductive affiliates from your ranks? Do you keep them active in hopes they’ll start producing?

JC: Performics reviews each affiliate applicant as a service to all clients. Many Performics clients provide criteria for their program, and the evaluation matches the affiliate against the provided criteria. If a new affiliate applies to our network, we don’t necessarily make a judgment upon application about how productive that applicant will be, but we do make sure they have an active Web site and check for any content or practices that violate Performics’ policies, including our Code of Conduct for Fair Practices. Performics may remove affiliates that do not generate transactions over a period of time, usually one year. Many clients ask that we clean up non-productive affiliates more regularly, but before we remove an affiliate, we attempt to contact them to inquire about the status of their account. We do our best to encourage productive referrals from and commissions for all affiliates.

TOM MURPHY is Editor in Chief of Revenue and the author of Web Rules.

Beyond Search Engines

Paid search may be driving the rebound in online advertisers, but it’s also driving away the promoters with shallow pockets.

Demand for paid spots on Yahoo, Google and their ilk is pushing prices sky high. Within the most popular categories, it’s hard to stand out from the crowd of merchants without spending a fortune. In fact, some aggressive marketers play “keyword smackdown,” launching high-stakes bidding wars in the hopes of bankrupting their competitors.

Email marketing isn’t cheap either, and consumers seem to be fed up even with opt-in mailings. Add in the restrictions of the CAN-SPAM Act and you’re not left with much room to maneuver in this overused form of marketing.

So how can an aspiring affiliate attract more customers without having to spend a fortune in advertising? Fortunately, some of the neatest promotional opportunities are still free – or cheap, anyway – especially if you’re willing to use a little elbow grease.

The Trade Groups

Seek out trade associations that might be interested in your products. “Not enough people are utilizing this promotional tactic,” said Barbara Spagnola, owner of Concept Marketing, a consultancy that sells subscriptions to an online directory that includes 35,000 professional groups. “A lot of companies don’t even know what their niche market is, whether it’s a geographic focus or otherwise. Everyone is looking for cheap advertising, and this is one of the best ways to keep your costs down and be blasted out to hundreds of thousands of companies that might be interested in your product.”

Spagnola advises her clients, which include affiliate businesses, to call or send direct mail to a trade group whose membership overlaps with an entrepreneur’s desired customer base. The first contact should be treated like a job application, she said, but should by no means be a one-time event. Do it on a monthly basis, whether your means of communication is a postcard, newsletter or, better yet, an actual conversation.

The Holy Grail, of course, is to work your social charms upon the leadership of the group to convince them to sell you a copy of the membership list. Spagnola estimates that about 40 percent of associations are game, and it’s usually the medium to large ones who sell, depending on how badly they want to raise money. Some are very selective about giving out data, and ask for the right to preapprove anything you might send out to the members.

To make an easier job of convincing management that you have the association’s interests at heart, volunteer for the group – especially if you can score a speaking engagement at one of their meetings – and get to know the decision makers. Another way to sweeten the deal for the list gatekeepers is to offer special discounts for the membership on relevant products.

“Make it so the association sees a reason to get involved with your deal,” said Spagnola. “Associations are always looking for perks for their members, and if you can show them the value, a lot of the time that’s free advertising for you.”

But what if you can’t find a trade association that reflects your specific affiliate marketing niche? Spagnola said there are another 150,000 groups out there that are subchapters or committees of the groups on her list, and they can be found through the broader umbrella groups in her directory. There’s also a national Association of Associations, but Spagnola warns that it’s completely pointless to approach them for a referral if you don’t have a specific market in mind and a good argument for why the uber-umbrella group should refer you to an association.

But what if your product is so novel that it doesn’t seem to fit into any of the existing trade associations? Consider that a green light to start your own nonprofit that hopefully would rally interest in your product. In that case, the first thing you might want to do is consult with an accountant, or at the very least call the IRS, and ask for their official publications on how to start a nonprofit group.

Find A Good Cause

Speaking of nonprofit groups, getting involved with charitable causes is another great way to raise one’s profile without descending into debt. The trick here is finding something you truly care about and offering them help that gives you a chance to tastefully tout your business. If your choice of charities is arbitrary or your mercenary motives are too obvious, your promotional attempts could backfire.

One affiliate manager who has very successfully incorporated altruism into his product line is Greg Kerber, CEO and chairman of Wurld Media. His company started peddling a payment technology platform to merchants, and then extended the software to do fundraising for nonprofits. But his charitable intentions run deep: Kerber’s 12-year-old daughter Alexis Nicole has Down Syndrome, so he set his sights on the Down Syndrome Resource Center and the Special Olympics as the first beneficiaries of the fundraising applications of his payments platform.

“Truthfully speaking, I have never done this as a cheap promotion. I am a parent who has special needs and there’s a special place in my heart for this kind of work,” Kerber said. “I have a profitable business and I can help out nonprofits with a segment of my business.”

Kerber’s latest project addresses the homeless, via a partnership with the charity Help USA. The venture adds the charity to Wurld’s existing platform and enables shoppers to donate a portion of their e-commerce dollars when patronizing any of the 400 merchants who use BuyersPort Networks, Wurld’s platform for credit card payments, loyalty programs and charity.

“I hear from nonprofits all the time about how corporations have really changed. They’ll offer to donate money, but insist that there has to be a marketing component to it. And that’s really sad to me,” said Kerber. “There’s a fine line between political correctness and politically incorrect. But we’ve taken care of a lot of people in our world, and we do it because it’s the right thing, not because it’s marketing dollars. And there’s a greater benefit to doing it this way.”

Regardless of whether there’s a charitable angle to your market, you can always make a name for yourself by appearing at as many conferences as possible. Better yet, help out with the planning or even better, volunteer to speak at a show and things start to snowball. That’s how affiliate consultant Shawn Collins created a public image for his company.

He started out by joining the conference-producing team at Refer-It Affiliate Solutions in 1999, and offering to speak at the numerous events they planned. He also helped plan the AffiliateForce shows and became one of their speakers as well.

“I try to speak at as many shows as possible. Even though I get nervous about doing it, I still make myself get up there,” he said. “Lots of these shows are looking for affiliates to speak and no one stands up. So I volunteered and submitted proposals, and the more I did it the more I got invited to other shows. And if you can’t find a show to speak at, start your own.”

Even though he was already speaking at shows, Collins decided to start his own. He felt that the existing affiliate marketing shows were more focused on socializing – playing golf – than on business, and wanted to create a more business-oriented event, where productivity is just as important as networking.

The resulting AffiliateForce event is precisely that, in addition to being a way for him to tout his consulting company and scout for new business opportunities. “The first show I organized was in a small conference room in New York. Now I’m organizing a conference that will take place on the Carnival Victory cruise ship with several thousand people on it,” he boasted.

Among other items on the agenda is what Collins calls “speed networking,” a business version of speed dating. Here participants pair off in three-minute intervals to exchange cards and pleasantries, so that everyone ends up meeting 20 people over the course of one hour. These contacts are a mix of affiliate managers, publishers and vendors.

Collins’ next show will include a speed networking session, as well as a new variation on this theme that Collins calls roundtable rotation. Instead of a pre-planned lineup of speakers, all of the participants have a shot at impromptu speaking for 15 minutes, with question-and-answer sessions interspersed. The idea here is to “give the smaller guys a chance to meet people and speak about subjects of interest to them,” he explained.

Talking Radio

Once you get the hang of public speaking, you may want to look into other opportunities to talk about your business. A largely untapped resource is Web radio, which reaches a national audience without requiring a national-sized budget.

“Why not have a radio station promoting your product 24/7?” asked Dennis Humphrey, owner of Internet Marketing Radio, which currently earns its keep as an affiliate of programs touting online marketing and broadcasting software. Humphrey is launching a radio consulting service aimed at Internet marketers, and has approximately a half dozen prospective clients who would give Humphrey a cut of their revenues in exchange for his helping them put together an online radio show.

“This is ultimately going to be like a QVC radio. You’ll be able to call in and buy during the live program, or simply call in and ask a question,” he said. “We want to get people to put our audio on their Web sites. I will want other entrepreneurs to pick this up and syndicate it. There’s all kinds of products we can sell online, not just marketing and mp3 applications,” like he does now, said Humphrey. “It’s easy to create audio for your Web site. Then there’s audio postcards, online infomercials and even e-books” to promote your business.

So far Humphrey is only doing his own radio show, which he uses to tout all of the products he sells as well as his consulting service. He runs his shows on multiple webcast services, preferring to cast his online net as wide as possible. These include ShoutCast, Abacast and Pirate Radio, each of which asks broadcasters to purchase proprietary software to create the audio files that are distributed online.

Many of the Web radio stations that are open to new shows are ones with fewer listeners. To reach millions of ears, you need to consider the advertising route – having professional deejays read your announcements for a fraction of the cost of conventional radio. “A mid-sized company can spend $2,000 for a national campaign that would have cost $20,000 or more on conventional radio,” said Rick A. Pace, managing partner at MakRadio.com, which boasts 5.3 million listeners worldwide.

A much cheaper option is to hop on the blog bandwagon – and go right ahead and post your blog on as many of the blog sites as possible, to leverage the traffic already held by the blogs, and have one of the blogs post onto your own Web site. The trick here is to update the Web log as regularly as possible, and show off your expertise in your pet subjects.

“When you have a good blog being updated regularly, you know what you’re talking about and have a strong opinion; then other bloggers start linking to you,” said Mihail S. Lari, CEO of BlogIt, which recently changed its name from BloggingNetwork.com. “There are a number of blog directories that have just started, so it also helps to get yourself listed up there, too.”

JACKIE COHEN has been covering affiliate marketing since 1998. She previously edited the Net Returns section at The Industry Standard.

The Write Stuff

Imagine you’re in a store. You’re browsing and minding your own business. Then, all of a sudden, a pushy salesperson ruins your shopping trip. What could be worse? On the other hand, a helpful, honest, knowledgeable clerk can turn an otherwise annoying shopping errand into a pleasure.

The same applies online. Blaring banners are like obnoxious sales clerks; shoppers want to avoid them. If you want visitors to value your site, you need to offer more than banners and obvious links to products. You need to give ’em a reason to come back. Enter content – the stories, letters, news, photos, drawings and other types of information that add value to your site.

“The key is attracting people to your site by offering information that is free and useful,” said Elizabeth Karolczak, president of OSKAR.com, the parent company of ContentFinder.com, a site that lets people find sources of syndicated content. “It shouldn’t be just sell, sell, sell.”

Yes, the name of your game may be selling, and not all sites need this type of content. Many successful affiliates operate online stores that contain very little content and win their customers over with a no-frills approach to shopping. Shoppers come to those sites simply to buy something quickly at a good price with no hassle. The drawback to that approach is that the customers leave as quickly as they arrive, limiting the time they spend in the store and how much they buy.

Giving people a reason to read and linger increases the likelihood of them seeing more of your site and more of your offers. The more frequently that information changes, the more incentive your visitors have to return to your site.

“If you update with relevant information, you increase the value of your site,” said Jim Pitkow, CEO of Moreover.com, which aggregates content from various publishers. “Content enriches the user experience and drives loyalty.”

User loyalty is exactly what some affiliates are after as they create content, get their visitors to do it or get merchants to provide it. And they find that attracting loyal users boosts traffic and revenue.

“The result of providing high quality editorial is that we are literally the No. 1 ‘senior magazine’ on the Internet according to search engines such as Google, Yahoo and Ask Jeeves,” said Reece Halpern, publisher of GrandTimes.com, an affiliate site that serves seniors.

GrandTimes.com takes a three-fold approach to content. It has a newsfeed from InterestAlert.com, an affiliate news site that provides free stories. It also posts outside content, articles from book publishers and other sources with whom they’ve established relationships over the past decade. Plus, one in-house magazine-quality article appears per week. This is all done with just two people: Reece and his wife. It doesn’t take a team of Pulitzer winners to make great content. But it does take dedication and persistence.

Create It Yourself

“I believe the key to our success is that we provide high quality content on a weekly basis,” said Halpern, who updates content from his home on Sunday nights. “Competitors who provided [public relations] material disguised to look like editorial are no longer around.”

Other affiliate sites agree that quality is important. “Most sites post only fluff,” said Bob Narindra, VP of LovingYou.com, a relationship site that has a staff of only three. “You want content that isn’t available everywhere else.”

Original content takes basic writing skills. If you are up for it, this can be the perfect creative outlet. It’s a good idea to brush up on your writing skills or ask someone you know who has a knack for turning a phrase. And you don’t want to turn off your audience by, for example, raving about every product you review (and sell). You’ll lose credibility very quickly and visitors will skip over your site as untrustworthy.

If you want to spice up your site, don’t use too much sugar. Whether you’re reviewing books, selling CDs, or critiquing clothes, let your words be immaculate. You want readers to respect you. That means telling the brutal truth. If everything you say is positive, then readers won’t buy what you’re selling and your site will suffer as a result. So give them quality content and everyone will be contented.

This means you can’t insult your readership with egregious errors. While it might sound like an obvious no-brainer, run a spell check and grammar check, even if you think you’re Mensa material. After all, mistakes happen.

And try to update it regularly. “When we went on vacation, our traffic would drop by 20 percent,” said Narindra. “So now if we have to leave town, we write content in advance.” The three partners manage to make the site look like it offers a lot by switching the order of the featured stories.

Get a Little Help

Most affiliates are on a tight budget, so they do it all themselves or consider farming out some writing. But if you are going to count on someone else to help you create content, make sure they really care about the topic they are writing about. The more passionate they are, the more likely they are to work for bargain rates or for free.

Many affiliates look to their own audience to find contributors passionate about the topic. Some invite visitors to express themselves. Amazon.com publishes book descriptions sent by publishers, but reader reviews are what guide many visitors’ purchasing decisions.

Jonni McCoy runs an affiliate site called MiserlyMoms.com and her site’s main objective is to sell copies of her own books. But she has cleverly enticed readers to submit articles to fill out her site’s offerings. There are “working from home” stories from readers, “miserly tips” from readers and even recipes from readers.

“The articles, tips, recipes and stories draw people in to read,” said McCoy, who even posts guidelines for people who want to contribute. “I get about 2,000 hits per week.”

If you have, say, a car site, get users to submit advice, set up polls and then post the results. People love seeing how others respond. A message board is another great tool. You can get the software free or cheaply by Googling such terms as “free message board software.” Look at what your visitors talk about to find out what topics are of interest to your readers. It’ll give you great ideas on what articles will grab readers.

Rely on Pros

A syndicator or content licenser can also help you figure out what your needs are and how to best serve your viewers.

“We’ve been doing this for seven years,” said Jeffrey Massa, president and CEO of YellowBrix, a content syndicator. “We are happy to share our experience with clients. Identifying the type of content that would be beneficial to your users is simple.”

But getting their expertise and advice can be costly. The last option is to license content from a content provider. The upside is that it lends your site legitimacy. Visitors know that you can be trusted, that you offer something valuable.

And syndicated content is not just for those with deep pockets. Halpern uses InterestAlert.com, which provides free news. But syndicators who charge may be worth the expense. Most syndicators get the rights to publishers’ content free of charge or on the cheap, because publishers like the traffic generated by licensing out their content. Moreover.com delivers 3 billion to 5 billion links per month. But the big content guns charge you because they invest in systems that make it easier for you to get what you want. That’s their service.

To compare a couple: YellowBrix has 3,700 sources and technology that categorizes and summarizes the content according to your needs. One client pays just over $1,000 a month while other clients pay more than $20,000 a month. Moreover’s feeds start in the thousands of dollars per year; clients range from Economist.com to a Wisconsin agricultural site. Publishers range from WSJ.com, the BBC and WashingtonPost.com.

“It’s very affordable, accessible, viable and compelling,” said Moreover’s Pitkow. “If you had to pay each of these publishers individually, you’d pay a lot more.”

Shop Smart

If you are considering licensing content, there are a number of things to keep in mind.

Understand what you are trying to accomplish. Then prepare a budget.

The cost of content varies, and you can pay monthly or annual fees. If you’re getting a newsfeed, you’ll probably get charged by the month; if you’re paying for access to a database, you’ll likely pay an annual fee up front.

When you approach a publisher or syndication source, make sure you’ve done your homework and you know how many site visitors you’ll deliver. Prices can vary depending on the content provider and how many eyeballs gain access. Publishers may want to know how you are going to use their content and how many people will see it. You can pay anywhere from nothing – what Halpern pays for an InterestAlert.com feed – to tens of thousands per month. Other providers charge by the categories and breadth of your needs, not by the number of viewers or page impressions.

Tech Issues

Be aware of what you are getting. Small affiliates usually have little technical expertise, so they need to be particularly clear about how they would like to receive content.

“Format problems can cause a lot of headaches,” warned ContentFinder’s Karolczak. Before you sign a license, have the contract spell out the exact number of articles (or cartoons or graphics, or whatever) you’ll get, how often, in what format (HTML or XML, for example) and how they’ll be delivered (via FTP or PDF, etc.). Otherwise, you’ll be doing a lot of technical work converting the content. Then, by the time you get it up, it’ll be out of date. You don’t want to drain your resources, so just be sure to state exactly what you want to receive.

Crediting the original publisher is another thing to consider. Accreditation can lend your site legitimacy. Readers will respect your content if they know it’s coming from a reputable source. On the other hand, some syndicators offer you a private label option – that is, you don’t have to say where you got it – but that’ll cost you more.

Flaunt It

After you’ve given your site a facelift with fabulous content, you should strategize on how to promote it: You want your audience to see your stuff.

“The No. 1 way to get people to come to your site is through an email with a hypertext headline,” said YellowBrix CEO Massa. “Everyone reads email. Give ’em a headline.”

GrandTimes.com encourages visitors to sign up for a weekly email that previews its latest articles. People will click on a link if they see something that interests them. LovingYou.com’s Narindra agrees that email is the best way to market your content. But be sure that you only send it to people who opt in and always give them the option to unsubscribe.

Perhaps the best reason to create compelling content is that it just may open up other revenue streams and help with your branding.

LovingYou.com has sold its content to Excite, IWon.com, AOL Time Warner properties and other online entities. And the sites credit LovingYou.com as the source with a link, which means more people linking, higher search engine results, more page views and more spidering. Narindra is excited about this because it means more in the coffers as well as more visibility for the brand. And the interest isn’t limited to the online world.

“Once a producer at Inside Edition [a TV program] came across our site, loved it and contacted us for help with a Valentine’s show,” said Narindra. The licensing of content is a nice byproduct that’s surprised the team. And now Inside Edition has approached them for help with another segment they are doing on couples getting married. Narindra said, “It’s a great relationship because once you help them once or twice, then they think of you first.”

DIANE ANDERSON has more than a decade of experience writing about the Internet and technology for The Industry Standard, Wired Digital, The Net and other publications.

The Best Paid Places

If you currently have a Web site, then I’m sure you are inundated with spam offering “guaranteed placement on more than 5,000 search engines.”

Before we go any further, let me just make something very clear. Yes, there may be 5,000 search engines out there – heck, at this point there may be as many as 50,000 – but there are only four that really matter. If you have your Web site listed highly on Google, Yahoo, MSN and AOL, then you have pretty much covered most of the search engine marketing you will ever need, because those four engines account for 90 percent of all daily searches.

Your first job as a Web site marketer is to get the best placement you can on the Big Four, and the only way to benefit from these listings is to rank highly. If you are listed in the top three pages on these search engines you will definitely get a lot of traffic. Recent studies have shown that 80 percent of Web users don’t search beyond the first three pages on most engines.

But what if you can’t optimize your site well enough to rank highly? Maybe you don’t have the time or don’t know how to create pages that are attractive to search engine spiders. Or maybe your industry is just too competitive. Don’t worry. You can still grab your share of search engine traffic by paying for placement.

Paid placement is generally divided into fixed placement and pay-for-placement (P4P), which sound alike but are actually a bit different from one another. With both of these methods you choose keywords you wish to target and the maximum price you are willing to pay, and then you submit your listings and wait for them to go live. The biggest difference between the two products is the length of placement and ranking control. With fixed placement, your listing will stay in the position for the price per keyword you choose, but with P4P you are part of a dynamic auction bidding system that will only guarantee your placement until someone outbids you. Fixed placement is currently available on only a few engines. However, pay-for-placement listings are available on all of the major engines listed above. So, depending on your budget, you too can buy your way to the top of these search engines.

In fixed placement, the price may be set on a cost-per-click (CPC), cost-per-impression (CPM) or cost-per-action (CPA) basis depending on the deal you are able to strike with the search engine. These listings generally guarantee you a ranking at the top of the search results page either as a “featured site” (on MSN) or a “recommended site” (on AOL). This is very attractive to larger advertisers as the campaign is fairly easy to manage, but requires a large budget commitment up front before you can even tell what your results might be from that particular engine.

Test the Waters

An easier way to test the waters before committing to a large fixed placement campaign is to pay for placement using one of the many CPC opportunities currently available. By listing your site on Google’s Adwords program, or Overture through Precision Match, you will gain top placement on Google and AOL (through Adwords) and MSN and Yahoo (through Precision Match).

With these programs, you choose the keywords you want to submit, write your ad copy (title and description) and submit it to the search engines using their submission forms. If you are struggling to write the copy, you can use Overture’s Fast Track program, where for $199 a member of the Overture team will select keywords and write the listings for you. Your placement on Google is determined by a combination of the amount you are willing to pay-per-keyword (maximum bid) and your ad’s clickthrough rate. With Overture your placement is determined by your maximum bid. Both of these campaigns will place you within the “Sponsored Listings” section of results on the larger search engines, and both require your listing to comply with their editorial guidelines.

There’s a few more things you need to know about buying listings. Before determining how much you can pay per click you need to figure out your marketing plan. Set your maximum bids based on your profit margin, the return on investment you seek, and the maximum CPA you can afford. An easy way to kill your business is to assume that because your competitor can afford a certain maximum bid you can too. The leaders in paid placement marketing set their bids based on their own metrics, not their competitors’.

Tracking your results helps you determine where the qualified buyers are coming from. At the very least, use the free tools offered by Overture and Google when setting up P4P campaigns to track conversions from these engines. And if you plan to make paid placement a long-term part of your marketing strategy, buy a good tracking solution. Add tracking URLs to every paid search campaign you run, and religiously review the reports generated by the tracking software, adjusting your bids based on your results (for a quick tutorial on tracking URLs, check out the Overture advertiser center).

The way you write your copy for your paid search listings can have a huge impact on the success of your campaign. The most effective way to write your listings is to keep in mind the following:

  • 1. Appeal to your customers;
  • 2. State your value proposition;
  • 3. Use a “call to action”; and
  • 4. Include your keywords.
  • If you keep these basic rules in mind, you too can get your business top ranking on the engines without all the time-consuming tactics that search engine optimization requires. There are other ways in which you can buy placement that we will cover in future columns, and we’ll also dive into the tactics that can give you a competitive edge in search engine marketing. See you at the top!

    MARY O’BRIEN is a partner at Traffic Mentor.net. She has worked in Internet marketing for the past five years and was formerly senior director of sales at Overture.com.

    Searching for Your Site

    Unfortunately, many folks create a Web site and then sit back and wait for the orders to start pouring in. That strategy doesn’t work in the field of Internet marketing any more than it does in the offline world. With millions of new Web sites being added to the Internet every month, the old days of hanging out your shingle and waiting for customers to beat a path to your door are long gone.

    Effective search engine marketing (SEM) is what separates winners from losers in the world of Internet marketing. And when it comes to SEM you have two choices. The first option is to optimize your site so that search engines find you easily and give you good ranking in their index. The second choice is to buy higher placement on search engines using paid inclusion or pay-per-click (PPC). In other words, you can pray for clicks or pay for clicks, the choice is yours.

    Praying for clicks is better known as Web site optimization. When taking this approach, it helps if you offer the search engine gods a peace offering by making it easy for their spiders to find and index you. (Spiders are programs that crawl all over the Web searching for pages.) Whether you choose to optimize your site yourself or pay a search engine marketing firm to do it for you the same strategy will apply, and you should be involved in every step of the process.

    Keyword Selection

    Choosing the right keywords and phrases for optimization is crucial. If you choose keywords that few people search for, then you can achieve a lot of top search engine rankings, but won’t get any customers. If you choose keywords that are too competitive you’ll find the competition won’t allow you to achieve any decent rank. You should also choose keywords that are attractive to your customer demographic; otherwise visitors will arrive at your site but never make a purchase. Simply make a list of relevant keywords that balance both popularity and competition. Use a keyword research tool like Word Tracker or Overture’s Search Term Suggestion feature to do this quickly and easily.

    Measure Your Rankings

    Before you can improve your position, you must know where you rank for the keywords and phrases that relate to your business’s products and services. If you did a good job in picking keywords, you should now have a list of highly relevant words and phrases that your customers are using. Use a tool like Web Position Gold, or my company’s free tools at TrafficMentorSEO.com/tools .html to determine where you rank for your targeted keywords on the major search engines.

    Page Content

    One of the easiest ways to attract both search engine spiders and qualified traffic to your Web site is to create Web pages that are appealing both to the user and to the spider. Spiders like to see short pages with lots of text and few graphics. People probably like to see more pictures. After all, any picture is worth a thousand words, just not to spiders. Balance is what counts. Creating pages that are attractive to users and spiders and free of annoying distractions like flash and frames is the name of the game. Try to create one page for each keyword or phrase you are targeting, and develop quality content that will bring users back to your site again and again.

    Optimization

    This is the main focus of search engine marketing and the piece that makes all the difference in your Web site’s ability to compete effectively. Simply stated, your goal is to give the search engine spider fodder. The easiest way to determine what it wants is to study pages already ranking in the top 10 and to emulate key aspects of those pages on your own site. Don’t copy your competitors’ source code and content line for line, just learn from their example. Study the basic statistical elements of the page such as meta tags, keyword counts, link popularity, word counts, etc. A good free tool to keep you on track and ensure that your page is spider-worthy can be found at InstantPosition.com.

    Submitting

    Don’t try to use a submission service to submit your pages to thousands of search engines and directories. These services are a complete ripoff. There are only a few search engines that count in terms of traffic, and you are better off submitting to them manually or using a tool like Web Position. Once you develop some third-party links to your Web site, most engines like Google will re-spider your pages regularly without the need to re-submit.

    Traffic and Revenue Tracking

    Ultimately, it isn’t just top rankings you want, but more targeted traffic and sales. This is where your investment in search engine optimization really pays off. Once you get your traffic-building pages set up, the pay-off comes in consistently. Utilize one of the many good tools out there for tracking visitors and revenues. You can use these solutions to track both PPC campaigns and organic visitors and you will learn a lot in the process about your site’s usability and its ability to convert visitors into customers.

    Follow Up

    While some pages may rank well for a long time without changes, most pages will require fine-tuning as the search engines change their ranking algorithms, and index new pages. It’s important to measure your rankings at least monthly. Re-optimize any pages that drop in rank and then resubmit or wait for the engine to revisit the page.

    The search engine marketplace can be daunting as things are constantly changing. In order to keep up your top rankings you need to stay informed. Read as much as you can. Sign up for the many search engine newsletters and forums and apply the tips in them religiously.

    After that, just sit back and smile as you watch all the visitors coming to your Web site. The best part is that all that traffic is free, and highly targeted. Yes, sometimes even the gods can be friendly.

