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4-Step Plan to Getting the Most Out of Your Keyphrases

Every January, amidst off-key renditions of Auld Lang Syne and second-rate champagne, we make resolutions for the New Year. We resolve to lose weight, to exercise more often, or even to quit smoking. As e-business professionals and webmasters however, there is one resolution that we should add to our list: the resolution to use keyphrases more effectively.

Keyphrases are common terms visitors enter into search engines to find products and services. When used effectively, keyphrases can increase the amount of qualified search engine traffic your website receives.

Before you start debating the merits of lime green over teal green for your website’s color scheme, before you start writing copious amounts of marketing copy, in fact, before you do anything, it is a good idea to do some keyphrase research.

The two main objectives of keyphrase research are:

  • To find the best keyphrases for the products and services you offer.
  • To find common sense keyphrases that people understand, and would actually search for.

Below are 4 important steps to help you achieve these goals.

Step One: Brainstorming
The first thing you need to do is consider your business and the types of products you sell. Now write down a list of keyphrases that directly relate to those products. Avoid jargon, gobbledygook or marketing buzzwords, and instead, try to put yourself in Joe consumer’s shoes. What search terms would the average person use when trying to find such products?

Let’s say for example, that you run an online business that specializes in gag gifts. You might initially come up with keyphrases such as whoopi cushions, fake vomit, rubber chickens, etc. This will not be a definitive list. In fact, most of the terms you come up with will probably be discarded later on. But for now, it is a good start.

If you are having trouble zeroing in on keyphrases, try using Overture’s Search Term Suggestion Tool

Overture is a pay-for-placement search engine that allows you to register and bid on keyphrases. Fortunately, without having to do either, you can use the suggestion tool to find out how many times a term was searched for during the preceding month. The tool also displays a list of related search terms that include your keyphrase. Note that the order of the words in your key phrase is irrelevant.

Step Two: Digging Deeper
Now that you have a list of keyphrases in hand, it is time to start researching in earnest. A powerful tool that will help simplify the process, is a specialized database called Wordtracker. Wordtracker is much more precise than Overture’s Search Term Suggestion Tool. Wordtracker’s database contains millions of queries from metacrawler.com and dogpile.com (metacrawlers that query the main search engines such as Google, Yahoo, and AltaVista simultaneously) compiled over a two month period.

Using our hypothetical gag gift business once again, let’s say you enter the keyphrase “whoopi cushion” into Wordtracker’s database. Wordtracker will tell you how often people searched for the term and how many competing sites use the same keyphrase.

Suppose you discover that “whoopi cushions” is not a highly searched-for term? Using Wordtracker’s lateral search results, you can easily find related terms that are more popular — “gag gift” for example.

Step Three: A Few Calculations
Finding a highly searched- for keyphrase that relates to your products is all well and good, but if your competitors have all optimized their web pages for the same keyphrase, you will only be another small fish in a big pond.

The best keyphrases are not just the ones that are popular; they are the ones with fewer competing web pages.

This is where the concept of KEI (Keyword Effectiveness Index) comes in. To calculate a keyphrase’s KEI, you square the popularity of the keyphrase, and divide it by its competitiveness (the number of web pages returned in a search engine’s results pages when you search for an exact keyphrase).

The formula for KEI is (P^2/C).

P = The popularity of the keyword.
C = The competitiveness.

Fortunately, Wordtracker incorporates the KEI into its database, so you don’t have to do the calculations yourself.

Let’s say the keyphrase “gag gift” has a count result of 1500 in Wordtracker’s database, and a competing result of 20,000 in AltaVista. The KEI rating for gag gifts (in AltaVista) would be 112.5. Of course, you would also have to calculate the KEI for the other top search engines as well.

The higher the KEI rating, the better the keyphrase.

Step Four: Putting it All Together
Once you have found your main keyphrase (you may also wish to include secondary keyphrases on inner pages) it is time to start optimizing your content.

