Increase CPM, Dont Replace it
| Category: Affiliate Marketing - Development | Date: 2003-04-28 |
Overlooked Affiliate Programs Gain Momentum
How do you build reach quickly with little investment on the Internet? Affiliate programs are a great place to start.
A variety of companies in the interactive space, from Dell to Priceline, have implemented programs like these to great success; Art.com is one of them. The company is part of a quiet online revolution aimed at raising CPM, and reducing customer acquisition costs through affiliate programs. Recently acquired by Getty Images for close to $200 million, Art.com draws about 60 percent of its income from these programs. The key: Instead of paying for the ad, Art.com pays for the sales and click-throughs generated.
The Ease of Affiliate Programs
Since virtually anyone with a website or ezine can market another companys products or services to their existing traffic, affiliate programs are simple. The website handles the marketing and the vendor fulfills the sale. Probably the most famous example is Amazon.com they pay other websites for each book sold. Other programs pay per click-through, per lead, or based on a hybrid model mixing actual sales with minimum advertising buys.
By reducing the cost of advertising, are working. Heres how:
ActiveAffiliates: About 50 percent who sign up actually post ads. Many programs allow users to purchase through affiliate links as well, forming buyers clubs to increase sales. Sales: Between 1-33 percent of affiliates will make sales in most programs.
Total Sales from Affiliate Programs: Estimates range up to 60 percent of total sales.
Cost Savings: Affiliate programs can lower customer acquisition costs by gaining access to existing traffic and paying for advertising based on results.
Why is this powerful marketing tool such a secret? Many successful companies keep the statistics private to protect their best sellers. Heres what the best affiliate programs do to succeed:
Affiliate Programs - What Works In Context Marketing:
Art.com
Art.com created single product Web Pages and storefronts for inclusion within other websites. Art.com becomes integrated with the website, instead of looking like an outside advertiser. In March 1999, Art.com founder Bill Lederer shared the results: $20 million in sales. About 60 percent of that was derived from his affiliate network.
Advertorials/Endorsements: ActiveMarketplace.com
ActiveMarketplace.com introduced the book, "Winning the Affiliate Game" to an influential affiliate prospect by sending one email. The prospect read the book, liked it, and endorsed the product to the 6,000 consumers in his ezine subscriber list. The results: 227 sales x $67 = $15,209 in sales within 3 weeks, at an 8 percent visitor to sales ratio (sell-through rate). ActiveMarketplace.coms CPM was higher than a banner ad would have generated. And, remember, these were the results of just one affiliate relationship.
Niche Distributor Networks: Outpost.com
Outpost.com created a Macintosh affiliate storefront and tapped into a distributor network for a supposedly small, niche market. In February 1999, Outpost.com revealed the most successful affiliates in its network. Five of the 7 sites, generating $15,000 in gross sales each, were low traffic, Macintosh focused, websites.
Lead Products: Register.com
Register.com offers free domain name registration services and gets paid a commission by Network Solutions for the "free" referral. The affiliate product is a lead item for Web hosting and ebusiness services. Register.com then emails the domain name owner to offer all the services anyone with a domain name would need. The power is in the lead product.
What Doesnt Work
Same Old Banner Ads
Affiliate programs are a way to increase CPM and fill dead ad space with results-based advertising. But affiliate programs that fail to use direct response banner ads suffer the same fate as any old banner ad. The key is in improving the creative and putting in a simple call to action for one product.
Low Margin Products
Imagine going out into the brick and mortar world, inviting someone to sell your $200 product, yet paying them only $1. Affiliates are the sales force an asset; many companies pay pitiful margins, rarely write checks, and then wonder why their affiliate program is flopping.
Counting Affiliates Like Hits
Many programs brag about the thousands of affiliates they have. Meanwhile they do nothing to promote them. Having lots of affiliates is good, but having lots of successful affiliates is even better.
No Guidance, No Training, No Activity
With many affiliate programs, you never hear from them again after signing up. Sales training is critical to success. Without training, affiliates will do whatever they want, which wastes time and money.
Shopping Cart Mania: Huge Product Selections Overwhelm Potential Buyers
Some affiliate programs drive people to a shopping section filled with thousands of items for sale. The overwhelming volume of choices undermines sales.
Amazon.coms success was achieved by recommending individual products. By endorsing a website, and driving the consumer to a single purchase decision, affiliate programs work.
Affiliate programs are reshaping banner ad space and Internet merchandising. Getting people to buy the first time is the real key from there you can send them to your shopping section. If done correctly, a company can reduce marketing costs, test quickly, and set up a vast network of affiliated sites for little investment.
About the Author
M. Declan Dunn is a Web publisher, sales trainer, online designer and Internet consultant. He is also the author of The Complete, Insiders Guide To Affiliate and Associate Programs, Winning The Affiliate Game, and publishes a monthly online newsletter, Links to Sales.
