Going Out Is In
By: JENNIFER D. MEACHAM
Companies are outsourcing affiliate managers to fuel online marketing programs.
Former London-based freelance writer Rob Palmer knew he was on to something when he launched the affiliate program for his FreelanceWorkExchange.com subscription site. For several years he ran the program in-house; revenues were decent, affiliate applications were steady, but "there simply weren't enough hours in the week for me to manage the program and deal with all the other management issues which required attention," says Palmer from his new home in Australia. Plus, "the freelance market is massive and growing fast, but most affiliates hadn't realized this can be a very lucrative source of commissions. I felt there was huge potential in the affiliate sector that we were not making the most of."
His solution? Like the employers that use his site to outsource writing, programming, design and other freelance functions, he set out to find an external source of his own: an outsourced affiliate manager. Palmer found it with affiliate-turned-OAM Greg Rice.
Outsourcing isn't new. Companies have done this for years, primarily to – according to a Dun & Bradstreet study – maintain competitive edge, focus on core business and improve service quality.
"But it's new in comparison to the overall market that we're in," says Andy Rodriguez, an OAM and affiliate management consultant who will host a third OAM training conference in Chicago this August. "There just aren't that many [OAMs] around. In the past, a lot of merchants hired a manager and said, 'Here's the affiliate program.' Then they discovered what they really needed was someone that can lead a virtual salesforce, managing a large group of people by phone, by email and by instant messaging, who has a background in technology and knows how the Web works. That's why so many merchants are now correcting their mistake of just hiring anyone in-house, and going out and hiring the best [OAM]."
Industry watchers informally estimate there to be a few hundred OAMs – either on their own or as part of an OAM agency – worldwide. And that number seems to be on the rise.
"The demand for OAM is large," says Linda Woods, former Commission Junction affiliate manager and founder of the sixyear- old OAM agency PartnerCentric in Santa Barbara, Calif. "Our biggest challenge over the past year has been to find topquality, experienced AMs."
Others agree.
"Outsourced affiliate program management is a very new and, hence, an extremely exciting sphere to be working in these days," Evgenii "Geno" Prussakov, a St. Petersburg, Russia-based OAM who manages programs for such U.S. clients as RussianLegacy.com and FantasyJewelryBox.com, says. "Many online businesses are in need of good affiliate program management, yet the number of experienced [OAMs] around the world is very limited. The competition between [OAM] firms is certainly growing, but the market is still very new and fresh."
PartnerCentric's OAMs hail from affiliate teams at Orbitz.com, Gap.com, 1800flowers.com and other "upper echelon" merchants; each having at least one year of full-time AM experience.
Even the term "outsourced affiliate manager" is somewhat nebulous. Few OAMs operate on their own; many have staffs of three or more assisting with new clients. "To find one person with a blend of all the skill sets needed is pretty rare: recruiting, selling ability, keywords, optimization," says Peter Figueredo, CEO and co-founder of NETexponent, a NYC agency running affiliate programs for NYTimes.com, FinancialTimes.com, PuritansPride.com and others. (He has 13 on staff, and is hiring more "online media managers" to fit the OAM bill.) "We approach it as a team, bringing different people with different skill sets together to work with our client accounts."
That's the case with OAM agency PartnerCentric.
"Very few [merchants] have the internal expertise to run an affiliate program to the level that it needs to be run today," says Woods. "It's incredibly complex now because of all the new issues involved: fraud, spyware, conversion rates, EPC, competition. Two years ago, there were one or two furniture companies with affiliate programs. Now there are 40. Affiliates used to have a few hundred merchants to choose from in a network; now it's a few thousand. The tracking has become more complex. And there's even competition for clients from OAMs, especially if a merchant feels one AM can give them more exposure. That's the kind of complexity we face every day, so managers have to really know what's going on."
In April, PartnerCentric acquired AMWSO, a Thailand-based OAM agency led by Bangkok-based Chris Sanderson. "By being able to work with a U.S.-based OAM agency, we can benefit our team here," says Sanderson, pointing to programs his team already runs for Shopster.com, WesternUnion.com and 18 other international merchants. "That's the personal touch we wanted."
PartnerCentric manages affiliate programs for about 50 merchants, including TheCompanyStore.com catalog company, NationalGeographic.com, DigitalRiver.com (a half-billion-dollar e-commerce software company) and recently ClubMom.com. It's had 300-percent-per-year revenue growth for the past three years, and Woods expects to double its revenue in 2006. PartnerCentric now has 20 on its team, plus eight other staffers; a move Woods says is "definitely moving towards the big boys."
Some affiliates, however, are often going it alone until they've built up enough business to start adding staff.
For instance, the new outsourced program manager for FreelanceWorkExchange.com, Greg Rice, was once a superaffiliate for TigerDirect.com. He'd been an affiliate for seven years running a shopping mall site, and made the switch after going through Rodriguez's mid-2005 OPM training. Currently, Rice owns CommerceMC.com and manages four programs, including ITHeadhunter.net.
"Working as an affiliate, you have contact with a lot of affiliate managers," Rice says. "You get to see firsthand what works and what doesn't work – and you get to see firsthand the opportunities that exist because most AMs don't have a clue other than putting links up there and walking away from it."
Another affiliate who's going the OAM route is Kevin Webster, owner of outsourced B2B affiliate marketing agency OPMWeb.com, near Rochester, NY. For five years he ran a site called CorporateLeverage.com, stocked with his own articles on business-to-business sales and affiliate links to relevant products. In late 2005, he left his day job selling Cingular and Verizon cell phone plans to businesses, sold his affiliate content "for a scant $1,500" and launched OPMWeb.com.
"The rumor is that this industry is underpopulated," Webster says. "It's my intent to grow this organization slowly and smartly, ensuring that each new client receives all the focus their program deserves. That's critically important at the launch of an affiliate program, and never really changes."
Webster's first client is SimpleGuardian.com, a notification security and medical alarm company targeting real estate agencies and arenas; two other contracts are in the works, he says.
"Simple Guardian had a very traditional brick-and-mortar sales model before this point," Webster says. Continued on Page 2...
Tags:
outsourced program manager, outsourcing, outsourced affiliate manager, affiliate manager, freelance, consultant,
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