Affiliate Marketing Blog - a Traffic Junction Blog

We are almost at the beginning of the hottest season of the year (business-wise) — the eagerly awaited fourth quarter, when billions of dollars worth of shopping takes place online.

However, a recent study conducted by Harris Interactive (on a representative sample of over 2000 online shoppers) shows that almost 40% of online shoppers abandon a site without completing the planned transaction because of problems with the site. That is a significantly high number , particularly if one were to look at it in terms of lost opportunity. Not to forget that the e-retailer may have lost the customer for life.

The biggest problems reported by the study, which are not really new but those that continue to persist, that cause shoppers to permanently abandon a site are lack of adequate information; poor navigation ; inability to complete transactions and being automatically driven off a page.

As affiliates, we have a huge stake in what happens on the merchant site, even though we may not have lot of control over these. However, there are things that we could be doing to ensure that we don’t end up paying for inadequacies of the merchant sites.

For example, we can address the lack of inadequate information by providing as much detailed information as possible on our own sites. Or, test out the complete transaction cycle to spot problems with it. Provide feedback to the merchant and see if it will be fixed immediately.

If not, there is not much point in working with such merchants; best to work with those whose websites are really ready to convert visitors into customers always, and particularly during this season.

Considering that it is the leading affiliate network, it was a bit strange that Commission Junction had not rolled out web services to the public until a couple of days ago. The network finally announced the release of web services from beta during a CJU event.

According to the CJ release:

Commission Junction is enabling its clients and third parties to develop their own applications to create unique products or consumer experiences in the CJ Marketplace.

Advertisers can now offer publishers enhanced access to their product catalog data feeds, enabling publishers to present the most up-to-date product information to their visitors in the most desirable manner. In addition, advertisers benefit from the ability to customize affiliate program sign-up and login areas, allowing for the creation of a truly branded experience for the publishers in their affiliate marketing programs.Publisher functionality includes direct access to advertisers’ Product Catalog data in real-time and the ability to perform searches based on keyword, UPC, manufacturer, model number, advertiser, SKU and more.

Carsten Cumbrowski has a detailed post on Revenews (along with posts by others) on this announcement and its implications.

Obviously, web services is a welcome addition for professional, ingenious affiliate marketers who know how to leverage technology for maximum benefit. Small time affiliate publishers will hardly find this very exciting.

There is another possibility that I am intrigued by: will the availability of web services (there have been some developments from LinkShare too in this regard) herald the entry of traditional media houses into affiliate marketing, where they integrate new affiliate-revenue driven marketplaces with their existing media. While the argument that it is an issue with the business model rather than technology that has prevented traditional media houses from leveraging affiliate marketing to a greater extent has merit, I have a strong feeling that the ’seamlessness’ of web services will have a bearing on media houses revisiting the affiliate marketing business model.

The other positive with this announcement, which Carsten points out as well, is that CJ is becoming much more open and proactive with its communication with the affiliate marketing community, particularly after the LMI fiasco. Not only have they recently formed an Advisory Board comprising a few select publishers to work with them, but also created a website, http://webservices.cj.com, to allow members of the community to interact with one another.

These are certainly welcome initiatives from CJ and we welcome them wholeheartedly.

The biggest Internet story of the year is reportedly YouTube, the site for sharing videos. In fact, YouTube leads the list of Top 10 brands in the UK in terms of growth recorded in the Jan-July period of this year, which mainly consists of social neworking sites and image/ video sharing sites.

Considering how popular video content has become, I’d think voice and video content will probably become part of an affiliate marketer’s content mix, sooner rather than later. Of course, both audio and video have been used by several Internet marketers (including affiliates) for quite a while (they are generally an integral part of the ’squeeze page’ sites); however, I have hardly seen them being used by those who operate on a portal model. With affiliates under considerable pressure to differentiate their content from the merchant site, may be this kind of content could change things for the better and be the next wave..