Here are some guidelines to follow:

  • Place keyphrases in Title tags, Meta tags, and in the <H1>-<H6> tags.
  • Use the main keyphrase at least 3-5 times in the body of the home page.
  • Place keyphrases prominently in the beginning of paragraphs, alt tags, hyperlinked text, and bold text.
  • Write copy that is between 250-300 words in length on each web page, and make sure the text focuses on the keyphrase.

Final Words
Keyphrase research can be a time a consuming affair. It may take as many as 2-3 days to collate and analyze all the data. Still, it is well worth the effort because it offers such a high return on investment. So if you keep one resolution this year, make sure it is to use keyphrases more effectively. After all, you can always lose weight, exercise more often, or quit smoking next year.

-Julie Joseph

Julie Joseph is a search engine optimizer and copywriter at Red Carpet Web Promotion, Inc.

Increase your sales ratio to deliver more ROI

You may have noticed the animation on www.overture.com that says, “Overture delivers ROI daily.” Notice that they do not specify whether they are delivering a positive ROI (return on investment) or a negative ROI! Unfortunately, you will have to make those calculations yourself.

Knowing how much you can afford to spend on each visitor, will help you to use your marketing dollars more effectively. First however, let’s focus on the nuts and bolts of the marketing plan to sell your products and services online.

CPC
CPC stands for Cost per Click-through. Many marketing options involve paying a fee for each visitor who is brought to your site. Overture is a perfect example. (See our past article on Overture).

Overture sets a minimum bid of $0.05 per click-through, so to use this service, you should at least be able to spend this amount per visitor to your site, and still make a profit. Since your competitors also want a higher position in results for the same keyphrase as you, the bids escalate, and in some cases, companies end up paying over $10 per click-through! Many companies are getting caught up in the challenge of keeping the top positions, and may even be losing money on these bids in order to be the market leaders. In these cases Overture is the only winner.

Another factor in the bidding wars is that search engines such as Yahoo, MSN, and AltaVista display the top three Overture results, therefore making these positions even more sought after. Paying click-through fees that are above your estimated profit margin is a dangerous practice because your competitors may be able to keep beating you until you run out of money! Is it worth it playing chicken with a company that may have much deeper pockets than you do? It is a good idea to figure out how much you are willing to spend per sale, and then to figure out your sales-per-visitor ratio. This will help you to find out how much you should spend per visitor. Avoid spending any more than that amount.

SEO
SEO stands for Search Engine Optimization. It is often a better investment to pay for search engine optimization and submissions, than to pay click-through fees. As CPC bids escalate, the long-term benefit of SEO becomes more evident. An SEO campaign increases your position in the search engines to generate more traffic. Although you will have to pay to optimize your site, you will not have to pay a forever increasing click-through fee. Rather than paying by the visitor, you are investing in a long-term strategy to bring in a steady stream of customers. You may find after some experimentation that a combination of both CPC and SEO services works best for your needs.

Sales per visitor
The sales-per-visitor ratio is a crucial number to monitor and improve for a higher ROI. For example, if you make one sale on your site out of 100 unique visitors to your site, then you have 1% sales-per-visitor ratio (depending on your industry this could be average). A higher sales-per-visitor ratio is more desirable because you will make more sales for the same amount of visitors. This may allow you to increase your marketing budget and to achieve an even higher volume of sales. Even if you do not raise your marketing budget, an increase in your sales-per-visitor ratio will leave you with a higher ROI.

Steps to increase your sales-per-visitor ratio

  1. Improve the quality of your traffic
  2. Improve your site’s usability to keep visitors on the site
  3. Improve your perceived credibility to increase customer confidence
  4. Improve or simplify your ordering process to reduce shopping cart abandonment

Increased marketing budget to get more volume
If you pay for visitors by the click, and after working on these steps your sales-per-visitor ratio increases from 1% to 3%, then you will be able to increase your bids because you will be making more sales. For example, if you pay $0.10 per visitor (CPC) and make $15 per sale (after other expenses), then with a 1% sales ratio you end up with a $50 profit for 1000 visitors (see breakdown below).