    MARY O’BRIEN is a partner at Traffic- Mentor.net. She has worked in Internet marketing for the past five years and was formerly senior director of sales at Overture.com.

    The Pay Per Click Dance

    A few years ago, if your site wasn’t listed in Yahoo you might as well have given up. Yahoo was practically the only game in town, being the search engine of choice 75 percent of the time. There were all sorts of secret ways to get a better listing, and you had to know these and implement them or your site was invisible. Then, along came a little company called GoTo.com with its cheeky idea to let sites bid on better positioning in search results. A revolution was started.

    GoTo.com morphed into the king of pay-per-click search engine marketing, Overture.com., which was just purchased by Yahoo. When you couple that with the near-psychic accuracy of search results returned by Google through its Google Ad Words, you had better know how to tame these behemoths or once again you’ll be invisible. Once you have mastered the strategies, your top-placed search results will send anxious buyers streaming to your site. Within 48 hours, your return on investment on specific keywords can be analyzed, judged and tweaked to improve your bottom line.

    This is where affiliate marketing gets interesting. For as long as people have been commissioned to sell other people’s products, cleverness and innovation have produced the top sellers. I remember years ago a charismatic salesman came to my family’s house with an array of shiny new pots and pans. He proceeded to make a delicious meal, accompanied by never-ending sales patter. Before he left that night my dad had parted with a significant portion of his hard-earned cash for these magical pots. A very clever marketing tactic indeed.

    Affiliates have grasped this concept from the get-go. These days, good money can be made by going beyond banners and cleverly investing in and managing a pay-per-click search strategy. But what if both the merchant and the affiliates are both doing PPC marketing? That’s the big question every company that operates an affiliate program ought to be asking itself these days. In fact, good affiliates do use PPC and in many cases they’re doing it better than the merchants.

    So, how does that affect your business model and what kinds of policies should you establish around this issue? Well, it depends on what your marketing strengths and weaknesses are and it depends on how well you have analyzed your own marketing dollars’ ROI. To simplify it, there are basically three different ways to approach this issue: 1) Let your affiliates do anything they want with PPC search engines, 2) Prohibit affiliates from doing any PPC marketing, or 3) Compromise, and develop a strategy that allows you and your affiliates to divvy up the PPC traffic.

    Let’s look at the pros and cons of each of these models.

    1. Anything Goes

    If you let your affiliates do anything they want, you’ll get the same results as if you have NO policy. Good affiliates will research low-cost, high-traffic keywords relating to your site and products and will actively manage these bids to leverage what they pay for the words against what you pay them for the sale or lead. The “pro” is that the affiliates are bearing the cost of this marketing strategy. The “con” is that you are possibly paying more for that sale than you have to.

    2. Nothing Goes

    The second option is to prohibit affiliates from doing PPC marketing. Why? Because the knee-jerk reaction to No. 1 is, “Well now, wait a second, I could be getting all that traffic instead of them and paying less for it.” So you decide to pour your marketing dollars into PPC traffic on not only your brand name but on all your products and every keyword imaginable to “corner the market.”

    But the “con” of this approach is that your spending will go up dramatically, your management resources will go up dramatically to stay on top of thousands of words daily (sometimes hourly) and, worst of all, good affiliates who are good at this kind of marketing will drop out of your program.

    3. Compromise

    Finally, there’s the idea of compromising on a strategy that allows both sides to engage in PPC marketing. Helping affiliates make money will help you make money in the long run. How do you develop a good plan? You simply have to evaluate what you can manage and pay for effectively and what affiliates could do better and more profitably.

    For example, let’s say you have tested and done well in Overture with 300 top keywords and trademark names relating to your business. You’ve analyzed the stats and you’ve proved that staying in the top position for most of those returns a healthy margin between bid price and sales/lead volume. But you’re maxed out in terms of marketing budget or marketing staff to double or triple your buys.

    This is where your affiliates come in handy. Provide them with proven keywords and let them “have at it” on Google Adwords or any of the other PPC engines, like Findwhat or Kanoodle. Also, in order to keep competition between you and your affiliates to a minimum, ask that they not outbid you on Overture and police this aggressively. Take space No. 1 and No. 2 and let your affiliates take bids that place them at Nos. 3, 4, 5 and so on, and you have effectively shut out your competition on valued keywords and phrases.

    The main thing is to evaluate and then articulate a well-thought-out policy for you and your affiliates. Decide on the best use of your resources and budget, and then help your affiliates use this powerful sales channel to their best advantage. It will benefit you both.

    LINDA WOODS helps companies start and manage affiliate programs. Long known as the Affiliate Goddess, her new company, PartnerCentric.com, offers strategy consulting, training and outsourced program management services.

    No Free Lunch For Merchants

    It sounds like a no-brainer: Tap into a sales force of self-employed affiliates who’ll handle everything from producing product information to Web design to advertising. Let them do all the work, and pay them anywhere from a few pennies to a few dollars – but only if they produce to your exact requirements. What’s not to like?

    It’s a strategy that works for Bluefly, the online retailer of discounted designer clothing. In 2003, sales from its affiliate program ranged from 11.5 to 16 percent of the total each month. “We’re really excited with the progress we’ve made. We’re still early on in the process of refining our affiliate program, but I don’t see any reason why affiliates couldn’t contribute more than 20 percent of our sales,” said Bluefly executive vice president Jonathan Morris.

    While Bluefly’s total expenses were up, its marketing expenses actually decreased 17.4 percent. The company chalked that savings up to a switch from advertising to email and pay-for-performance marketing, including affiliate sales. As a result of this change in focus, Bluefly’s cost to acquire a customer dropped nearly 38 percent, down from $16.20 to $10.05 per customer.