Yet, integrating audio and video content by affiliates definitely has its own challenges. One is the cost of creating the content, though this can partly be justified if it leads to an increase in the number of visitors (ie. lower cost of content per visitor). The second aspect will be the main impediment: the cost of bandwidth. Even while the cost of bandwidth has gone down in recent times, it can still be substantial if the volume of traffic is high. These costs put pressure on an affiliate’s already-thin margins and put question marks on the viability of using such content.

What’s the alternative then? May be, merchants/ affiliate networks can incentivize affiliates by bearing some of the costs of creating new types of content to promote their products and advertisers, respectively? That’s certainly an investment and will require some brave decisions, but if current trends are an indication, the investment will pay itself off pretty soon.

There are two interesting stories today, both posted on Revenews– and they show the different games that merchants and affiliates play.

First up, Wayne Porter writes about a Linkshare affiliate being sued by Land’s End for ‘typosquatting’ — and trying to profit from the misspelling of the merchant’s domain name. As he rightly points out, this is ony the tip of the iceberg. The method may be ingenious (search marketers often use a similar tactic of buying ads on misspelt keywords); but whether it is correct (legally or ethically) is another matter altogether. This particular case touches upon the rather sensitive issue of the use of a merchant’s brand name and marks; when it comes to protecting their brand, merchants are particularly quick to take action (justifiably so). However, techniques such as these undermine affiliate marketing and only serve to create (or increase, depending on how you look at it) mistrust between merchants and affiliates.

On the other end of the spectrum, Connie Berg points out how a merchant may be unfair to its affiliates by selectively promoting another affiliate. The issue is that by promoting a particular affiliate with a special offer on the merchant site, traffic generated by other affiliates could eventually result in commissions for this specially-promoted affiliate. Now, that is bound to put off most affiliates and the merchant can expect to bear some heat (or even lose many of their other affiliates).

Is there something more to this than meets the eye — say, a slightly different revenue model that this merchant feels comfortable enough to promote one affiliate at the risk of alienating other affiliates?

Tesco, which has dominated the UK online grocery market with over 66% market share according to ComScore, is now trying to capture the non-food market as well. The retailer is slated to launch a new non-food shopping website today.
It will be interesting to see how quickly Tesco will be able to capture market share and replicate its dominance of the grocery segment into the new market, though I suspect it may not be too difficult. (We are glad to have Tesco as a prestigious client:) )

Tesco’s dominance is amazing— it’s closest competitors, ASDA and Sainsbury’s have only about 15% market share each. Not surprisingly, its e-tailing success has been written about extensively in the international media, including publications such as BusinessWeek and The Washington Times.

Meanwhile, ASDA is also embarking on an affiliate marketing program with TradeDoubler. According to Netimperative, “ASDA will use the programme to promote the entertainment, floral, contact lenses, gift and photography sections of its existing website, www.asda.co.uk.”

The big supermarkets seem to be getting all set for the X’mas shopping season…

MySpace, Bebo, Facebook– these channels are becoming a part of the marketing mix (at least in thought, if not in action yet), and considering the size of these communities and the traffic they attract, it comes as no surprise. While Google pipped Microsoft to the post by clinching a deal with MySpace, Microsoft is certainly not letting go of what will inevitably grow to be a good marketing channel. It has signed an agreement for the exclusive distribution of banner ads on Facebook, which has a registered user base of over 9 million.

Like affiliate marketing, social network marketing is becoming a separate powerful marketing channel; and again, like affiliate marketing, leveraging these networks may be closely tied to search marketing (though it doesn’t have to be that way). From what we know of the demographics, this avenue is not for all kinds of companies and all kinds of products. For example, music, DVDs, iPODs, student loans - most likely yes; mortgages, grocery– most likely, not.

I think venues such as MySpace and Facebook provide a nice platform for individual affiliate publishers to drive traffic/ sales. However, as things are today, these may not be as effective a channel for the larger affiliate publishers (companies) — in terms of scale and costs. But it is certainly something we cannot be completely detached from, because I suspect a sustainable and scalable model for large affiliates to emerge sooner rather than later.