:To contact see details below.
dunn@activemarketplace.com
http://www.activemarketplace.com
How do you build reach quickly with little investment on the Internet? Affiliate programs are a great place to start.
A variety of companies in the interactive space, from Dell to Priceline, have implemented programs like these to great success; Art.com is one of them. The company is part of a quiet online revolution aimed at raising CPM, and reducing customer acquisition costs through affiliate programs. Recently acquired by Getty Images for close to $200 million, Art.com draws about 60 percent of its income from these programs. The key: Instead of paying for the ad, Art.com pays for the sales and click-throughs generated.
The Ease of Affiliate Programs
Since virtually anyone with a website or ezine can market another companys products or services to their existing traffic, affiliate programs are simple. The website handles the marketing and the vendor fulfills the sale. Probably the most famous example is Amazon.com they pay other websites for each book sold. Other programs pay per click-through, per lead, or based on a hybrid model mixing actual sales with minimum advertising buys.
By reducing the cost of advertising, are working. Heres how:
ActiveAffiliates: About 50 percent who sign up actually post ads. Many programs allow users to purchase through affiliate links as well, forming buyers clubs to increase sales. Sales: Between 1-33 percent of affiliates will make sales in most programs.
Total Sales from Affiliate Programs: Estimates range up to 60 percent of total sales.
Cost Savings: Affiliate programs can lower customer acquisition costs by gaining access to existing traffic and paying for advertising based on results.
Why is this powerful marketing tool such a secret? Many successful companies keep the statistics private to protect their best sellers. Heres what the best affiliate programs do to succeed:
Affiliate Programs - What Works In Context Marketing:
Art.com
Art.com created single product Web Pages and storefronts for inclusion within other websites. Art.com becomes integrated with the website, instead of looking like an outside advertiser. In March 1999, Art.com founder Bill Lederer shared the results: $20 million in sales. About 60 percent of that was derived from his affiliate network.
Advertorials/Endorsements: ActiveMarketplace.com
ActiveMarketplace.com introduced the book, "Winning the Affiliate Game" to an influential affiliate prospect by sending one email. The prospect read the book, liked it, and endorsed the product to the 6,000 consumers in his ezine subscriber list. The results: 227 sales x $67 = $15,209 in sales within 3 weeks, at an 8 percent visitor to sales ratio (sell-through rate). ActiveMarketplace.coms CPM was higher than a banner ad would have generated. And, remember, these were the results of just one affiliate relationship.
Niche Distributor Networks: Outpost.com
Outpost.com created a Macintosh affiliate storefront and tapped into a distributor network for a supposedly small, niche market. In February 1999, Outpost.com revealed the most successful affiliates in its network. Five of the 7 sites, generating $15,000 in gross sales each, were low traffic, Macintosh focused, websites.
Lead Products: Register.com
Register.com offers free domain name registration services and gets paid a commission by Network Solutions for the "free" referral. The affiliate product is a lead item for Web hosting and ebusiness services. Register.com then emails the domain name owner to offer all the services anyone with a domain name would need. The power is in the lead product.
What Doesnt Work
Same Old Banner Ads
Affiliate programs are a way to increase CPM and fill dead ad space with results-based advertising. But affiliate programs that fail to use direct response banner ads suffer the same fate as any old banner ad. The key is in improving the creative and putting in a simple call to action for one product.
Low Margin Products
Imagine going out into the brick and mortar world, inviting someone to sell your $200 product, yet paying them only $1. Affiliates are the sales force an asset; many companies pay pitiful margins, rarely write checks, and then wonder why their affiliate program is flopping.
Counting Affiliates Like Hits
Many programs brag about the thousands of affiliates they have. Meanwhile they do nothing to promote them. Having lots of affiliates is good, but having lots of successful affiliates is even better.
No Guidance, No Training, No Activity
With many affiliate programs, you never hear from them again after signing up. Sales training is critical to success. Without training, affiliates will do whatever they want, which wastes time and money.
Shopping Cart Mania: Huge Product Selections Overwhelm Potential Buyers
Some affiliate programs drive people to a shopping section filled with thousands of items for sale. The overwhelming volume of choices undermines sales.
Amazon.coms success was achieved by recommending individual products. By endorsing a website, and driving the consumer to a single purchase decision, affiliate programs work.
Affiliate programs are reshaping banner ad space and Internet merchandising. Getting people to buy the first time is the real key from there you can send them to your shopping section. If done correctly, a company can reduce marketing costs, test quickly, and set up a vast network of affiliated sites for little investment.
About the Author
M. Declan Dunn is a Web publisher, sales trainer, online designer and Internet consultant. He is also the author of The Complete, Insiders Guide To Affiliate and Associate Programs, Winning The Affiliate Game, and publishes a monthly online newsletter, Links to Sales.
:To contact see details below.
dunn@activemarketplace.com
http://www.activemarketplace.com
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