Sales-per-visitor ratio of 1%
1% of 1000 visitors
10 sales
$15 time 10 sales
$150 profit before CPC
– $100.00 CPC cost: ($0.10 X 1000)
$50 total profit

If you increase your ratio to 3% your profits go from $50 to $250 for the same amount of visitors! At this point you may consider raising your bid to $0.15, which may in fact raise your volume enough to increase your overall profit.

Sales-per-visitor ratio of 3%
3% of 1000 visitors
30 sales
$15 time 30 sales
$450 profit before CPC
– $200.00 CPC cost ($0.10 X 1000)
$250 total profit

Key to success
Depending on your goals, you may choose to increase your profit per unit or your volume, in order to make more money. Either way, you must first understand the relationships between CPC, sales-per-visitor, and profit. An increased sales-per-visitor ratio is the best way to take advantage of increased visitors because it will turn more of those visitors into buyers.

Jason Campbell

Jason Campbell is the co-founder and President at Red Carpet Web Promotion, Inc.

Link popularity to increase your ranking

Link popularity is one of the many factors that can alter your position in search engine results pages. The basic assumption by search engines is that if more sites are linking to your site, then it must be good. This is essentially why Google, MSN, Hotbot, Altavista, Inktomi and other search engines use link popularity as a factor in their ranking algorithms.

The Basics
Links are like votes. The search engines treat a link from one site to another as a recommendation that the second site is worthwhile and of interest to web surfers. When search engines are not trying to increase their income with paid results, their goal is still to actually provide users with the most relevant results. Search engines will take all the help they can get in determining which sites are the most relevant. Therefore, if many webmasters in your industry link to your site, search engines take notice, and use those links as votes towards increasing your search engine rank.

Keep in mind that search engines are becoming very sophisticated in their ranking algorithms. For example, they not only factor in the quantity of incoming links, but also the quality of those links. Below are the main factors that determine a quality link, followed by a step-by-step guide to increase your link popularity.

Authority
A link to your site from an “authorative site” is worth more than a link from a site with less “authority.” An ” authoritative site” is one with a clear and focused theme, with many visitors, and with many incoming links from other sites. The search engines factor in both the relevance and the popularity of the site that is linking to you.

Exclusivity
If a friend tells you “this is my favorite movie” or “this movie is among my top one hundred favorites” which statement makes a stronger recommendation for the film? The first one of course, because the film is a clear winner.

Search engines use the same logic. Basically, if a site has one outgoing link, that vote will be worth more than if it is one among a hundred other outgoing links on the same page. In fact, on Free-For-All (FFA) links pages and link farms, the link to your site is so diluted with other links that it is worthless. This is one of the reasons why you should avoid using such services. Another is that search engines try their best to exclude such pages from their databases.
Besides, you will never get a qualified visitor who discovers your site from such a page.

Recognition
For a link to count, search engines have to know it exists. Consequently, only links from pages that are in search engine databases increase your link popularity. A link from a site that the search engines do not know about, may still be advantageous however, because you may get actual visitors who discover your site via that link, and because search engines may find and index the site in the future.

It is easier to secure incoming links from sites that are less popular than your own if you are willing to do a link exchange, because the recipient will benefit more than you will. My advice is to choose sites that are relevant to your site, and then solicit them all regardless of their popularity.

Tip #1
If you offer good resources and useful content on your site, people will visit it and other sites will endorse it by linking to it.

Tip #2
Use the reverse link search feature in search engines to discover other sites that have linked to yours. Most search engines have instructions in their “advanced search” or “search tips” pages.

Tip #3
If there are many links to a site using a specific keyword in the hyperlink, it will raise that site’s ranking for the keyword. This is how keyword rich domain names can make a difference, because sites often use the domain name as the link button. Keep this in mind when providing others with text links to your site.

Apart from link popularity, you should also keep in mind that following links is a common way in which websites are found. By getting more incoming links to your site, you will be directly increasing your traffic from visitors clicking on those links.

