Case Study: Habitat

This month Habitat, Inc. is rolling out its online affiliate program to target niche markets. In order to better understand how to roll out an affiliate network, we're going inside the program to show you the decisions that have been made to maximize the value of this affiliate network.

Habitat, Inc. has a catalog of over 300 items which we broke down into specific categories of special interest based on the following research. They offered affiliates the ability to link directly to the home page, or to a specific entry page based on their Web Sites special interest.

Click here for discounts and savings...
Habitat clothing, mugs, stationery and t-shirts

By following the process here, you will understand a simple, direct way to test your affiliate network online. Habitat, Inc. offers nature related apparel, with hand painted artwork. In order to further the reach of this company, they had to define the target sites to affiliate with. We begin with the keywords.

Keywords

The first job of targeting your affiliates is to determine those words, those categories, of business that apply to this particular market. Habitat, Inc. has a wide selection of apparel with retailers primarily located in outdoor recreation areas of the United States like Maine and Wyoming.

The goal is to take a natural selection of keywords, look for who is offering similar products, and where their customers are going to fulfill their interests. Here's what we began with:

The next step was to go to the search engines and look for these keywords. The goal was to find the leading directories of outdoor-related interests, products, and services that could lead us to the best sites. Finally, we went to ezine lists and Web Sites that rate the amount of traffic a site gets (http://www.hitbox.com, http://www.top100.com). Frankly most of the sites measuring traffic did not give an accurate picture of the Internet; only those who ranked their sites at these directories were registered. Many people don't know about them. But the results were fascinating.

The goal was to find sites with a good following (at least 5,000 visitors a month) and a subject people were passionate about. What we found was far greater than what we were initially looking for.

Yahoo

Yahoo is excellent for breaking down your keywords into categories; as we clicked through the lists for outdoors, for example, we came to a huge listing of sub-directories. Part of the problem with Yahoo is that it is like the Chinese box within a box problem; you keep clicking and never seem to get anywhere.

But once we got to outdoors, we found listings of all the type of activities people engage in. There was hiking, fishing, national parks, and a whole bunch of others. Next to the directories is a number in parentheses, indicating how many listings are housed within. For hiking, there were only about 30 or so. For fishing, there were much, much more. Common sense showed that fishing was a prime interest online, which it is.

We went to the sites, identified Subject Matter Experts (SMEs), ie people who knew what they were talking about with Web Sites that had high traffic, and invited them to join our affiliate network. Going to a trusted resource for a highly trafficked item is an excellent way to begin.

In order for this to succeed, we personally evaluated each Web Site for content, credibility, traffic, and agreed to contact them after evaluating their site. Our inquiry message included references to their site we liked, to show them it wasn't a cold call. We had done our homework to carefully select those we wanted to work with. No one opposed this approach, because it was highly selective, and personalized. Most of all, it was an invitation.

Excite

Excite shares interesting results because it lists associated keywords with the search you went to. This actually helped narrow the focus of our affiliate search. We also looked for those sites who bought banner advertising subject to the keywords we put in. If the banner ad had nothing to do with the search phrase, we assumed that this keyword had little advertising, ie dead advertising space.

Excite was a good resource to help move beyond the initial phrasing of our keywords, but we were not able to find that many good sites with it.

Infoseek

Infoseek takes an approach that can benefit your affiliate network. They rank sites subject to the number of links that site has to it. While this may not yield a totally accurate picture, it does give you good reason to contact the top listed sites.

One interesting fact; we searched on the phrase "wolves" and found little related advertising. This important niche was later identified to approach Infoseek for a commission banner program.

The results of our search engine work were a number of directories that covered an important interest people had online. We identified the market as outdoors and environmentally related sites, with passionate interests and communities developed around preserving the natural environment. For example, a site called The Web directory (http://www.webdirectory.com) has many outdoor related sites. Specific hobbies like fishing and skiing were highly visited, although skiing did not really fit in with our current goals for Habitat.

