Who are you? I really want to know. Anytime I can work in some lyrics by The Who or a headline with a nod to Family Feud, it’s a good day.
That said, it’s not easy to get a grip on this growing affiliate marketing community. There are only few concrete statistics and even those don’t always help paint a truly accurate picture of the overall affiliate marketplace. I think that’s why there’s been some buzz surrounding the AffStat 2005 Report Executive Summary, which came out earlier this week.
Affiliate marketing consultant Shawn Collins is the force behind the study, which surveyed more than 130 affiliate managers from a cross-section of the industry. These affiliate managers were probed on their overall statistics, as well as a number of issues about their affiliate marketing channels, such as staffing, recruiting, and management.
According to the findings, one of the biggest challenges in affiliate marketing is recruiting new affiliates. Twenty four percent of respondents named recruiting as their top challenge. Seventeen percent of those surveyed said activating affiliates was their major issue, followed by properly managing the affiliates or having too many affiliates to effectively manage (16 percent) and detecting fraud (14 percent).
About one in seven affiliate marketers, or 14 percent, reported that conversion rates on affiliate programs were greater than 5 percent, according to the study. An additional 10 percent reported rates of between 3.1 and 5 percent, while 13 percent reported conversion rates of 2.1 to 3 percent.
The report also revealed much about the structure of affiliate programs including how they paid commissions. Nearly three quarters of those surveyed said use pay per sale, 19 percent pay per lead, 3 percent pay per click and 2 percent used a flat-fee scheme to pay affiliates.
Other key conclusions included which networks and solution providers are being used, what percentage of each company’s total transactions was generated by affiliates and what types of rewards or incentives are being offered to affiliates. There are also lots of details on conversion rates, commissions and click-through. Get the full report for all the specifics.
There’s been a flood of research that crossed my desk recently. Here’s some other random research that grabbed my attention:
*In 2005, Virginia-based researcher Borrell Associates expects local Web sites to grow their advertising spend 46 percent to $3.9 billion, with the largest share continuing to go to local newspapers.
*In the last year, prices for ads placed on search results pages have risen about 25 percent, several research firms say.
*Microsoft’s share of the Internet search market has grown to 14.2 percent from 12.8 percent, according to recently released Nielsen/NetRatings figures.
*Bloggers amount to less than 2 percent of the adult US population, according to a recent study by Universal McCann and Media in Mind.
*One in ten people actually buy something as the result of getting a SPAM email, according to a recent study conducted by security firms Mirapoint and Radicati Group.
Be more than just a statistic; let me know more about your affiliate program.
Since today is Good Friday I want to share some things that I think are particularly good on this Friday.
Search is not just good; it’s hot, hot, hot. Microsoft is aggressively getting into the paid search fray. That’s good in the short run, because anytime Microsoft gets into a market things get stirred up (thinks CRM and browsers). However, I’m not sure about how things will shake out in the long run. Microsoft usually ends up as the proverbial 800-pound gorilla in almost any category it opts to enter and in the past (think spreadsheets, word processing, operating systems and email) that’s not always turned out for the best.
Ask Jeeves is getting a boost after agreeing to be ought by Barry Diller’s IAC. Now there is speculation that other bidders are interested in everyone’s favorite Internet butler. If being acquired can help propel Ask Jeeves into the top tier of search and give Google and Yahoo a run for their money, that’s good. Also, new ideas for making search better and easier can’t be bad. It’s also good for publishers who are tired of having to bow to the Google way of doing business.
Affiliates took issue with LinkShare and let them know. That’s a good thing. What’s even better is that earlier this week LinkShare announced it had changed the wording on its new affiliate agreement regarding implied credit checks. Affiliates felt the terminology in LinkShare’s new membership agreement made it sound like signing up to become an affiliate was dependent on a credit check. LinkShare CEO Steve Messer wrote a lengthy message on an affiliate forum to try and clear up the confusion.
A recently released study by Keynote published in Internet Retailer says that more people are turning to the Web to buy cars. Seventy-six percent of those surveyed say they would visit a manufacturers website before making a purchase. More than half of the respondents say they preferred looking online to other methods of research. I guess I think that’s good only because I’m in the market for a new car and I like feeling that I’m going about my research in the right way.
The world of search engines is heating up and there are a lot of big names jockeying for position.
Less than a week ago Microsoft’s MSN entered the paid search game and then earlier this week everyone’s favorite Internet butler, Ask Jeeves, agreed to by bought by media mogul Barry Diller’s IAC/InterActiveCorp.
The $1.85 billion stock deal, which should be finalized by the end of the year, is just the financial boost that could help Ask Jeeves to compete with the largest search players.
Currently, Ask Jeeves is considered a second-tier search engine, behind market leaders Google, Yahoo! Search, MSN Search, and AOL Search. Ask Jeeves had 5.3 percent of Web searches in the U.S. in December, according to comScore Media Metrix, while Google has more than 40 percent of the market.
But that could change. Ask Jeeves, which also owns Excite, iWon, and My Way, may get a shot in the arm by joining the IAC roster, which includes Citysearch.com, Expedia.com, Ticketmaster.com, Match.com, and retail channel Home Shopping Network. Those properties drew 44 million unique visitors in January, according to comScore.
It looks like search experts are divided on Ask Jeeves’ chances to make some inroads on the big boys. Many say the other search engines are just to popular. Still others, say that consumers aren’t really loyal to particular search engines. comScore reports that 65 percent of users use at least two search engines per month.
But for now, Ask Jeeves relies on Google for sponsored search results. Approximately 70 percent of Ask Jeeves’ revenue is drawn from ads negotiated by Google.
According to Minneapolis-based financial researcher Piper Jaffray, the market for ads linked to search results is projected to triple to $12.6 billion by 2010. Merrill Lynch Equity Research says that online advertising and search markets are growing rapidly. Search now accounts for 36 percent of U.S. online advertising and that figure is expected to grow 24 percent per year over the next five years.
I’m not sure if it was the green beer or yesterday’s overwhelming amount of media coverage devoted to Microsofts adCenter that has my head pounding this morning.
My bet is that rivals Yahoo and Google might be experiencing the same hangover as Microsoft continues it aggressive push into search and Web advertising.
Earlier this week Microsoft unveiled a prototype of its much-anticipated adCenter. Developed by the software giant, the product facilitates selling advertising based on key words consumers enter into the MSN search engine. MSN has been using Yahoo’s ad technology and that contract expires in June 2006.
The company is estimated to generate about $1.5 billion a year from Internet advertising, though Microsoft will not publicly break out how much of that revenue is generated by paid searches on MSN.
Microsoft Chief Executive Steve Ballmer told more than 500 big advertisers and marketers that search is just one piece of the company’s ad-selling platform. Speaking at Microsoft’s Strategic Account Summit, held Tuesday at in Redmond, Wash., Ballmer says the company plans to use the platform as a base to expand into other media such as television. Microsoft figures it won’t be long before people begin watching programming delivered over the Internet rather than via the traditional airwaves.
Although journalists were barred from the summit (boo), Microsoft extended a hand to rivals and marketplace leaders Google and Yahoo. Google Chief Executive Eric Schmidt and Ted Meisel, president of Yahoo Search Marketing and senior vice president of Yahoo, each gave talks on the state of Internet advertising.
But many industry watchers claim adCenter is such a big deal that Google and Yahoo should be very concerned. Jupiter analyst Gary Stein says in his blog that Microsoft did not enter this space with a ‘me-too’ product.
Forrester Research’s Jim Nail was widely quoted praising Microsoft’s adCenter technology as an “innovation” that will “set off a chain reaction” that will force Google and Yahoo to respond.
Similar to products already out there, adCenter has a Web-based control panel that enables advertisers to choose and buy keyword-based advertising. But Microsoft went a step further by allowing advertisers to target specific customers based on demographic information. Advertisers are then provided with reports on who actually clicked on the ads, not just who looked at them.
Microsoft’s paid search platform will provide detailed information, such as gender, age and location, for many people who use its search engine, allowing advertisers to target their ads to a specific audience.
Here’s an example of how that might work: A company could buy an ad that appears when 30 to 40-year old women in San Francisco making more than $50,000 a year search for shoes on MSN’s page. AdCenter can do this by using the information provided by customers who registered for its services such as Hotmail. It also uses information from those who customized the MSN home page to fit their interests. That information is supplemented with data purchased from credit bureaus and other public demographic information.