    “The beauty of affiliate programs is that they’re performance based. The amount of commission you pay is dependent on the amount of sales you drive – not always the case in advertising,” Morris said.

    But it’s something of a misnomer to describe affiliate marketing as pure pay-for-performance. It’s not exactly a free lunch. In fact, overhead costs can eat into profits, while there’s a danger that inept or unethical affiliates can hurt the brand and actually drive customers away. To really get a handle on the upside to an affiliate program, a merchant must uncover the hidden costs – and risks.

    Micro Management

    Few affiliate programs are truly self-serve. Amazon.com’s is a good example of one company with proprietary technology that lets affiliates sign themselves up, quickly and easily. Yet, even with the hundreds of thousands of pay-for-performance marketers hyping everything on the site from books and DVDs to toaster ovens, every affiliate must be individually approved before starting, a process that typically takes less than 24 hours.

    Merchants can outsource most of the affiliate management to network services such as BeFree, LinkShare and Performics. Networks provide the software infrastructure and varying degrees of human oversight to handle automated sign-ups, link generation and the pushing of special promotions and information. Their staff will sometimes untangle snafus and soothe irate affiliates.

    But none of the companies contacted by Revenue put their affiliate programs on automatic. Instead, they devoted anything from a couple of staffers to a full-blown department to managing the program. “For probably the first two years after we started our affiliate marketing program in 1998, we didn’t do a whole lot with it, didn’t dedicate internal resources toward it. We just expected it to run on auto-pilot,” said Bruce Matthews, vice president of business development for electronics retailer Tiger Direct. As a result, affiliates brought in a few sales but the revenue they generated wasn’t exactly eye-popping. The program was floundering.

    Then, Tiger Direct decided to commit. “We dedicated more resources, and started to pay attention and make it work,” Matthews said. In 2001, the company added a staff position devoted to affiliate relations, began fixing problems in the program and added tools for the affiliates. The result: Tiger Direct affiliates now boost the bottom line by over $1 million a month in sales. Matthews said it took a year of solid work to bring Tiger Direct’s affiliate sales from under $100,000 to that million-dollar mark.

    Online department store outlet Overstock.com saw a similar boost when it got serious about affiliate marketing. After it revamped its program and made it a strategic initiative, the company saw its top-line revenue generation from affiliates grow eightfold in 17 months. But the program needs a lot of attention, said Shawn Schwegman, CTO and vice president of sales and marketing. “You’re developing relationships, and that takes relationship management.” Overstock.com has a five-person team responsible for 30,000 affiliates, headed by the company’s director of marketing.

    Hidden Costs

    Whether or not the retailer has staff whose sole job description is affiliate relations, overhead for the program is spread throughout the entire company, from the accounting department that cuts the checks to the janitorial service that hauls off the coffee containers emptied by night owl employees.

    The true cost of an affiliate program, said Prakash Bharwani, senior manger in interactive marketing for 1-800-Flowers, is, first of all, the salaries of his staff. “Then, there’s the indirect staff members, my IT team, my accounting team, my creative team, my colleagues. Then the infrastructure costs, server space. There’s a customer knowledge team, and we use up their time to understand how the affiliate program is working.” Bharwani said that promotions offered through affiliates should be added directly to the revenue share to get a true picture of how much the affiliate program costs the company.

    The first task of the affiliate manager or team is recruiting and approving new affiliates. Many large retailers approve each application by hand, paging through the affiliate’s site, making sure it’s professional and a good representative of the company. Even though 1-800-Flowers works with LinkShare, Bharwani said the first 30 or 40 minutes of his day is devoted to approving affiliate applications.

    Merchants will differ on what’s acceptable, they all share the risk of having their brand value diminished by its appearing on a shoddy affiliate site. Rick McGrath, director of e-commerce partner development for auto parts merchants J.C. Whitney Co., said, “Everybody starts someplace, and I try to maintain a low barrier of entry. But I need to see a clear commercial intent.” Sites that have pictures of the family vacation or someone’s favorite rock band will get the boot. And McGrath has no interest at all in sites that offer get-rich-quick-through-affiliate-marketing offers or multi-level marketing schemes.

    Next, he screens for downloadable applications like the Gator eWallet or WhenU, another deal-breaker. “That’s objectionable. I see that as undermining the affiliate program, in my humble opinion,” said McGrath.

    Bluefly’s Morris said he scrutinizes affiliate applications closely, and then continues to monitor the affiliates in the program. “We make sure they use the creative we provide and that the environment in which our creative appears is appropriate.” Bluefly staffers manually check affiliate sites, focusing on the ones doing the most business, but also performing random checks on less active affiliates. Besides a general level of professionalism, Bluefly makes sure the sites have adequate privacy policies and disclosures, and, he said, “are legitimately providing a service to their customers by promoting Bluefly.”

    The Creative Touch

    Affiliates aren’t professional designers, and even the sharpest affiliate can’t compete with the full-blown creative teams that retailers have in-house. Bad product photos scanned from a magazine, misspellings and incorrectly colored logos can make the merchandise look shoddy. To counter this, retailers end up creating special ads, content and images especially for affiliates.

    “You don’t want to just keep telling them, ‘Don’t do this,'” 1-800-Flowers’ Bharwani said. “You want to tell them, ‘Do this. If you want to send out an email, don’t send it with those ugly orange and pink colors, use this instead.’ We not only give them creative, but also help them with things like email templates.”