Suggested process for a link popularity campaign

  1. Make sure that your site has useful and original content. Give people a good reason to link to your site based on the content you provide. Create credibility with quality content and writing.
  2. Create an outgoing “links” page. One way to get incoming links is to offer reciprocal link exchanges.
  3. Create a “link instructions” page on your site. Provide instructions to other webmasters on how to link to your site. Provide URLs, banners, text links and code to link to the most relevant pages on your site. Also provide the means and linking criteria for other sites to submit a request for a reciprocal link.
  4. Submit your site to search engines and directories. A link from a directory category can make a big difference in your traffic and link popularity because such sites have “authority.”
  5. Create lists of sites that are relevant to the theme or subject of your site but are not in direct competition with your business. Search for your keyphrases then pick out sites to add to your list. Keep track of the URL, keyphrase, phone number and email address on a spreadsheet.
  6. Include the people you already know. This includes professional organizations, industry partners, suppliers and customers who can also link to your site.
  7. See who is linking to your competitors. Use the reverse link search feature with your competitors’ URLs then add those sites to your list of companies to contact.
  8. Contact the person who is in charge of online marketing. For small companies it will be the webmaster. For larger companies it will be the marketing director.
    1. Avoid form letters. You can write them, but others do not like to receive them. So start with a base letter that you personalize and send separately to each company.
    2. Each letter should include:
      1. the URL of the page that you are requesting the link from,
      2. the text for the link (it should fit within the context of the site),
      3. your URL,
      4. your contact information,
      5. a concise reason why they should link to you. This reason should be related to the content of your site or to some other benefit that you are offering. Be creative yet realistic.
    3. Make it easy for them to link to you. You may know how to add a link on your site, but you cannot assume that everyone whom you contact has the authority and skills to add a link on theirs. Provide code, be available for calls, be patient and be convincing.
    4. Follow up. Do not be discouraged if no one responds to your initial e-mail. Remember that it is unsolicited, and that most people throw out unsolicited e-mail. It is essential to follow up with another e-mail one or two weeks later, as well as additional phone calls. Do not risk ruining an existing or potentially important relationship by being too bothersome.
    5. Document the process. Keep track of when and how each company was contacted and keep close track of responses. Also note the name of the contact person whom you are dealing with. I recommend adding this information to the same spreadsheet as your original list of sites.
    6. Follow up on the follow up. Getting quality incoming links is an ongoing task.
    7. Keep adding sites to your list.
    8. Thank others for linking to your site.

More on Link Popularity:
www.searchenginewatch.com/searchday/article.php/2160121
www.highrankings.com/linkpopularity.htm
www.searchenginewatch.com/searchday/article.php/2159391

Jason Campbell

If you have any comments on this article, please respond to news@redcarpetweb.com.
Jason Campbell is the co-founder and President at Red Carpet Web Promotion, Inc.

Search Engines want to make money too

The Search Engine world is ever-changing. Getting into the search engines isn’t free anymore. In fact, it isn’t even cheap! This quarter, I will discuss the various costs of submitting to the search engines and directories. Each engine charges for a different service and has a different payment schedule. It gets pretty hectic, so to follow along, put your thinking cap on.

Below is a chart of the costs for a business to get into the search engines. All prices in this article are in US dollars.

Search Engine Cost Schedule Service Comment
Yahoo $299 Annual Just to be considered
LookSmart $299 One time fee Just to be considered Option to pay $149 and
wait 8 weeks
Inktomi $25 Annual
Per page
Inclusion 48 hour refresh
The first page is $39
MSN MSN uses results from LookSmart and Inktomi,
so see LookSmart and Inktomi for their fees
AOL AOL uses results from Inktomi,
so see Inktomi for their fees
Altavista $19 Every six months
Per page
Inclusion
Weekly refresh
The first page is $39;
the next 10 are $29
Lycos $12 Annual
Per page
Inclusion
Weekly refresh
Also an Annual
membership fee of $18

Overture
Overture still shows its top three results on many search engines including MSN, AOL, Yahoo, Altavista and Hotbot. If your ROI is high enough, it is worthwhile bidding at Overture. See Last month’s article for details about Overture.

