Beyond Amazon:
Quick, Revenue Branding Via Affiliates

"People seem to notice when you're everywhere. So dow do you get there? Instead of worrying about how to drive people to your website, find creative ways to be on everyone else's. Provide a service that makes their websites far more useful, and they won't be able to live without you."

Hewlett Packard E-Services Copy, Wired

IN THIS ISSUE

1. The New Affiliate Metric:
   What's Your Contextual Conversion Ratio (CCR)?

2. The Five Types of Internet Shoppers

3. Contextual Conversion Ratio (CCR) Case Study: Less Traffic, More Qualified Leads: The WipeOut CD Repair Kit

4. The Three Key Partners In Affiliate Programs
   Partners Drive the Rapid Growth of this Network

5. Conclusion: Why Buy Ads When You Can Profit With Performance?

Dear Friend,

Making sales on the Internet is no mystery. You get customers to visit your Web Site. You get them to buy. That's what all the experts selling Internet stocks say...

Then why do an estimated 60% of online purchases go unfulfilled? Because most e-commerce makes it difficult, if not impossible, to close the deal. Reinvent online merchandising through quick, strategic positioning using affiliate programs on the Internet that:

• Decreases advertising costs by 60% and more.

• Converts Existing Banner Ad Dollars to Performance Driven Results

• Increases ROI with advertising paid by performance.

• Generates higher SellThrough and Clickthrough ratios.

• Extends the reach and retention of your customer base.

• Develops automated, opt-in email lists that you can easily grow.

• Auto-merchandises Web sites almost instantly.

• Delivers product without holding inventory.

• Powers sales with keystone margins and quick testing cycles.

• Creates buying customers with a breakthrough affiliate, e-commerce system.

Cut Customer Acquisition Costs. Increase E-Commerce Sales. Guaranteed...Always. Here's how to do it...

The New Affiliate Metric:
What's Your Contextual Conversion Ratio (CCR)?

In the early days of the Internet, people talked about hits. Millions of hits were all they bragged about. Then they figured out traffic metrics like Clickthrough and Impressions as a means of measurement.

The new metric is your Contextual Conversion Ratio, the ratio of visitors to buyers converted when the content of the Web Site is matched precisely with the right products to buy.

Few if any sites really consider the context of their web site when selecting products; if you look up the word context in Microsoft Word, you get the following suggestion:

Context = Necessary Link

Selecting any product to offer through your Web Site requires the matching process to begin; what are your customers at your Web Site looking for, and what can you offer them? You need to create the necessary link, the products that match their defined needs.

We are testing a process that should dramatically increase conversion ratios; by matching products to the content of your Web Site, your Contextual Conversion Ratio (the ratio of visitors converted to buyers within the context of your Web Site matching products to content) should be higher than industry averages.

In the next five minutes, I am going to show you how to do this. To take advantage, you have to be willing to suspend your disbelief and begin concentrating on your Contextual Conversion Ratio (CCR) using the latest, most powerful tool at your disposal, the content of your affiliate's Web Site.

The new move in affiliate programs is to focus more on weaving your offer into their Web Site, than worrying how to generate traffic from their Web Site to your affiliate program.

Here are three rules to follow:

Rule 1. Match Products to Your Content

It seems simple to match products to your content, but remember that niche, targeted products should be mixed in with general product lines. For example, books and magazines, along with credit cards, are products that can fit within any Web Site. Because of the general nature of these items, the Contextual Conversion Rate is tricky; are you matching the latest books for your content, or are you simply providing a link and forcing the visitor to find what they are looking for?

The best way to match products to your content is to look around the Internet, and the real world, for examples of what your customers are buying. If you are selling computers, go to CNET and see their top picks. If you are selling books, go to Amazon and see their best sellers. If you want to hear what your customers want, go to http://www.deja.com and enter in some keywords to find discussion groups for your subject. Many times, they will be talking about products they want.

The key is to use the Internet as a communication tool with your customers, and to match the specific products to their interests. Avoid plugging in products just because you can, and because it broadens the number of products you offer.

Be focused, be specific, and be careful not to diminish the value of your offer by selling ad space to anyone who wants to buy a banner. Once again, the context of your site is negatively affected by banner ads; your click rates go down, people understand that space as commercials, and it may undermine what you are trying to do.

Here are some suggestions on matching products to content via your affiliate program:

1. Make sure that your affiliates understand how important it is to make the "Right Offer to the Right List". Teach them the best ways to market your affiliate products, including specific suggestions of where to best place the ads on their site. If you rely on them, you can forget your Contextual Conversion Ratio.

