Google's Merchant Search - killing insurance, loan and credit card comparison affiliate sites

Marketing Fan — Sun, 01 Jun 2008 15:47:23 +0200

Now this new merchant search feature by Google is going to scare the hell out of a LOT of people, including several of my own clients.

According to insiderview they are trialling this for secured loans only (in the UK only) but will target more financial services like loans, credit cards and insurance are highly competitive.

Again they are (ab)using their search portal for placing #1 spots to their own inhouse products as you can see here

and while the resulting comparison page has the charme of a 1997 website, they will probably send a TON of traffic to the best priced merchants…

of course if you are that dominant in traffic and have tenfolds of traffic that other sites might aquire you can save the conversion rate optimization for later I assume

Now that google is selling links, vacations and even loans – what’s left and next? a freelance coder service portal?

PS: I’m off to Seattle for the SMX now.

Affiliate Marketing: Easy Money?

Marketing Fan — Thu, 09 Feb 2006 12:12:48 +0100

Is Affiliate Marketing the way to Easy Money?

Web merchants are always looking for good ways to market their products. The best marketing tool right now is high placement on Google with a heavily-searched term. But secondary yet most imporant to that is marketing to customers who are interested in their products on other websites; this is the core of affiliate marketing.

For instance, if you were a seller of discount vitamins and dietary supplements, your website would be perfect for selling diet books or books about natural cures and herbs. But what incentive do you have for selling someone else's products? You would rather have all your customer's money, not take the chance that they'll spend their small budget for your website on someone else's product.

Amazon.com was the first major online business to see the possibilities in this sort of marketing, and they pioneered online affiliate marketing to take advantage of it. Instead of hoping people would come to their website instead of just going down to the bookstore or visiting the new sites Barnes and Noble and Booksamillion put up to compete, they instituted a profit-sharing program.

If you became an affiliate marketer and sold books of your choice from your website, Amazon agreed to give you 15% of the book's selling price.

This had an enormous impact on the small online marketplace back in 1997 and 1998, when they started doing it. Today, affiliate sales are a normal and expected part of doing business online; in fact, many web businesses depend on it.

Affilate Marketing Today

Affiliate marketing today may reward host sites for selling products, or they may reward hosts for sending visitors to the selling site (a practice similar to the custom of finder's fees).

In the broadest sense, much online advertising is affiliate marketing, with compensation or commission paid to the host site for visits (pay per click), for registrants (pay per lead), or sales (pay per sale). It's a win-win; the host gets money he or she would otherwise not have gotten for plugging the same product, while the merchant doesn't have to pay for otherwise free advertising unless there's an actual sale from it.

Besides the famous Amazon affiliate program, third-party intermediary affiliates include ShareASale , Commission Junction, ClickBank , and LinkShare.

Profit Margins from Sex to Books

As you might expect, there are wide variations between the profit affiliates bring in depending on the industry. Sex, as always, drives the Internet; without online porn, many visual and digital technologies may never have been invented, and many of the cutting-edge online technologies and techniques are driven by the needs of pornography sites.

It's not surprising, therefore, to find that pornography sites have long provided the highest profit margin in affiliate sales. Most sites making money from this operate a gateway site with their own free images. They make money by selling subscriptions to other, pay sites, and by running pay-per-impression advertising. Gambling sites also tend to pay out generous affiliate commissions for signups.

The best profits aren't necessarily going to come from those affiliate partners with the highest percentage payout, however. Instead, they'll come from the affiliate programs you can best sell on your website. You can't do much with gambling or sex if you have a website on the language of flowers, but you'll probably sell romance novels and flowers pretty well. Your hardcore sex site will probably do gangbusters as a pornography affiliate.

There are few studies online that talk about how profit margins work on affiliate sales, and most of these work through hearsay. But if you check out http://www.affiliateguide.com/, you can find hundreds of sites that do affiliate sales and a short description of each. The highest paying commission for any website as of this moment is a gambling site that pays 50% for each signup.

A Critical Issue: Tracking Your Sales

If your affiliate sales partners don't know you're the referring site for a new customer, they won't pay you a commission. That's the core of the next problem: how do you track your referrals? There are some complex methods for doing this using session cookies, which are often blocked by spyware and adware. But by using older technologies that predate cookies, you can circumvent this problem.

In most cases, click tracking is based on information stored in your web logs, the data that tells you how much traffic you're getting along with other useful data. If you have it set up properly, one line in web logs gives the referring URL for people visiting your site.

But how do you know that the site you're affiliated to is crediting your referrals properly? It's harder to track from your site than it is from the site you sent traffic to, but you can still do it by installing a script in your cgi-bin; you can find details here: http://www.webtechniques.com/archives/1998/05/perl/.

Once you know how many referrals you sent a site, your analysis of click-through sales becomes intuitive. You don't know how many sales have been completed, just the number of people who have visited the other site from yours. It takes time and tracking, but by comparing data from different affiliates, you can target the ones with lower sales per click-through ratios. If you're suspicious of sales being credited improperly, you can always make a small purchase yourself using your affiliate banner and see whether you are credited for that sale.

If you are being cheated, you have little recourse but to drop that affiliate program, though you can also do a Google search for the banner (using the lines of code specific to the site URL) and notify other webmasters that they should look into their own sales – NEVER accuse, only let them know they should check.. This is tedious, but you may find it worth it.

One-tier Affiliate Programs , two-tiered or even Multi-tiered ?

Many Affiliate programs also come in tiered marketing programs, where if you recruit affiliate marketers to refer sales, you receive your own affiliate sales commissions plus a smaller percentage of your recruit's.

This is potentially very lucrative. If you do get involved with affiliate sales of this sort, you should obviously get in at the lowest tier possible. That means it's actually Multi-level marketing (MLM) which has a bad taste for many - but not necessarly a bad thing for affiliate programs.

The big payment processor PayPal recently even refused to issue payments for affiliate programs that have a multi-tiered marketing structure.

Is it better to get involved in a multi-tier scheme? That's all dependent upon the product you're selling. In fact, the most important consideration in affiliate marketing is whether you are affiliated with products compatible to your web site.

In a small niche market, it can even be detrimental to get involved in a multitier affiliate marketing program. The more people who are referring, the fewer referrals who are likely to come from your site. In large markets, it doesn’t matter so much.

Conclusion

Marketing Affiliate Programs is everything but easy money! But if you are able to combine a multitude of talents from technical, design and business perspectives it can sure pay off... but remember... things that 100,000 others do won't work your you , just like for 99,990 others as well - so find your niche affiliate program !