Google
Throughout this sea of fees lies the rock-steady island of Google. Google charges no fees, and consistently wins awards for “best search results”, “most webmaster friendly search engine”, as well as others. Google makes its money by selling ad space. You can see their ads on the right side of the screen, next to the search results for high demand keywords. For example, a search for “art prints” turns up ads for www.oneposter.com and www.easyart.com. Google’s system is similar to Overture’s.

How to get a good ranking in Google?
Two words: Link campaign.

Getting other sites to link to your website is probably one of the most time intensive and frustrating tasks a search engine optimizer must do. In fact, it usually doesn’t work unless you have set up a reciprocal link on your own site. The best sites to get links from are the directories: Yahoo, LookSmart, and the Open Directory Project (Dmoz.org). If you would like to get a link campaign started with Red Carpet Web Promotion, send us an email at details@redcarpetweb.com for details.

How to get a good ranking anywhere else?
Two words: Credit card.

  • Inktomi, Altavista and Lycos offer free submissions, but you get a boost (and a worthwhile one) when you pay their fees. You also get refreshed on a weekly basis. This allows you to post promotions on your website and, within days, they will show up in the search results.
  • Yahoo and LookSmart require a fee just to be considered for entry into their directory, unless you are a charity or solely an informational site.
  • Overture charges a fee for every person that clicks on your result.

Here are my suggestions on how to budget a submission campaign

  1. Pay to get into Yahoo and Inktomi. These engines are most likely to get the best results per dollar invested.
  2. If you can afford it, pay to get into LookSmart ($149 if you can wait the 8 weeks). LookSmart feeds the MSN search engine, and MSN is putting up a good fight with Yahoo as the top referrer.
  3. Start up an account at Overture and bid on the keyphrases with the best ROI. The minimum bid is 5 cents, so make sure that you make over 5 cents per visitor or you will be losing money. Remember that the minimum you must spend per month is $20.
  4. Altavista and Lycos are also worthwhile, but only if you have a high return on investment (ROI).

In another six months, all these numbers (and fees) will change again. That’s the search engine optimization business. It keeps us on our toes.

Next issue, I will update you on other changes in the industry.

Shawn Campbell is the co-founder and Chief Search Engine Optimizer at Red Carpet Web Promotion, Inc.
Shawn shares search engine news in each issue.

How to Profit from Seasonal Shopping April 2002

When our last newsletter was published in January, the Holiday shopping results were not yet in, but reports over the last three months have made it clear that online holiday shopping is a growing phenomenon. For example, the traffic to shopping sites for the five weeks preceding Christmas over the last 3 years has been:

Holiday season Average weekly unique visitors
1999 26,303,000
2000 34,265,000
2001 51,318,000

In terms of unique visits, there is a 50 percent increase compared with the 2000 holiday shopping season and a 95 percent increase versus 1999.
(Statistics provided by Jupiter Media Metrix). Click here for a weekly breakdown for 2001.*

In terms of actual sales revenue, online sales in the fourth quarter of 2001 totaled about USD10.5 billion, up from USD10 billion last year according to ComScore Networks (ComScore’s estimates do not include online travel sales).

Bizrate, on the other hand, estimated online spending for the fourth quarter of 2001 to be USD12.4 billion (up 35 percent on last year) and its estimate for the holiday season is USD 6.4 billion.

In order to profit from an online seasonal rush it is important to think ahead. Unfortunately, most promotion activities take a few months to kick in. However, there are some short term tactics that you can use before an upcoming lucrative season to bring the customers to you. These tactics can be used for any seasonal rush, be it for holidays, sports seasons, back to school or even events such as Formula One Racing, the World Cup Soccer or the Olympics. Below is a breakdown of some short-term marketing tactics that have immediate results, as well as long term tactics that take more time to mature.

Short-term tactics:

Inktomi

  • You can submit specific web pages to the Inktomi directory for under $40 each and they will add you to their database in less than 48 hours! This is great for seasonal specials. However, it is up to you to make sure that your page is well optimized to increase your potential for high rankings. In other words, the page that you submit should be about the keyphrase that you are targeting. Once you are in the Inktomi directory you can also be found in the following search engines: MSN, AOL, Overture, Hotbot, Iwon, LookSmart, About, and Espotting.

