Why I’m at Affiliate Summit 2007

by Brian Smith, on January 22nd, 2007

Guess I should explain what I’m doing here…

I managed my first affiliate program back in 1999 for VarstiyBooks.com. During the bust, with my SEO and PPC knowledge in tow, I became a super-affiliate for a number of merchants. For a brief time in 2005, I unsuccessfully managed the Logoworks affiliate program.

I love affiliate marketing, because, as Michael Sanchez, CEO of ClubMom just explained, it’s all about performance marketing. Now anyone can back out a CPA or rev share number from a cost per click (CPC) campaign so you could argue that what the majority of the shopping engines are doing, charging merchants on a CPC basis, is fine. However, you quickly run into issues with merchants absolutely hating the shopping search engines because of low conversion rates. Merchants start whittling down their product list or more likely, merchants just give up on the channel (somewhat easy decision when Google Adwords is a much easier marketing channel to manage and can drive more volume).

Well, in this environment, it makes sense that you have Shopping.com testing out a revenue share system. It makes sense that Jellyfish is positioning itself as a cost per action (check out Wingo’s post and associated comments regarding Jellyfish and Shopzilla) network.

I’m definitely not saying that the shopping engines are going to change their revenue model overnight (and they can’t with big corporate parents depending on healthy revenue and profit), but there’s gotta be a lot of pressure. You have the CPA/RevShare model on one side and more comprehensive free shopping search on the other (ShopWiki, TheFind, etc.). Sure, Shopzilla is laughing all the way to the bank right now, but I’m confident their model will evolve considerably over the next 24 months.

So why am I here? Well, Shawn and Missy invited me (thanks!), but more to the point, the CPA/RevShare model is a powerful force in ecommerce and marketers love it. I was sitting next to a large multi-channel (stores, online, catalogs) marketing company in the keynote and spoke to him a little about his online marketing programs. Shopping comparison engines definitely is not the most beloved program he’s running. When your customers are not happy with your product – and there’s definitely a lot of tough love towards the shopping engines – there’s a great opportunity for someone else to innovate.

Tags: Comparison Engines


djc said

Thanks for the love Brian. We (TheFind) are definately excited to see how the CSE landscape changes this year, and hope to be part of that change. – Dave

January 23rd, 2007 at 10:35 am |

Sushant Ajmani said

Brian, CPA/Rev Share model works perfectly for Affiliate Marketing and it’s been going on for past so many years but; the interesting thing in case of CSEs would be the success factors. I mean, what scenarios would you consider as a part of action?

The Rev SHaring model is totally based on trust and on top of that; it would be beneficial for both the parties if they generate good amount of traffic and sales for each other.

I think, CSEs would have to follow some interim path and come up with a customized CPA Model.

January 23rd, 2007 at 3:41 pm |

jeffmol said

Let’s not forget that the entire CSE industry was founded on CPA. Wouldn’t it be ironic if the industry found itself back on a pure CPA model?

IMO, this is not likely. What IS likely is the migration to a mixed CPC and CPA model.

January 24th, 2007 at 12:11 pm |