2. Don't rely on the easiest solution. For example, if your affiliate program offers computers, show your affiliates how to weave in offers for accessories like toner cartridges, cleaning kits, extra Zip disks, etc. Accessories have higher margins and can make much more than the 5% you get for selling hardware. Show your affiliates how to mix in the best products to maximize sales through your affiliate channel.

3. Target specific types of content for your product line and in your approach to affiliates via email and telemarketing; show them how to match your products to their content. Once again, if you are selling computers, find how to content sites for Windows, computer repair, and computer advice. Show them how to mix accessories into their offer to increase the overall sale and hopefully increase their margins.

   Try to be specific, matching the right products that fit within the categories of interest of your target visitors. If you take this rule to heart, you can ask yourself, why is this product important to my visitors? If you can't answer that in one, real sentence, it's likely they will not either. And you will decrease your conversion ratio, because you have ignored the context of selling...the matching of products to their expressed wants.

Rule 2. The Power of the Right Hand Box

When people read a Web Site, they begin on the left. By using the right hand side of the screen to place related products, as well as the beginning and end of your Web Page, you increase the chances of a viewer noticing the products within the context of your content. Put the products where they are looking.

One of the most important Web Site activity centers is the right hand side of your computer screen. Be sure to put relevant products in a nice, right hand column, highlighted from the rest of the Web Page in either a different color, or with a line that separates this from the content of the Web Page. Here is where you can mix in 2-3 products on a single screen. The reason the right hand column works so well is that the mouse, like the reader's eye, goes from left to right (at least in English speaking countries). Their mouse often glides to the right, with the lower right hand corner of your screen being one of the best places to get them to act, and click.

Customized Merchandising

You will read about the emerging personalization and customization tools being used by the big companies. The ultimate personalization is merchandise customized for a specific audience. Make sure that your matching of products to your content delivers a customized merchandising solution. Instead of asking them endless questions, see which products draw the most clicks, and the highest sellthrough. Personalization matches products to their expressed wants; when they are reading content at your site, you know what they want. It is up to you to match this with the right products.

By targeting affiliates with the right content, you will find the right matches. Don't forget opt-in email lists as well; they are some of the best-targeted content on the Internet. You need to research where the best context for your affiliate program lies, and get your products there.

In conclusion, remember that to increase your conversion ratio, you have to think of the context of your affiliate's Web Site, and why people are there:

1. Are they there as shoppers, such as a classified ad site, or are they there as viewers, as in a magazine? People who want to buy are more desirable than people simply there for free information.

2. Do you decide which products would best fit the content of each site, and do you change these regularly as the needs of your visitors change? Do you change products subject to season, or to what is drawing best?

3. If people are at your affiliate's site strictly for free stuff, you are probably in trouble. It costs as much to give away things as to charge for them. The free on the Internet Schick does not generate revenue in most cases. It is often an outmoded way of approaching the Internet audience. If they are interested in buying products, they will spend money for the best. Beware of playing the price game.

Visitors come to your affiliate's site for a specific reason. If it is just to shop, you have less than 3 minutes to interest them, if that. If they come to read, you may get longer visits, but they may be interested more in your content, and less in products. That is where you begin to weave products into the context of your site. Include a specific product with a specific article, and put links on the top and the bottom of the page. Allow the content to standalone, uninterrupted, because people forget the middle, and remember the beginning and the end.

I look forward to hearing how your Contextual Conversion Ratio is doing...

Go to the Top of the Page

The Five Types of Internet Shoppers

Shoppers come in different types on the Internet. Your affiliate creative and ad copy must address their specific needs, and their interest levels.

For example, studies at CD sites shows that 18-21 year old customers want to have the product offer and the order right there. They don't want to click through a bunch of buttons to order they want instant gratification.

Yet at the same site, people who are over 40 and less computer-savvy appreciate having the sales process delivered in steps. Step 1 is filling in the information, Step 2 is credit card information, and Step 3 is closure and confirmation. This site has to create sales strategies for two different types of customers by matching their product offer to the context of the shopper's experience.

Remember that the shopper's experience of your affiliate program is part of your brand. That is what they remember. In order to improve the results from your affiliate program, be aware of the type of shoppers you are targeting. Understand what they like and tailor your offers for the variety of customers.

After all, the Internet is built on niche markets, which have different tastes. Your affiliate advertising should reflect these differences.

First, let's look at the types of typical customers.