Microsoft’s move into this potentially lucrative area capitalizes on detailed demographic information the software company has gathered over the years, raising privacy concerns for some.
It’s probably no surprise that Microsoft has been tracking user information for many years across its various sites including MSN and Hotmail. The company’s huge database, which has data on tens of millions of individuals, has assigned each individual a global user ID.
However, past criticism from privacy advocates has kept the company from using any of the personal data. Some still fear that the Microsoft’s moves are Big brother-like. But Microsoft is not alone is in this. Google scans content to plant relevant ads for its free e-mail service. Yahoo uses some personal information gathered from its customers to target advertising on the Yahoo network, but it does not provide that service for outside clients like MSN.
So as the industrywide trend of using personal information to garner advertising dollars continues and the Internet becomes more invasive, we have to wait and see when adCenter is launched in the US. A version of Microsoft’s adCenter platform is currently being tested in Singapore and France. It is expected to expand into other regions but Microsoft would not give specific details.
Let me know what you think about how Microsoft might change the search and Web advertising landscape. Or just give me your best hangover remedy.
Affiliate network KowaBunga! Marketing was acquired Monday for an undisclosed amount by CGI Holding Corp. It looks like Todd Farmer, who founded KowaBunga and is currently CEO of the company, will continue to head up the subsidiary following the merger.
KowaBunga, which started in 1996, now has more than 2,000 merchants using its My Affiliate Program Tracking and Management solution. In addition, thousands of affiliates are part of KowaBunga’s newly released Kolimbo Affiliate Network.
What seems unclear is how exactly how this deal fits in with CGI’s recent acquisition spree. Earlier this month CGI signed a letter of intent to buy a New Jersey affiliate marketing company called PrimaryAds in a deal that is estimated to be worth as much as $26 million.
CGI Holding, which is seeking shareholder approval to change its name to Think Partnership Inc., also recently entered into an agreement to merge with privately-held Meandaur, which does search marketing under the name Proceed Interactive.
CGI currently has seven subsidiaries: WebSourced, a search engine optimization and pay-per-click campaign management company; MarketSmart Advertising, Rightstuff, which does business under the name Bright Idea Studios) and Checkup Marketing, which all provide off-line advertising, public relations, marketing, branding and shopping evaluation services; Cherish, an online dating company; Ozona Online Network, which provides a full range of Web design, hosting and e-commerce solutions; and KowaBunga.
I haven’t heard much from KowaBunga affiliates on this one. I’d like to know what you think.
The first annual Word Of Mouth Marketing Summit is being held in Chicago at the end of this month. It’s billed as the first “conference on the art and science of word of mouth marketing.”
The development of new technologies coupled with the medium of the Internet has fueled many new marketing methods. There’s buzz marketing, viral marketing, community marketing, grassroots marketing, evangelist marketing, product seeding, influencer marketing, cause marketing, conversation creating and brand blogging.
And there seems to be evidence that many of these marketing tactics are being employed with great success by affiliates. Be sure to check out the upcoming issue of Revenue (due out April 22) for a story on how offline marketing is boosting online sales.
For my money word of mouth advertising has more credibility than any other form of external marketing. That’s because I’m getting the opinion or “review” from a trusted source – a friend, a family member or co-worker.
Someone I have an established relationship with is unlike to steer me in the wrong direction. Plus, since I know these folks, I have a good idea of how their taste jives with mine - even if we have differing opinions. I have one friend who loves movies, but if he says a flick was hilarious, I avoid it at the theater and wait to rent it on DVD.
For my part, there are few people in my circle that haven’t heard me gush about my favorite restaurants, my fabulous hair stylist, my “secret” bargain shopping spots and what I’m watching on TV.
I’m good at word of mouth marketing. I know who to tell the information to and just what to tell them. I’m aware that telling my best friend, who knows practically everyone in Bay Area and beyond, means that the good word will spread to many, many more people than I could ever reach. However, if I tell my mom in Massachusetts about a great new eatery in San Francisco that really doesn’t help the cause. Though, if I want someone to brag to others about my accomplishments Mom is my go-to-gal.