Pay-for-placement

  • Starting a pay for placement campaign produces very fast results; but you can bet your laptop that you will not be the only one to bid on terms like “Christmas Gift” next December. Nevertheless, if you have a page on your site relating to something specific, it is a good idea to bid on that item in Overture when the demand is highest. Overture is also useful for seasonal specials since any changes made to a listing are posted the same day. See our previous issue for more details on pay-for-placement bidding.

Long term tactics:

Search engine and directory submissions

  • The most cost-effective way to attract traffic (even for something seasonal like ski equipment) is to work at it all year round. For example, if you have a summer collection and a winter collection of products, you are much better off having two sites instead of flip-flopping your site with the seasons. This way each site will have the whole year to climb in the search results pages and your traffic will be better with each coming year. To switch collections to accommodate each season on the same site would entail having to start from scratch at the onset of every season.

Keyword Research

  • In any search engine positioning campaign, it always pays off to conduct proper keyword research. Knowing which keywords are most in demand, and which ones are overloaded with competition, is essential to making informed decisions about which keywords to focus on.

Other interesting 2001 Holiday shopping facts:

  • In marked contrast to their offline counterparts, few online retailers slashed their prices towards the end of the holiday season. (ComScore)
  • There was a strong growth in clothing and consumer electronics sectors in particular. (ComScore)
  • The number of online holiday shoppers grew from 53 million adults in the 2000 holiday shopping season to 64 million in the 2001 holiday season. (Jupiter Media Metrix)
  • The average spend per order was up 13 percent ($126 USD from $112 USD last year). Consumers also spent an average of 27 percent more on shipping, and 87 percent of orders were delivered on time.(BizRate)

In terms of the top shopping sites, Jupiter Media Metrix provided the following list of average daily unique visitors over the five week 2001 holiday season. These top sites should give you an idea of the holiday shopping mentality.

# website 2001 Holiday Season
Average Daily Unique Visitors in the U.S.
Home/Work Combined
1 ebay.com 4,515,000
2 amazon.com 2,519,000
3 mypoints.com 2,016,000
4 bizrate.com 683,000
5 half.com 660,000
6 mcafee.com 652,000
7 columbia house sites 598,000
8 eshop.com 588,000
9 americangreetings.com 563,000
10 toysrus 515,000
11 barnesandnoble.com 447,000
12 walmart.com 434,000
13 bestbuy.com 416,000
14 dell.com 408,000
15 bmgmusicservice.com 379,000

If you are wondering which products or services to promote, visit these sites to see what they are offering. If you can combine the right product with the right keyword, and promote it so that shoppers can find you, then you will truly profit from the public’s growing love affair with e-shopping during the holidays.

Jason Campbell

If you have any comments on this article, please respond to news@redcarpetweb.com

Jason Campbell is the co-founder and President at Red Carpet Web Promotion, Inc.

300

Affiliate marketing

The Merchant’s guide to affiliate marketing

Affiliate marketing is the invisible sales force behind e-commerce. It is the wires that we do not always see, but that we know are carrying a current. Setting up and running a successful affiliate campaign is not as easy as connecting a few loose wires. An affiliate campaign requires experience and planning. Fortunately affiliate marketing has been around for about six years, so you can learn from the experience of others. As for planning, we have assembled some guidelines to facilitate the task.

Affiliate marketing is used by a long list of companies of all sizes. Some examples of popular companies with affiliate programs are Amazon, Gap, IBM and Xerox. These merchants, for example, pay commissions to anyone who generates sales by placing links to the merchant’s products on their website.

Chris Diggins is a programmer who works from his cosy apartment in Montreal. Three years ago he created an online guide for Montreal students that consisted of useful resources and links to other websites that would be interesting to international students in Montreal. (See www.studentsguide.com). The idea was to generate traffic and then to find a way to make money with that traffic (Sound familiar?). However, rather than selling advertising space on his site, Diggins chose to become an affiliate. In other words, he found merchants who would give him commissions on goods that he sold from his site. Soon after, the student’s guide had a poster gallery where visitors could browse through popular posters and order posters from a merchant’s site. For each poster that Diggins sold from his Montreal student’s guide he received 25% of the sale price. He has built other sites since and currently generates sales in excess of $25,000 per month (He receives about 25% of that amount in commissions).