Type 1. Expert

The expert knows what they want and will make a decision quickly. Experts are Internet savvy and expect to be given what they want quickly. These are often known as "early adopters", or people who have been on the Internet for a while. A majority of surfers consider themselves experts and find that the usual, shopping cart driven, "Great big piles of products" approach to be stupid. Sell them one thing and get them there in two clicks.

Give the expert a specific offer, clearly outlined in short, succinct language. Focus on your headline and first sentence, and don't make your copy too long. They will buy if the price and the appeal are right.

Type 2. Specialist

Specialists buy certain types of products; for example, someone listens to music and buys primarily music CD's online. They won't buy your travel package, because they trust certain types of products they like. If you sell them outside the category they like, you lose.

Specialists have longer purchase decisions and are best not sold on first contact. Give them a free report, free demo, or free gift certificate for requesting more information. Put them on an automated email follow up sequence to gradually develop the sale over two weeks.

Type 3. Giver

People, who give gifts regularly, such as corporate event planners, will buy from certain flower and gift specific shops. These are repeat buyers and ones you want, but be wary of selling flowers and gift items in a site that has no relation to the repeated gift giving behavior of these types of customers. It's fine to sell flowers on Mother's Day and Valentine's Day anywhere on your site, but outside of those holidays and Christmas, focus on related products.

The Giver is easy to pinpoint; find the right holiday and time your communication with givers. In between holidays, find out who are the corporate buyers, the senders of online greeting cards, and what web sites they visit when looking for gift ideas.

Type 4. Bargain Buyer

These people are buying just on price; they are the reason Buy.com loses money on every transaction. They are likely not the best buyers for your site, and the ones people love to target. Their loyalty is based on price, not the company or product. Most people spend their entire time appealing to this bargain basement. This can be deadly; you may get sales, but customers are loyal to the price, not to you, and not to your product line. You develop initial sales but undermine the long-term value of the customer by focusing on price instead of your company.

Give the Bargain Buyer coupons, guaranteed lowest prices, or gift certificates. Be sure you register them on your email list for repeat sales of bargain products. The brand for the Bargain Buyer is the price, not your product; having lots of Bargain Buyers on your list does not make it as valuable as other shoppers, because their loyalty is based solely on price.

Type 5. InfoHound

These people are looking at information before going to the showroom to buy. The challenge here is to ease their fears, give them information, and drive them to the point of sale. Giving away free information to these types is a sure way to kill sales; they read so much information, they forget to buy.

InfoHounds are a tough sell; subscriptions work for a limited number of content sites, and they expect information to be free. The best thing to do with InfoHounds is to insert select products into your content, and make it appear to be either a sidebar to the article, or feature related products at the beginning and end of the article. Make sure not to mess with the content by filling it with advertising; let them read the content and deal with advertising at the beginning and end of your offer.

Now that we know the types of buyers, let's talk about your content, and weaving in products to the context of your Web Site with a case study that shows how important the context of a Web Site is to the sale.

Go to the Top of the Page

Contextual Conversion Ratio (CCR) Case Study: Less Traffic, More Qualified Leads

The WipeOut CD Repair Kit
(http://www.activemarketplace.com/wipeout/)

One of the most common assumptions when beginning an affiliate program is to target the sites with the most traffic. After all, traffic equals impressions equals sales, right?

A recent client, WipeOut CD Repair Kit, showed me how wrong this statement really is. Thousands of impressions are not as important as the context of the Web Site. Context can be subdivided into two categories:

1. The content and messaging of the site; is this a place to read, a place to shop, a place to get advice, or a place to price compare? You need to understand why your customers visit your affiliate's Web Site.

2. The type of shopper at your site.

Background to Strategy

The WipeOut CD Repair Kit quickly saves your CD's from skips and scratching. While not a brand name, you can find this kit in many stores like Fry's and Circuit City. Anyone who tries the product is amazed; it saved two of my own CDs the first day I have the kit.

The value proposition is simple and alluring; one bottle of WipeOut can save many CDs. If it saves one, you just about pay for the bottle by the price of the saved CD.

Armed with a great product and a powerful value proposition, we targeted music sites, MP3 sites, and anything content related to music products. We also looked at computer sites and DVDs, all different contexts for using this product. We thought we had a huge hit when we nailed down a free, revenue share run of a major musical site, filled with tons of visitors and a reputation built over years.

The results we found showed how important the context of a Web Site is, and how content can sometimes undermine the sale.

What We Thought Would Work: Right Offer, Wrong List

High traffic sites with music content were one of our major targets, and we landed a big content Web Site, who agreed to do a limited test in their banner advertising space. The WipeOut CD Repair Kit was advertised for a few days, resulting in 220,000 impressions.

This site has a loyal following and being featured in their banner ad space seemed a good idea. When the dust cleared, we made just 2 sales. Suffice to say, neither party decided to pursue the test.

The sellthrough rate was an abysmal 0.01%.

Here is the interesting part; our clickthrough rate on our banner ad for WipeOut was 1.5%, which was about triple the Internet average, and triple the average at this big Web Site. In terms of banner ad space, the ad performed well. In terms of affiliate programs, based on real sales of real products, it was a flop.

Here's why I think people did not buy from this high traffic site:

1. WipeOut is not a recognized brand name. Trust and credibility online are essential for sales, and the name was simply not known.

2. The viewers knew they were clicking on an ad; they were at the Web Site to browse, not to buy.

3. Banner ads are for branding, not for sales.

What Worked: Right Offer, Right List

During the same week another affiliate for the WipeOut CD Repair Kit delivered 900 impressions, paling in comparison to the 220,000 the bigger Web Site shared.

But even with just 900 impressions, this affiliate made 30 sales of the WipeOut CD Repair Kit.

The sellthrough rate was a sizzling 3% (compare to 1.67% Internet noted by Forrester.)

Where else but affiliate programs could you get this kind of quick, research and development? Few programs really utilize the power of affiliates to test and show them what works. We made the mistake of thinking in terms of just music, forgetting that the nature of the shopper is an important context.

So what kind of site was it that generated a 3% sellthrough?

A small, classified ad site that used the same banners! They simply put our banner ads in their space and the visitors bought.

Here's why I think we made so many sales via this channel:

1. Classified ads attract visitors who are more likely buyers. They are at the Web Site looking to buy or sell.

2. The visitors knew they were clicking on a banner ad, but it was delivered amidst a site filled with ads. They weren't lookers, they were shoppers.

3. Banner ads in this site were for sales, not branding. You don't see major music labels advertising through this site, so the brand name recognition was not as important.

The next time you go out with an affiliate program and think in terms of volumes of impressions, think again. The real sales power is in the niche sites that can quickly convert visitors to buyers. Content sites are tricky for generating sales, depending on the nature of the visitor.

In this case study, the allure of a high traffic site was nice, but to make the sale, the classified ad site was best. The context of the Internet visitor, in terms of being a browser or a buyer, was more important than the content of the Web Site.

Determining the context, the best place to put your "necessary link", is essential to success. The best advice is to not get starry eyed over millions of impressions, and to focus on your Contextual Conversion Ratio (CCR).

Go to the Top of the Page

The Three Key Partners In Affiliate Programs
Partners Drive the Rapid Growth of this Network

Measure e-commerce success when three parties win:

1. Revenue Partners (Affiliates) Provide Response Driven Space and Earn Commissions
2. Product Partners Pay For Advertising and Get Buyers
3. Reward Partners Provide Discounts, Rebates, and Special Offers To Generate Leads

By merging strategic relationships with a state of the art technology that instantly and effectively merchandises a Web Site, affiliate programs aim to do what few companies on the Internet are doing...making sales while minimizing advertising costs.

The ability to convert visitors to sales is what separates successful e-commerce ventures from failures Build a tested, proven system to increase your SellThrough with quick, specific Internet merchandising.

If you purchase banner ad space and if you want to increase sales via the Internet, then this proposal is vitally important for you. Here are the four Partners you will create:

1. Revenue Partners, Active Affiliates

Affiliate programs are one of the most efficient ways to generate traffic, leads, and to create an online sales system connected to many sites. Plugging into an existing, trained network is better than fishing for mediocre Web sites that won't sell.

Successful affiliate programs treat affiliates as Revenue Partners, developing reach into the many niche Web Sites on the Internet. The key is to find many, good affiliates; personally train and hone your sales force with an Internet package that develops effective affiliate merchandising.

The challenge is to build an efficient affiliate network that can cycle merchandise on their online "shelf space" called a Web Site. The goal is to create Revenue Partners.

The Revenue Partner will generate Internet traffic and sales.

Revenue Partners Benefit With:

• One Affiliate Code for many products to place in a Web Site or ezine.

• Full suite of advertising creative for use on Web sites, ezines, and opt in email.

• Automated Affiliate sign up process, with instant passwords so Revenue Partners can check their traffic, their referrer logs, and their sales online in a real time system.

• Ability for Revenue Partners to update and maintain their contact information.

• Classified ads, banner ads, ezine ads, buttons, free report page, and endorsements.

• Free excerpts of reports, articles, etc.

• Email sent with every order, with approved customer contact information.