Word of mouth can be an incredibly powerful marketing tool, but it cuts both ways. Although 96 percent of unhappy customers do not complain when dissatisfied, they do much more do more damage by telling others about their bad experience.
One unhappy customer will tell 9 to 10 other people of their negative experience. In turn, these people will tell more than 20 others. And because it costs up to 10 times more to acquire a new customer than keep an existing one, having a bad buzz about your products or services can really do some damage.
I’ll chat with a few pals and some co-workers about a great new movie, but I’ll recount in great detail, for anyone within earshot, the unsatisfactory customer experience I had at the muffler shop or with the plumber.
But there is so much more to word of mouth marketing than just clueing your friends into the latest indie band that you’re sure will be the next big thing. There is actually a science to it. And like most sciences and disciplines there are larger issues such as ethics, standards and metrics that need to be discussed.
The code cannot really be enforced. It’s essentially just a set of ethical guidelines stating that consumer protection and respect are paramount and word-of-mouth campaigns should practice honesty of relationship, opinion, and identity.
This means consumer advocates are encouraged to disclose their relationship with marketers. Consumers should only be asked to share their honest opinions, and no one involved in the campaign should hide his identity. An exception would be if an obviously fictional character were portrayed in a campaign.
Further, WOMMA says, marketers should respect the rules of the medium, whether it’s a website, blog, discussion forum, or live setting. The group also says it opposes involving children under the age of 13 in word-of-mouth efforts and abides by all legal restrictions on marketing to minors. These guidelines have not been finalized and document is expected to continue to evolve based on feedback from consumers, marketers, and other stakeholders.
There has been some early criticism of the WOMMA Ethics Code. Some say it promotes an ethical double standard for volunteer agents and paid agents that are not held to the same set of codes; that there is an absence of real measures to protect minors from exploitation by marketers, and that the organization has a narrow and non-inclusive definition of what constitutes viral, buzz and word of mouth marketing.
Those critics might turn out to be right (only time will tell), but at least this is a small step in the right direction for word for mouth marketing.
Basically, the word of mouth marketers are trying to avoid the fate of email marketers. Email has such a bad rap that most of the general public doesn’t bother to make a distinction between the legitimate and effective use of email as a marketing tool and the hordes of spammers and scammers looking to defraud consumers.
Have a comment on word of mouth marketing. Speak up. Let me hear it.
As I searched for things to write about today, I realized that my search should end with search. Here are few search-related news items that recently caught my eye.
Monday Kanoodle launched its sponsored links product built for local targeting on content pages. Called LocalTarget, it aims to help advertisers reach customers in a specific market and drive additional customers to local brick and mortar outlets or increase advertisers brand presence in a particular geographic area.
Here’s how it works: advertisers looking to target the Seattle market select the LocalTarget topic of “Seattle.” These listings are then mapped to the content pages of a local media property that targets the Seattle market. Advertisers will be able to bid, buy, report and optimize their LocalTarget listings separately from their other sponsored links campaigns.
There’s a lot of talk about RSS and here’s an example of how it fits into the search world. Kanoodle last week unveiled a self-service integrated RSS feed delivery and monetization service.
BrightAds RSS is a service that is part of the Kanoodle BrightAd automated network for publishers. Through BrightAds RSS, Kanoodle’s sponsored links will are inserted directly into publishers’ RSS feeds within posts or as individual posts. Publishers’ feeds will be hosted and distributed through Moreover Technologies, which developed BrightAds RSS in conjunction with Kanoodle. Moreover also launched its FeedDirect RSS Ads service.
Also, last week, Crystal Semantics, a provider of contextual search solutions, received a patent for its Sense Engine technology. The patent (No. 6,847,972), granted by the U.S. Patent and Trademark Office, allows the correct senses of words to be determined by using a linguistics-based sense engine that determines the sense of a word.
For example, searching for the word ‘depression’ in relation to economics as apposed to the context of mental health. That means the words and senses of a dictionary are being associated with the knowledge categories of an encyclopedia.
A new search tool is trying to make it easier for users to find what you are looking for faster and get better results. Search Word Pro automates search techniques and tactics to help users build better searches.