    Whether it’s producing separate-but-equal ad campaigns or simply reformatting existing digital assets, this work can stress the company’s resources or add to the overhead. It has the potential to divert time and attention from other forms of advertising. Overstock.com, with over 30,000 affiliates, has a dedicated designer producing materials for affiliates to use. Because the company buys limited lots of products, it instituted data feeds that every night automatically update dynamically displayed products on affiliates’ sites.

    Crying Game

    Good communication like that is important when working with affiliates, merchants say, not only to help affiliates succeed but to stave off problems. When affiliates feel they’ve been treated unfairly, they can strike back and really dent the merchant’s reputation. Internet message boards are rife with backbiting and flaming recriminations against merchants who disappointed.

    “If you have a few disgruntled affiliates or an issue that comes up, you have to be very proactive in resolving it,” Bharwani said. Merchants must deal with a wide range of personalities and operations, from highly professional types to loners in dark rooms. “There are guys who are big corporations and guys who are running it out of their homes. And each person matters.”

    Affiliate marketing may not be for every merchant. To avoid damaging the brand or siphoning off resources from critical projects, merchants must have the resources and culture to manage the program well. “You have to allocate resources, absolutely,” says Tiger Direct’s Matthews. “I believe you get out of it what you put into it. The key, he says, is to “balance what they want with what makes sense for you in a business case.”

    The bottom line: While there are risks, there are also rewards.

    SUSAN KUCHINSKAS, managing editor of Revenue, has covered online marketing and e-commerce for more than a decade. She is also the co-author of Going Mobile: Building the Real-time Enterprise with Mobile Applications that Work.

    Affiliates, Start Your Engines

    Unless you’ve been living in a cave for the last year or so, you probably realize by now that in order to get customers to your affiliate site you have to market it on search engines. Even if you haven’t realized this, your competitors certainly have, and if you don’t take advantage of what the search engines have to offer, your Web site is likely to go the way of many other dot-com dodos.

    Over the last few years search engines have emerged as the most viable option for reaching many users on the Web. As an Internet marketer, your success online may be determined by how well you learn how to play the search engine marketing game.

    In recent studies, search engines emerged as the number one way people find products or services on the Web, with about half of all Internet users utilizing search engines to find you.

    Searching for what you need using search engines has become so ingrained in the Internet psyche that people even go to a particular engine like Overture, and type searches like www.Yahoo.com in the search box, instead of typing that URL into the address bar. Some of the top searches on many of the search engines come from people using the search engine to find other search engines.

    As you may also have noticed, search engines are in the news lately. Google is always grabbing headlines, and the industry has consolidated, with many of the larger companies gobbling up the smaller folks in a race for Internet dominance. First, Overture bought Alta Vista, Fast and AlltheWeb; FindWhat merged with Espotting; and now Overture is hand-in-hand with Yahoo, which already purchased Inktomi.

    MSN is beefing up its own search services in order to compete, and is rumored to be eyeing Looksmart and Ask Jeeves as potential purchases. So a realistic scenario in the next few years will be that three major engines will control over 80 percent of all U.S. searches on the Web, and the balance of searches will be performed between hundreds of smaller engines.

    How can affiliates take advantage of that information?

    Think of some keywords that represent your business. There are hundreds of Web sites competing with you for placement in millions of searches per month. Competition will only get worse as more businesses start to get their Internet act together. You can’t ignore search engines in your marketing efforts if you want to succeed. And, after all, search engines do have many advantages:

    Affordability: The cost of a lead gained from a search engine marketing campaign is currently averaging about 29 cents. That’s a significant savings from the next least expensive Internet marketing vehicle, which is email at 50 cents per lead, according to a study conducted by Jack Myers LLC and presented at a Direct Marketing Association conference last March.

    Equality: The Internet is still the great equalizer when it comes to marketing. Any affiliate marketer or small business with a Web site can utilize smart search engine marketing practices and to compete with their larger and better-known competitors. Even though you may not have the money to launch a large search engine marketing campaign, with a little knowledge, you can do most of the work yourself and still compete with the big boys. Many small businesses have built a decent living just using the power of search.

    Flexibility: There are very few other venues where you can control so many aspects of the marketing campaign and stick a toe in the water for very little money. Search engine marketing allows you to test copy, placement, budget, messages and offers, on the fly, in real time. You don’t have to commit to a long-term contract or a minimum buy. You control the amount you spend, the cost per lead and the duration of the campaign.

    Accountability: If you set up your tracking correctly, you can easily and quickly establish the return on investment (ROI) for your campaign. This will allow you to correct as you go, redesign your Web site, change your product offering and make adjustments based on your profit margin. Never start a search engine marketing campaign without the proper tracking in place. You can learn so much from the insight you receive that you may have to rethink your whole business model.

    Accessibility: You can reach more targeted users utilizing search engine marketing than with any other marketing vehicle. You can target your campaign locally if your business is constricted by geography, or internationally if the world is your marketplace. Either way, Internet use is only going to grow in the next few years, so don’t let this opportunity pass you by.

    In light of all this, it seems obvious that the more you can learn about search engine marketing, the more successful your Internet business will be. You don’t have to do it all yourself, but you should certainly know how it’s done. That way you can decide whether to keep search engine marketing in-house or hire someone else to do it. Either approach will yield good results.

    In future columns I’ll discuss the different forms of search engine marketing and provide you with plenty of tips and tricks to ensure that you get your fair share of Internet customers. We’ll delve into all those acronyms you may have heard bandied about but never knew the definition of. Yes – the joys of SEO, WSO, PPC, CPC, SEM, PI and others, lie ahead. (Somebody stop me!)

    MARY O’BRIEN is a partner at Traffic Mentor.net. She has worked in Internet marketing for the past five years and was formerly senior director of sales at Overture.com.