Monday, August 22, 2011

Affiliate Summit East: How to Stand Out in a Crowded Market

I spent several hours this morning at the Affiliate Summit East in New York. This is a corner of the direct marketing industry I haven't examined in depth although it overlaps with lead generation, online advertising, and performance measurement segments I know well. The exhibit hall was enticingly crammed with unfamiliar vendors, although I saw enough to identify a few general categories: offer aggregators who bring together products for affiliates to sell; network providers who assemble audiences for affiliates to sell to; and technology providers to support both groups.

Swimming through the aisles were the affiliate marketers themselves – people who make their living by selling other companies’ products in return for a share of the revenue. They are the main audience for the show and, thus, of the speakers. I heard two presentations: a keynote by Wil Reynolds of SEER Interactive and a session on starting an affiliate business by Nicholas Reese of Microbrand Media. Both shared the somewhat disconcerting theme that affiliate marketers shouldn’t build traffic with shady techniques – something each speaker admitted, with the fervor of a repentant sinner, he had done in their early days. Each also offered ethical alternatives for creating a sound business.

Reynolds offered nuts-and-bolts advice, including ways to gain new links, create more appealing search results, and attract social traffic. He also offered recommendations for using a slew of free or low-cost tools, including:

-, which analyzes your Twitter followers
- Rapportive, which assembles profiles on contacts
- SEOmoz, which offers a package of features including lists of people who link to you
- Row Feeder, which reports search results against Twitter and Facebook
- Speechpad, a $1 per minute voice-to-text transcription service
- Promedia Suggester, which suggests search advertising keywords and topics

Reese worked at a more strategic level, offering advice on how to identify a promising affiliate business opportunity and then how to develop it. He made an intriguing distinction between problems solved with the customer's money (good opportunities) and problems solved with the customer’s time (not so good, because it’s harder to generate transaction that will yield a commission). He also suggested careful consideration of customers' knowledge (enough to recognize the problem exists, but not so much that they already know how to solve it). And he also listed churn rate as a key factor – he didn’t elaborate on that one, but I assume his point was you want customers who’ll stick around enough to generate repeat business.

For building a business, Reese argued that email is still king because it’s much harder to ignore than social media. He also urged marketers to build unique strategic relationships with companies that don’t have standard affiliate programs, since those relationships have higher profit potential than a program that’s already open to others.

That last point is important: with so many vendors providing packages of products to sell and of audiences to reach, it’s easier to start an affiliate business but harder to offer anything unique. Skillful content generation and traffic building may still be enough to build a profitable business, but I suspect that large-scale success requires something everyone else can't buy off the shelf. This might be an actual product, marketing technology, or business method. Affiliate marketers or suppliers who can create these will probably be the big winners in the long run.

No comments: