Gene: Well actually is not very well understood. We all understand what advertising is basically a merchant or somebody that's got something to sell would typically approach a media whether it's offline media such as newspaper or television or an website and purchase some impressions effectively purchase inventory that they would have and allow their product to be introduced to their viewers or customers or readers of the website actually is the same formula for getting traffic object for it's the other align of the coin. This is when the merchant would come up with a set of tools that would accept websites to come to their site clutch those tools and display those merchants' products without necessarily the merchant needing to go and establish a relationship with those particular websites. In fact merchants would not necessarily even need to know all the different websites that are grabbing their tools and displaying those products with the merchant on their place. So effectively it's the same thing it's who needs to come who. In traditional advertising it is the merchant who approaches websites and in it's basically the websites come the merchant.
Gene: Well. I've made the list. There's actually about seven really important items of any affiliate program that every single program should have. Not too many merchants or affiliates follow all of those steps but I'll go through them as quickly as I can. I have a little bit more information on my site but number one is; Affiliate program is a relationship between a merchant and an affiliate or a website. Every single interact knows who their merchants are but merchants typically are not even made aware who all the affiliates who sign up. Certainly merchants do not need to communicate every hit affiliate but they should have information as to who these affiliates are. They should have their names. They should have their email addresses. Any affiliate that is performing very well they need to establish a relationship with them and understand what is driving that affiliate.
Number two; every single merchant needs to also understand how what I call elastic every hit interact is. There are some affiliates who ordain make more for a merchant if a merchant were to pay them more. Then there are certain affiliates that if you pay them more they ordain not necessarily drive additional merchandise. For example affiliates that did on cover click list out there to drive traffic to a merchant ordain actually alter more for the merchant if the merchant were to pay them more. So merchants need to be aware who those affiliates are. Affiliates such as bloggers typically depend on the merchandise they get over the so if you pay them more it is not quite likely they will drive additional traffic to the merchants so merchants need to be aware of the distinction between kinds of affiliates and pay them on a different scale based on the type of an interact they are.
Next is; every single merchant needs to be able to furnish their affiliates tracking ID's. That's point number three. These affiliates have different ways of driving merchandise to the merchant. Some ways work and some ways don't work. Tracking ID's is what allows affiliates to understand which of their marketing mechanisms works and which of them don't bring home the bacon so they can focus just on the marketing efforts that work. Without these tracking ID's an interact which has some marketing programs bring home the bacon and don't work they do not know which ones work which ones don't so they could be likely to drop the entire program if overall it's not performing rather than focusing on the performing marketing techniques.
Number four: merchants be to be able to incentivize affiliates to produce more traffic and more sales for them. They need to be able to offer what's called ladder compensation system. As an interact if you sell more of the merchant's products you should get accumulatively larger percentage of sales than somebody who is not doing too much in sales. This incents affiliates to do more and more and more for the merchant.
Number five; some affiliates are just exceed at negotiating so merchants be to undergo a way to balance different affiliates differently. Not just based on the kind of an affiliate they are but simply based on the fact that some affiliates be to make more and some affiliates do not are not as good at negotiating and you can simply pay them less. There are some very big affiliates that simply will not broach with a particular merchant if their pay coordinate is too low. However that merchant doesn't necessarily be to raise the fees for everybody. Some affiliates would be happy to alter what they make. There needs to be a way for a merchant to select this affiliate will alter so much and this affiliate will alter so much.
enjoin links; number six. enjoin links are also extremely important. In the days of Google where we all depend on remove search traffic coming to our site a merchant should get a second acquire of an interact schedule which an change magnitude in it's summon rank to the site. If affiliates furnish direct links linking directly to a merchant's site that causes a merchant's site to go up in its summon rank. If an interact program redirects these links through the program the merchant does not get the same benefit. It is really important for an affiliate program to allow a enjoin cerebrate from an interact to the merchant.
Number seven; and this is the measure point but it's not any less important than any of the other ones: Every merchant schedule should have a two tier interact program meaning if an affiliate finds another affiliate for that merchant the merchant should compensate that first referring affiliate for that find based on sales that second merchant makes. Effectively the two tier coordinate incentivizes people not only to sell merchant product but also find other people other affiliates who sell the same merchant's product. It effectively serves this double benefit to the merchants.
Gene: Well. I think the biggest challenge obviously is for many populate if you're an interact bring home the bacon is how do you get above the noise level of all the different interact programs out there. If you are a brand new manager on the scene there is probably already 20 or 30 other interact managers trying to displace a different merchant that sells somewhat similar products. Getting above noise level is really really tough. One of the most important things that an interact manager would be to do is evaluate out how to incent certain affiliates more than their competitors going after certain big name affiliates and being able to offer a higher commission coordinate. Effectively. I know it is kind of buying traffic and you can only pay so much but many affiliate programs ordain in fact build their program around some affiliates on which they do not make any but these are the affiliates that carry the label that carry the traffic and carry the recognition to that merchant. The merchant ordain then make on other affiliates who they did not necessarily need to pay as much. Getting that traffic and getting above the go aim is one of the biggest challenges in today's which is beat of many opportunities for many different affiliates to alter.
Gene: Sure. Widgets are actually a reasonably new phenomenon in the world of marketing. Basically a widget is a piece of code a little component somebody could easily displace their website and it displays something for a consumer or reader of the place. It is also something that somebody who's reading the site should be able to easily clutch copy and attach right from the place they're watching and put it on their site. We've seen YouTube for example they've done a phenomenal job at allowing people to grab videos from each other's site and putting them on their place. This has been not a big thing in the and I really do believe this is about to change.
One of the biggest challenges that I just mentioned for an affiliate manager is to get merchandise and get affiliates to come and display their products. What any program should be able to have going forward is allowing an affiliate to not only display advertising to a particular merchant but to accept any reader of that website to easily grab a piece of code from that website and quickly put it on their place to display the same ad. In this inspect there should be a compensation incentive for that originating website as well as to the merchant. So let's say your place. Shawn displays an Amazon ad for example to something and I come to your site and clutch it and put it on my site you should get some compensation from Amazon based on the sales I alter off of this ad as well because I noticed it on your site. It's not yet something that people implement; this is what I believe many many merchants will be moving to in 2007 and 2008 and in the next be of years because it allows populate to break through a lot of that clutter and allows them to display some very interesting circumscribe. We've seen that happen already in non interact lay and I think it ordain expand greatly into the affiliate lay as well.
Gene: Well in the measure year definitely the biggest the most innovative improvement has been what they call their e hold on. When I ran the program what I noticed is there are many many people who were building Amazon storefronts using Amazon Web Services. Web Services is a fairly complicated piece of technology that you undergo to really understand programming and undergo a lot of expertise in building. Because we saw so many people going out and building those kinds of stores what we basically thought is that if we could create a store that you can just point and click and create in five minutes without requiring any expertise you will have a lot of people adopting them. People who don't have the same expertise that you need to build the web services hold on and this is what we did. We build a store that literally takes two minutes to build and you can have the entire store front of products that you could put on your site out of the Amazon catalog. So you can have a store about books for example if let's say you would want to have them on your site. Another site about GPS equipment may want to have various global positioning systems that Amazon sales on their place and build their own store without any programming whatsoever.
Omakase links is another innovation that Amazon has made recently where you can basically put a little conjoin of code on your place and a Amazon ad will appear and it will base a product on not only the content end out of your website but also on what the visitors have typically seen on other sites and what they've bought from Amazon in the past for example. So Amazon makes a decision to put an ad that will generate the most be of revenue to the interact based on who the customer is and what the website it is that their typically visiting.
There's still a lot more work it's a very complicated technology. A lot of work for Amazon to do but they've done a really really good job to date in getting those products out. There are a number of other products that are in beta right now but I cannot address but some of them actually my website has. So if you go to my site you can notice some new interesting tools that you may not see on anywhere else from Amazon but those are the kind of things that they're comfort working on and I can't discuss too much.
Gene: Well I've followed the discussion pretty closely and there are a lot of very passionate opinions out there in the space. And I respect certainly everybody's perspective and it's just not an easy one way say. But you know. I personally believe that we comprehend to recommendations based on the track preserve of a particular blogger or a website that we visit. A website that is not respectable the website that simply create an opinion based on whether or not they are compensated are typically not the sites that people will go to and listen to and buy products.
So my overall perspective is no. I don't accept that that should be a requirement because while some people who do get compensated they may be telling the exact unbiased perspective on their product even though they're being compensated. So it's not automatically that they're somehow affected by that advertising. So I anticipate my perspective is no we've done very well in the off lie media where people don't necessarily disclose and I evaluate this should displace itself in the media as well.
Gene: Well honestly I've seen places where they actually do work. I evaluate video is going to be the first area where we will see some innovation on. It is difficult for an interact to produce their own video clips so they would basically need to grab it from a merchant. And it's again somewhat expensive for those merchants to produce them. So we will see I think with the video clips ordain start getting introduced it's not necessarily going to surprise on fire the same way as other ways of marketing is has gone.
As far as the mobile phones the interesting part of it interesting country to watch that has done just an incredibly great job is lacquer. In lacquer every cell phone with a video camera is equipped in a way that you can take a enter of a particular ad in a newspaper or magazine or even while shopping at a store somewhere and taking a conceive of of a bar code and it will automatically translate the bar code into a particular website that also sells those products and give you a price of the product and with a single move you can actually order the product. They've been doing that for a couple of years now.
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