How do you attract people like Diggins to sell your products? First you need to figure out how to set up a program to track your sales from affiliates. You can track your sales with a third party affiliate manager or you may decide to create and manage your own affiliate program in-house.

Third party

Third party affiliate managing companies take care of many of the tasks involved in running an affiliate program.
They provide:

  • Quick exposure
  • Experience dealing with affiliates
  • Infrastructure for tracking and reporting
  • Access to a large number of potential affiliates who would be interested in marketing your products on their website or creating websites to market your products.

The most popular third party affiliate managers are Commission Junction, Be Free, Linkshare and Reporting.net. Depending on which company you choose, you will be required to pay a start up fee, an additional percentage of the commissions that you are offering your affiliates or a hefty fixed annual fee.

Chris Diggins’ advice about using a third party is that it is a good idea, especially if you are just starting your affiliate program, or if you do not have much experience in affiliate marketing. Even with a third party there is still a lot of in-house work, including managing, verifying, responding and recruiting affiliates. After several months, if you realize that your affiliate campaign is successful enough to support an in-house affiliate program and that doing so will save you money in the long run, then it may be time to switch to an in-house system.

In-house

To bypass the third party affiliate manager, you really have to know what you are doing! Technical knowledge and experience dealing with an affiliate program are necessary. You will probably need a team of developers and an experienced affiliate program manager in order to run your affiliate campaign. Your team will require the following skills:

  1. Technical skills to update and improve the automated affiliate management system
  2. Marketing skills for strategies to make your affiliate program successful
  3. People-relation skills to keep all of your affiliates happy

Top affiliates

With either a third party or an in-house system, you will soon learn that a few of your affiliates are generating most of your affiliate sales. The 5/95 rule applies in which approximately 5% of your affiliates will be generating approximately 95% of your sales. Many merchants have wondered how to attract “top affiliates.” Top affiliates are hard to find and hard to attract.

Once you have signed up affiliates and they have set up links to your site, it is important that they remain satisfied. Treat your best affiliates with special care to make sure that they continue to work for you.

  • Remember that affiliates can quickly grab one of your competitors instead of you, so it is important that they remain satisfied with your affiliate program.
  • Remember that affiliates talk amongst themselves. If you upset them, if you are not paying them on time or if you lower their commissions it will really hurt your affiliate program.
  • Remember that you cannot take money away from affiliates once you have already paid them. So take returned items into account when choosing your commission structure and schedule.

Learn from your competitors

Affiliate marketing is more flexible than just paying commissions to your affiliates “per sale.” There are various models of commissions. The most popular commission models are: “per sale”, “per lead”, and “per hit.” In order to choose a commission structure, first consider what type of commission your competitors offer. Each industry has its own standard.
Click here for more details.

To be set up you must 1) have the tracking program in place, 2) have determined your commission structure 3) have attracted a team of affiliates. Once you are set up the next task is to help your affiliates to do well. Encourage affiliates by offering extra incentives. Provide tools such as banners and searches for them to link to your site. Think of them as a sales team that requires your support. Diggins’ says that an affiliate is:

“like a travelling sales man, like a franchiser, like many things but no exact parallel exists in traditional business. You have to treat it just as seriously as if you were franchising things out. You can’t go in half-cocked. The biggest drawback is poor planning. If you have to go back and fix an error such as lowering commission rates for instance, it will cause a major setback to your affiliate program.”

If you have been planning to launch your affiliate program I hope that I have provided new points for you consider. The best advice that I have heard so far is to become an affiliate for another merchant before launching your own program.

Good luck!
Jason Campbell

Jason interviewed Chris Diggins on July 30th 2001 on the subject of setting up an affiliate campaign.
If you have any comments on this article, please respond to news@redcarpetweb.com

Jason Campbell is the co-founder and President at Red Carpet Web Promotion, Inc.