The program’s launch page opens with 25 to 50 selected search engine options. The Search Word Pro website has more than 90 topic-specific search builders, organized into a dozen popular categories. The program allows users to select from over 250 search engines, and it uses a vocabulary of over 12,000 words.
Queries are sent to an organized list of commercial search engines, specialized Web resources, government agency search engines and databases, blog search engines, magazines, news services and news search engines. Searches can be saved (up to 20), shared via email and improved from automatic feedback. For marketers, it will enable them to tell their customers the right search words, rather than let them rely on imagination and random luck.
And finally, Sortprice.com announced that PetSmart, GameStop and Zappos.com have joined its shopping search engine. The company is also working to ensure a hassle-free shopping experience for customers by providing its merchants with a Sortprice Certified Merchant logo. In addition, Sortprice’s content is now available in RSS feed format.
I’m still searching for answers to the big questions of life, but you can enlighten me about new trends in search technology by adding your comments or blogging. Go for it.
The countdown has started. There are only 19 more days until it’s officially Spring. I can’t stop dreaming about days without rain here in the Bay Area. The promise of better weather and Spring Training are all I can focus on right now.
So, if you’re looking here for a snappy, cohesive, insightful blog entry that will dramatically improve your affiliate life stop right here. Instead, I thought I’d use this entry to jot down a few random things that have come across my desk, have caught my attention or just piqued my interest in recent days.
Apparently Circuit City’s new executive management thinks that the company doesn’t need its largest affiliate partner – Amazon.com – anymore. Just two weeks after Circuit City promoted its chief merchandising officer, Philip Schoonover, to president, the company says it wants to concentrate on increasing sales at its own website rather than continue its 3 1/2-year relationship with Amazon.com.
A Circuit City spokesman declined to say how much his company has sold via the Internet or through Amazon.com. This is the first time I’ve heard of such a high-profile retailer dropping Amazon. If you know otherwise, please let me know.
At this week’s Search Engine Strategies Conference & Expo in New York, Performics introduced FeedLab, its newest data feed management technology. There have been a lot of complaints over the last several months across the affiliate space about data feeds. They are cumbersome, complex and a pain the you-know-what to manage. Check out the current issue of Revenue for our complete take on the topic.
To its credit, Performics is among those looking to automate cross-functional processes and scale data feed marketing programs. The FeedLab technology focuses on distribution, data feed enablement, optimization and logistics to fully automate and improve data feed delivery and performance for clients. The technology is used by Performics’ data feed management team to acquire, segment, transform and produce customized data feeds. It also manages an advertiser’s data feed with comparison-shopping engines, Web publishers and participants in the Performics affiliate network. I’ll be anxiously awaiting your feedback on how much of an improvement this technology really is.
Spyware is in the news again, but this time it’s for a fight amongst those that are supposed to be united in their efforts to stop it. The Consortium of Anti-Spyware Technology vendors, COAST, a high-powered coalition of anti-spyware vendors, has collapsed as three founding members –Webroot Software, Aluria Software and Computer Associates International’s PestPatrol– withdrew from the group. Another founder, Lavasoft, pulled out of the consortium earlier and accused COAST’s leadership of focusing too much on generating revenue. The latest withdrawals stem from the decision by COAST to allow membership to 180solutions, which has often been accused of using questionable tactics to install ad-serving software on computers.
Many of the companies that withdraw from COAST say they were uncomfortable with the idea of adware firms using COAST membership as a marketing tool. COAST was originally created as a place for anti-spyware vendors to meet, discuss and create standards for treating a common problem.
And finally, someone emailed me recently and the signature on the message included the job title of Chief Rainmaker. It immediately took be back to the late 90s when dotcommers were making up their own job titles. Everyone was trying hard to be different. That meant there were fewer Human Resource Specialists and more People Wranglers. Idea Guy replaced Business Development Manager and Chief Software Architect was out, while Head Geek was in. I’ve started noticing more and more of those oddball titles in the affiliate marketing space. Maybe it’s a way for a burgeoning this marketplace to differentiate itself by not taking on the job titles of the establishment.
So, from now on please refer to me as the Princess of Revenue magazine and start blogging now to let me know if you have a unique job title or if you’ve been dreaming up unique Spring promotions for your affiliate site.