Ezines were also a poor resource because we couldn't find any related to these specific topics. There were many mailing lists and newsgroups, but none were really commercially minded and it did not seem to be an appropriate way to reach these groups.

Competition

Apparel is still an open market online. Only a few major retailers like Lands End and Eddie Bauer were found, whose sites were not integrally linked to any of the high traffic Web Sites we found. These sites act as a destination point, as if you can only buy within their store.

They left the entire apparel market open online to a wise company who would position itself within selected target markets and empower the trust the Web Site owner had with their audience. It is funny how many of the big companies will spend money on print and banner ads, but will never think to go to the sites where their audience is currently meeting.

Since apparel can be sold via a catalog and is one of the best sellers on AOL during last year's Christmas season, it is a good test for Habitat to get their feet wet online.

Targeted Affiliates and Strategic Portal Sites

From the search engine results, as well as research via the leading directories, newsgroups, and mailing lists, we nailed down the following categories of Web Sites as being good, target affiliates:

Outdoors
Fishing
Wolves
Sharks
Dolphins
Puppies and Pets
Environment
Non-Profits

We targeted the top trafficked sites and contacted them personally. Initially we contacted first by an email inquiry after researching their site; this proved effective for small Internet efforts. But to get into the doors of the bigger portal players, such as large non-profits and sites with more than 5 employees, we had to pick up the phone and call them.

For the larger portal Web Sites we targeted as fitting for our program, email was an ineffective way to make contact. It is amazing how few businesses respond to email inquiries of any kind. To email a larger business is like throwing away a lead into a black hole. The phone is still the most effective tool and our inquiries were handled quickly and directly.

Most companies favored us contacting them by phone because their Internet email boxes were stuffed with so much business info and bulk email, they barely had enough time to sift through it all. This lesson led to many critical relationships being formed.

The non-profits were particularly noticeable; how many non-profits do you know of that are dedicated to protecting the environment? Many had affiliate type programs already, and in their own terms "cause related marketing" is an important part of fund raising. We contacted non-profits to offer them an ongoing source of donations that would go beyond the one shot donations they were use to.

Many of the non-profits were open to the idea; it was a good way to test their efforts and donate to a worthy cause, which is part of Habitat's mission anyway. Talk about a great way to mix philanthropic efforts with affiliate networks; non-profits are an untapped and needy source of leads and sales.

One of the most amazing discoveries we had was the tremendous market for pets online. Almost anything related to dogs and cats has a huge following; one site had over half a million visitors a month, while another had a million actual visits per year. These are so micro-targeted that you would need to have specific breeds of animals to really offer products here.

Exotic animals and wildlife appeared to be better fits for Habitat, although some general information sites about pets definitely fit the bill. In fact, many of the owners contacted us to extend their thanks. They had tons of traffic, but no ability to sell advertising on a month to month basis.

The Internet is full of dead advertising space; your affiliate network can really take advantage of this.

Promotion

We have created a series of banner ads for people to post at their Web Sites and given them suggestions of how to optimize their profits by strategic placement of banner ads, personal recommendations, and direct emails to their opt-in lists.

AdNet International (http://www.adnetintl.com) was also able to use its close relationship to the search engines to test out banner advertising at Infoseek. By testing a commission banner approach for keywords that were not being purchased by traditional advertisers, the ability to penetrate and test a market was created.

NOTE: One of the amazing things we found is that sharks was searched for ten times as much as dolphins. Wolves was another heavily searched for term.

We have also set up specific entry pages to the Habitat catalog via our application form; you can fill in the application and choose a specific interest for your Web Site (for example, you can choose a wolf-related entry page, a fishing-related entry page, or a general page to drive people to the home page of the catalog).

By doing a bit of footwork, we spent about a week identifying sites and another week signing them up. Now it is part of our ongoing marketing and development to insure that these sites get the materials they need. We will track the results as well during the Christmas season, a top one for apparel makers.