frontpage companies industry economy technology markets commodity politics world editorial opinion cartoon
forex rates
sensex 
movement
| APR 07 - APR 12 1999 |
|
Lyndon Cerejo Can you have selling agents in Cyberia? Of course you can, and they exist in other markets. They make a near-ideal salesforce, working on commission, 24 hours a day, seven days a week. The companies/merchants using their services pay them handsomely, going all the way up to 25 per cent on every sale. But that�s worth it since it�s much lower than maintaining one�s own wide-spanning sales setup; and payments are only made on sales generated. That, in short, is what affiliate programmes on the Internet are all about. Jupiter Communications defines an affiliate programme as a relationship between an online merchant (the parent) and another web site (the affiliate) in which the merchant pays the affiliate a commission for each sale generated. The Amazon Associates Program is by far the most popular affiliate programme today. Amazon.com had over 2,00,000 affiliates at the end of 1998�up more than 600 per cent from 28,000 at the end of 1997. And a quick look at associateprograms.com shows a healthy list of products and services offering affiliate programmes�from office supplies to condoms, and from gambling to taxes! Now, with hundreds of companies eyeing the Indian e-commerce pie, it�s just a matter of time before affiliate programmes are launched here and become the hot new web marketing vehicle in Indian Cyberia. Like a coin, an affiliate program has two sides to it: the merchant and the affiliate. The merchants who set up the affiliate programmes (also known as associate programmes, or revenue-sharing programmes) have one goal in mind: to draw more traffic, that would translate into more purchases. The merchant gets thousands of points of sale with hardly any effort, and at a very low cost. For the affiliate site, on the other hand, the programme is an excellent opportunity to value-add to what it already offers its visitors. Without incurring the costs involved in setting up an e-commerce site and the logistical headaches, the affiliate has a wide range of products and services that he can effortlessly offer on his website. While the affiliate earns revenue on every transaction that originates from his site, a lot of effort is involved in increasing his site visitor�s propensity to buy, before the resulting commissions form a substantial source of income. While the scales may appear tilted in favour of the merchant offering the programme, most e-tailers aren�t smiling as yet. E-commerce sites pass on most of their margins to the customer in the form of discounts and offers to give him an additional reason to shop online. And when that sale takes place through an affiliate, they have to part with an additional percentage, often coughing up part of that amount from their own coffers. But then again, no e-tailer is looking at short-term profits, and considers the losses as the cost of customer acquisition. Since many affiliate programmes are automated and open to all and sundry, anyone with a homepage can sign up as an affiliate. In fact, free homepage services like Geocities, Tripod and Xoom already have affiliate programmes in place for millions of users who have created homepages on their services. However, the lure of earning money by adding a simple link on their webpages is enough to blind webmasters who often sign up for affiliate programmes by the dozen. The result, needless to say, is an eyesore. Their pages become nothing by cyber-hoardings that people surf past without a second glance. Every affiliate who does a Tom Cruise ``Show me the money�� act as in Jerry McGuire, needs to check if he�s done his homework first: Traffic: A site needs to command certain levels of traffic before the webmaster can start dreaming about money. Since the number of people who click on banner ads online is pathetically low, the more the traffic, the greater the chances of a transaction taking place. Yahoo!, among the most trafficked sites on the Internet, is an affiliate of Amazon.com. For every search result it throws up, it shows the user related books that can be bought from Amazon.com. Even if a very small fraction of those result in purchases, Yahoo! is earning extra dollars effortlessly. Relevance: The products and services offered by affiliates should be synergistic with their site�s theme. A site dedicated to cooking would attract visitors interested in cooking, and would earn little or no revenue if it enrolled as an affiliate for a computer bookstore. However, if it offered cookery books for sale, those cheques would be bigger and more frequent. Rob�s House of Snakes (http://www.iswd.com/snakes/books.htm) is a good example of webpages that cater to niche audiences. Rob Brown built this website to showcase what he believes are some of the most fascinating animals to keeps as pets�snakes. People who are genuinely interested in snakes can just click on any book from the selection of pre-selected titles to buy them, and Brown collects the commission on them. Target audience: Sign up as affiliates for products/services that are of interest and within the reach of the visitor to your site. A site with an Indian user base would not benefit by offering books and music from Amazon.com, since payments are required in international dollar cards. Push: A generic ad banner linked to a merchant�s site is just another ad banner. Instead, a simple search feature goes a step further, allowing the user to search for a particular product from the affiliate�s page itself and gets better results. However, offering select products (like the Top 10 books), gives the visitor a firm offer, increasing the propensity to buy. Update: Just as content on a website needs to be regularly updated to keep visitors coming back, affiliate offers need to be regularly changed to offer the visitor something new to buy each time he visits the site. The writer is an Internet Strategist |
    |
|
