Web Hostgods

* Update: thanks to MarketingVOX for updating the content of thier article.

Remember the Telephone Game from when you were a kid? Somebody would say a phrase or sentence to one person and that person would pass it on to the next person. The farther it goes, the more the message is distorted. Cute on the playground, not so cute in news reporting.

You see, I published the annual AffStat report on affiliate marketing benchmarks last week. This was followed up by a summary from Internet Retailer.

Everything was fine so far. Then MarketingVOX excerpted and interpreted the Internet Retailer piece with the title, E-tailers’ Affiliate Programs Slowing Down.

The MarketingVOX article started with…

The overall effectiveness of affiliate marketing is falling for the online retailers that still maintain such programs; moreover, fewer retailers have large numbers of affiliates - sites that drive traffic and sales to online retailers’ e-commerce sites.

I’ve got a problem with this in a couple of areas. For starters, “online retailers that still maintain such programs” - was there a mass exodus I missed?

Online retailers that still maintain such programs dominate the comScore top retail Web sites list annually. The likes of Amazon.com, Dell.com and Walmart.com are still keeping the faith.

And the comment that “fewer retailers have large numbers of affiliates - sites that drive traffic and sales to online retailers’ e-commerce sites” - yes, affiliate managers are slimming the roles, but not the “sites that drive traffic and sales to online retailers’ e-commerce sites”.

They’re dumping the dead weight - affiliates that join and don’t become active after a fixed period of time. Having a bloated number of joined affiliates was cool to excite investors and journalists in 2000, but it’s an antiquated concept today.

Anyhow, the message from MarketingVOX carried along to Retail Blog Marketing, where they asked, “Affiliate Marketing Now Less Effective?”

This article boasts, “I have suspected for a long time that managed affiliate marketing programs work for 10% of merchants and are a waste of money for the rest. According to this article, I was correct.”

The supporting data? The information from AffStat that “Last year, 15% of etailers had 10,000 or more affiliates; that number has dropped to 9% for this year.”

As explained above, the total number of affiliates is pure vanity and has no bearing on the performance of an affiliate program.

No need to get excited - the optimization of affiliate programs doesn’t equate to slowing down or becoming less effective.

As Loretta Lynn sang…

I can’t understand a word your sayin’

We’ve got a bad connection on our minds

Communications one thing we never seem to find

Oh Lord I’m sorry, but there’s trouble on the line

One late night at Affiliate Summit 2007 West, I stopped by the convenience store in Bally’s Las Vegas to pick up some munchies. I picked Fig Newtons and the cashier asked if I was part of the “marketing conference.”

I answered yes and asked why? It seems the folks from the marketing conference were buying Fig Newtons at an unprecedented rate.

Are affiliate marketers more likely than other citizens of the world to eat Fig Newtons? Who cares? But there are a lot of other interesting factoids that were revealed in a recent affiliate census.

The UK Affiliate Census Report was published by E-consultancy.com in association with Affiliate Program Advice.

E-consultancy is an online publisher of best practice internet marketing reports, research and how-to guides in the UK.

Affiliate Program Advice is primarily an affiliate marketing consultancy and affiliate program management agency with an emphasis upon research and development within the affiliate marketing industry.

The purpose of the UK Affiliate Census Report was to provide a better understanding of affiliates in terms of:

• Their profile (e.g. who they are and where they live).

• Their lifestyle as affiliates.
• The nature of their affiliate activity / business.
• Their relationship with networks and merchants.
• Their opinions about key issues and market trends.

More than 1,500 affiliates took part in the survey at the end of 2006. Key findings from the Affiliate Census include:

• The overwhelming majority of affiliates are male (83% of respondents)

• 27% of affiliates say they do affiliate marketing as their day job (compared to 73% who do it in their spare time)
• Half of all respondents (49%) earned less that £500 a year from affiliate marketing
• Of those who do affiliate marketing as their day job, 61% earned at least £20,000 a year
• 10% of day-job affiliates earned more than £750,000 in the last year from affiliate marketing
• Only 26% of affiliates have done any marketing courses compared to 73% who have not
• Search Engine Optimization (SEO) is far and away the most commonly used method of promoting merchants & getting traffic. Organic search is used by 74% of affiliates compared to 38% who use Paid Search
• Affiliates are typically signed up with multiple affiliate networks

The full UK Affiliate Census Report can be accessed by registered E-consultancy users at http://www.e-consultancy.com/publications/affiliate-census.

There are lots of facts and figures with respect to affiliate marketing out there this month.

Internet Retailer covered the recently released AffStat 2007 Report of affiliate marketing benchmarks.

The article, “Online marketers using fewer affiliates, report says,” touches on the trend of smaller affiliate programs, as the title suggests.

Lots of other industry numbers are highlighted in the Internet Retailer piece.

Also, Performics commissioned and released some unique comScore research which provides a demographic profile of the typical affiliate shopper.

Findings of the Performics study include:

• Affiliate shoppers are 17 percent more likely than the average Internet user to have average household income greater than $75,000

• Affiliate shoppers skew older than the total Internet population
• Affiliate shoppers are 4 percent more likely to have children in their households than the typical Internet shopper
• Of those consumers who did purchase through the affiliate channel, their average online order value was higher than that of the general Internet user
• Affiliate consumers are 43 percent more likely to convert into a sale than consumers directed by other referrals, which were defined as all activity that did not come directly to the merchant site or arrive via an affiliate link

More data is available in the Affiliate Consumer Insights report.

How do I get started in affiliate marketing without any money?

I don’t mean to dash your dreams, but that’s almost like asking how do I start my car with an empty gas tank. The answer, unfortunately, is that you don’t.

Just like a car, your affiliate business needs some money to fuel it.

You can get started with minimal investment by getting a domain name and shared hosting for your new Web site.

Start up a site on a topic that interests you. Generate unique content with reviews, articles, etc. When you have some more money, start an account with an e-mail service provider, so you can start a newsletter and have visitors opt-in.

Also, start participating in affiliate forums and read affiliate blogs.

Lots of free education and opportunities to learn from the great minds in the industry that way.

When you start earning money as an affiliate, I’d urge you to re-invest it to grow your business.

LinkShare has announced the release of some enhancements to their affiliate interface.

Interface Alerts
To keep you updated on the latest news, enhancements, and system alerts, LinkShare has added a new section to the home page of the affiliate interface in the upper left corner. This new section will enable you to quickly see information important to your program. Alerts will be posted by level of importance with red being the most urgent message and yellow being the lowest level.

Affiliate Private Offer Management
To make it easier to display all private offers that are extended to you, LinkShare has added a new Private Offer page to the Your Account tab in the Affiliate Interface. You will now see private offers from merchants whose programs you are a part of, as well as from additional merchants who wish to extend to you a private offer. You will have the ability to accept or reject these private offers.

Merchant Status Screen Update
In the past, when a merchant’s status changed in the LinkShare system, affiliates partnered with that merchant received an email to that effect, but the email did not include any reason for the change. Now, if a merchant’s status changes, affiliates partnered with that merchant will receive an email from LinkShare notifying the affiliate of the change and the reason for the change. LinkShare will continue to update the Merchant Status Update page under the Your Account tab with the merchant changes in the affiliate interface.

If you have any questions about these enhancements, LinkShare encourages you to go to www.linkshare.com/support and submit your question.

How much does an affiliate marketing agency normally charge to run an affiliate program for a merchant: 15% or 20% of revenue, plus a flat fee?

The rates vary wildly depending on which company and/or affiliate manager is managing the affiliate program.

Outsourced affiliate program managers (OPMs) general charge a flat fee per month, and some also require a percent of the transactions referred by affiliates.

According to the latest data I collected for the AffStat 2007 Report, about 30% of OPMs charge a total of $4k or less per month and a similar group of approximately 30% of OPMs cost their clients over $10k with the remaining 40% or so ranging from $4k to $10k per month.

While you might be able to find affiliate managers who are willing to work strictly on performance, I’d urge you to take a good look at their background and get references.

Then again, do this for any prospective affiliate management firm.

Affiliate Summit has grown to new heights. We’ve finished adding in all of the onsite registrations from Las Vegas and have a final tally: 2,079 attendees.

Back in November 2003 for the first Affiliate Summit, there were 200 attendees. A little more than three years later, the crowd has grown to approximately 1,000% of the first show.

Registration is now open for the next Affiliate Summit taking place July 8-10 in Miami.