• Ongoing, Revenue Partner training.

• Revenue Partners may get an entire Web Site with their logo to integrate into their efforts. Customization features allow an offline retailer to create an entire site with the touch of the mouse, and even add Maps to find their store.

• Lock in your sales force by giving them the support, tools, and know how to succeed. The affiliate technology automates much of the process so you can focus on marketing.

2. Product Partners, Merchants

Many merchants sit at their Web Sites hoping visitors will click on non-responsive banner ad space. Active merchants who want to showcase their product line have a distinct advantage. They make sales by tapping into a system that generates traffic and converts existing traffic into sales via effective merchandising.

These merchants are powered by a direct response, e-commerce system for quick testing. Your offer is carefully targeted to the audience with precise ad copy. Your Product is positioned within niche sites that can generate qualified traffic at the lowest cost. The SellThrough conversion ratio and cost per visitor, and per buyer, is carefully followed.

Testing and adapting your offer will quickly allow you to improve the results of your efforts. Matching the right offer to the right Web Sites improves your ROI

Product Partners Benefit With:

• The order tracking code, alerting Partners via email of every order.

• Tracking code is also backed up in your system, so if there's any issue with any order you can track it internally, as well as within the Merchant's system.

• The affiliate program makes it easy to download and import ordering information into any database system..

• The Merchant can implement an affiliate Web Site as an adjunct to a current Web Site, or separate promotion. Any way you like it, the system works.

• Product Partners get a Web Site sales letter, order page, testimonials page, info page, guarantee page, and a professionally produced custom Web Site to clearly state the benefits of their product.

• Product Partners can easily make this available to whomever they want.

• Product Partners can also take the credit card orders and do all the shipping.

• Alternately, you can manage everything yourself, upload it into your accounting system, process the credit cards, and do the shipping. You can even integrate affiliate technology into existing legacy systems and shopping carts.

• It is that simple. E-commerce can generate sales with effective merchandising.

3. Reward Partners: Discounts, Rebates, and Special Offers

Reward partners can easily tap into the power of the affiliate program. By integrating tested, proven methods of direct response marketing, you can get your discount, rebate, or special offer in the hands of the right customers.

Extend the power of your Product Partners by carefully selecting the right mix of product and offer. A Product partner is offering the primary product, but the immediate upsell and lead generating power of this sale is extended to the Rewards Partner.

For example, a customer goes to a music site to buy a DVD. They click on an affiliate link to a special, DVD cleaner for $14.95. If they buy the DVD Cleaner, they get a free bonus for $10 towards the next purchase of a DVD from the Rewards Partner.

What drives this system is the buying behavior of the customer; what better time to place a special offer than in the hands of someone about to make a purchase?

Reward Partners Benefit With:

• An automatic upsell in the e-commerce chain; the Product Partner sells more product, the Reward Partner gets its offer to a qualified lead at low cost.

• Create a network of Reward partners to bring complimentary discounts, rebates, and special offers on desirable items for their customers.

• Free promotion and introduction to the extensive affiliate Network.

• New buyers at a pre-determined acquisition rate.

• Low cost lead products that encourage buying behavior.

• Auto-merchandising system.

• Possible Co-Op Advertising and other joint ventures are available.

• Extend the reach of their ad campaign for less money.

• Pay for Cost per acquisition, Cost Per Customer Visit, and Cross merchandising.

• Move more products at less cost through performance driven merchandising.

Bonus Partner 4. Customer Acquisition Partner: Your Affiliate Program

Customer acquisition costs are one of the reliable Internet measuring sticks. Determining what it costs to get customers is difficult when rummaging through untargeted banner advertising or wasteful, one shot Internet marketing efforts.

In today's Internet Market, three key benchmarks must be achieved:

1. CPC: Your Cost Per Customer can run anywhere from $50-$120, and more, on the Internet. Reduce that below $30 with performance driven advertising, including affiliate programs.

2. RPC -- Revenue Per Customer: Maintaining momentum and ongoing sales means knowing the value of your long-term customer. What is the lifetime buying value of your customer? (Hopefully more than the $30 it cost you to get them!)

3. Customer acquisition is the ultimate Internet goal. What does it cost to get your customer, and how much revenue does that customer generate? Most Internet businesses do not measure these factors; those who do not will lose money...guaranteed.

It is simple. Launching your online initiative requires performance-based advertising. Here's what you have to choose from:

A. CPM Advertising: Extending your brand and value proposition, you pay big dollars to be in front of many viewers. The price is high and sales are often low. While extending your reputation, you also pay too much for space that can be negotiated for better performance.