So your business is in need of a boost in traffic. A common remedy for that is to pair yourself with an Affiliate company (aka: Internet Marketing) who will build a program for you. These companies have large networks of affiliates who will sign up to sell your product/service, for a price. Typically you pay the affiliates a % of every sale they generate. But there are a myriad of ways you can pay them, and your Affiliate Marketing company can present that to you.
The upside of working with an Affiliate company is that they will bring you a lot of affiliates from their established networks. These affiliates will work on your companies behalf, to push sales to your site.
The downside of the Affiliate networks is there is no guarantee that they will bring you affiliates or sales. Also, there is no SEO benefit from the affiliates they do obtain for you. Because unfortunately these sites were developed, years ago, focused on generating traffic and revenue. But none have yet to morph to the new way of the internet, which is everyone needs great SEO to compete. And the biggest component of SEO is having a lot of inbound links (i.e.- backlinks) pointing to your web site. So these networks filter all of the traffic from the affiliates they sign up for you through their site. They say they do this for accurate “tracking” purposes, but the reality is they just have not adjusted their models to what would be most useful today.
For that reason, I highly suggest that any web site that needs an affliate program should definitely have their own “home grown” program as well. A program where you can setup affiliates on your own and get them linking directly to your site.
But if you do decide to outsource. How do you decide which Affiliate Marketing company to use?
The big players in this space are Commission Junction (commonly known as CJ.com), Linkshare and Performics (which is under the DoubleClick umbrella). Here’s a breakdown of each:
1. Linkshare - Probably the top recommended solution. But also the most expensive of the 3 companies. Linkshare has the most name brand internet sites (Cingular, JCrew, Match.com, Netflix, Orbitz & Wal Mart) using their service. So that right away tells you they are doing something right. But their real value is that they will let “own” the affiliates you sign up through their network. Meaning, they reveal the names of the affiliates and their contact information. And they don’t prohibit you from working with those affiliates, if you ever leave Linkshare. The other guys hide the pertinent information about which affiliates are pointing to you, and restrict you from working with “their” affiliates for 6 months after the engagement ends. So this is the biggest benefit of working with Linkshare, that when you are ready to part from them - you can take your best performing affiliates with you. Personally, I think that shows that they are confident enough in their services that you won’t want to leave.
The downside of Linkshare is their cost. They charge (all figures are approximate) $5000 upfront. Then they charge a $4000-$6000 per month fee, if you use their “managed services”. Their managed services basically mean that you have a dedicated account representative who does all of the work setting up and maintaining your affiliate program. They do offer a non-managed service for around $1000 per month. In either deal they also take 3% in commission from each sale they generate for you. So you are paying a big upfront fee, a high monthly fee AND a commission on each sale they generate for you. It’s a lot of dough, so make sure you really do need the kind of value they provide.
Linkshare has been around since 1996. And they’ve got offices in the USA, Canada, UK and Japan.
2. Commission Junction - They are a close 2nd to Linkshare. But they mask affiliate info from you, and restrict you from partnering with affiliates on their network after you leave CJ. They also charge A LOT higher commission on sales than the other two. CJ takes 30% of the total sale. So if you agree to pay one of their affiliates 10% of any sale they bring to you. And said affiliate makes you a $100.00 sale. You’ve got to pay that affiliate $10.00 and then pay CJ $3.00. So it’s a pricey commission. They do have the lowest upfront fee ($2250). And their managed fee is $5000 per month. Although they push their non-managed service, which is free, very hard. Both other companies charge for their non-managed service.
CJ boasts a client list that includes Adobe, Ebay, LendingTree and Staples. They’ve been around since 1998. They have offices in the US, Europe, Asia and Australia.
3. Performics - They are good company and offered as part of the DoubleClick suite of services. But their network of affiliates is significantly smaller than the other two companies. Their affiliates are mostly geared towards retail sites. They are also pretty cloak and dagger about their product offerings. Meaning, you can’t get all the details of what they can provide unless you sign an NDA with them. How’s that for a service company?
Performics charges $2500 upfront. And they take 1/3, on top of, whatever amount you are paying their affiliate. But their monthly charge of $2500 is a minimum. Which is unlike the other two, that charge flat fees for their service.
The boast a client list that includes Barnes & Nobles and Circuit City.
There are some other small players (LeadPile, AffiliatePrograms.com, RevenueLoop) in this space, but none that I’ve found to have any advantages over the big 3.
So when you get ready to make the plunge and sign on an Affiliate Marketing Company to aide your business. You should definitely talk to the big 3 above. Although make sure you do invest in your own Affiliate Program before spending the money to outsource. Doing both is fine, but only outsourcing will never get you fully in the internet game.
[Update to this post: Since I wrote this I discovered a new company called Kowabunga which I believe to be the best affiliate marketing company. The reason? Simple, they are able to provide you with direct links to your site, unlike the other 3 guys above. This added feature gives you an important SEO benefit that is so worth having. Kowabunga is a bit pricey at $5K per month for their full managed service. And their network is smaller than the other players above. But I believe they might be the best company IF you are looking for revenue stream and natural SEO assistance.]
