As affiliate marketing continues to become more widespread at e-commerce companies, the promise of Web services technology promises more innovation and growth.
The practice of affiliate marketing is popular especially among startups with very small marketing budgets. The practice allows site "A" to feature buttons from site "B", and then site "A" gets a portion of any sales generated for site "B."
"Affiliate marketing continues to evolve. We've seen increasing sophistication with both the advertisers and the publishers," according to Lisa Riolo, vice president of Client Development at Be Free/Commission Junction, one of the largest affiliate marketing networks. "We've really gotten away from just what many people had perceived as just 'banner advertising' and getting into a much more comprehensive approach of how you're going to promote a product on a pay for performance basis."
| According to eBay, its largest affiliate earned over $1.3 Million dollars in January commissions, the largest amount yet in their affiliate program's history. Their top 25 affiliates average over $100,000 per month each and the top 100 affiliates earn almost $25,000 each per month.
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The distribution models now include Web sites, search and e-mail marketing methods. Email in particular is on the rebound in 2004 according to Riolo, partially due to a positive impact of the "Can-Spam" Act.
"In 2003, the general approach was to back away from it quite a bit, there was some hesitancy prior to the legislation," she said. "We've seen almost a sigh of relief, that now they now what's expected of them and we can go about promoting."
According to eBay's Senior Director, Internet Marketing, Vaughan Smith, eBay's affiliate marketing program is doing phenomenally well so far in 2004. eBay migrated to the Commission Junction platform in January 2004.
"We're regarded as the world's biggest affiliate program and we're very confident that we're driving a lot more economic activity through our program than Amazon, which is usually held up as a benchmark," he said.
Amazon's program, known as "Amazon Associates" has been in place since 1996 and is generally attributed with creating the online affiliate marketing industry.
According to eBay, its largest affiliate earned over $1.3 Million dollars in January commissions, the largest amount yet in their affiliate program's history. Their top 25 affiliates average over $100,000 per month each and the top 100 affiliates earn almost $25,000 each per month.
"eBay is a little harder for an affiliate to understand than say Amazon but the earning potential is greater," Smith said. "At the end of the day that's mostly what they care about and that's been working well for us."
Smith acknowledged that the affiliate marketing industry would be maturing even further in 2004.
"People are appreciating the value in affiliate marketing," he said "The word 'maturing' is a good one, it's still immature but it's getting more sophisticated reasonably quickly."
Part of that increasing sophistication is expected to come from the adoption and innovation that Web services enabled affiliate marketing is expected to provide. Both eBay and Amazon have Web service initiatives in place. eBay's Smith however admitted that eBay's Web services platform is not yet integrated with its current affiliate marketing program.
"Web services is a big opportunity in 2004 but it's something that has not been rolled out yet," he said. "It's on the technology roadmap."
Amazon said its Associates program is currently making use of Web services allowing affiliates to make unlimited calls to the API. Using Web services, affiliates marketers can make full use of Amazon's catalogue and e-commerce capabilities, the company said.
According to Amazon.com, "With Web services, associates can give their site visitors more product information, which in turn leads to a better buying experience and more educated and satisfied customers."
ZapThink analyst Jason Bloomberg suggests "Amazon has been pretty successful and has quite a large affiliate community that uses Web services to access their e-commerce capabilities." Though, Bloomberg notes that he hasn't yet seen broad adoption of Web services in the affiliate marketing industry it is something that he views is likely to happen. One of the issues he sees in the Web services industry is how to make money with publicly available services.
"What we see happening is a lot of different companies trying out different business models," Bloomberg said. "Amazon is making money because their affiliates are selling their products so they don't have to make money directly with someone paying to use the Web service."
According to Riolo, Be Free/ Commission Junction has a strong interest in Web services as well is expected to make an announcement about its Web services initiative in the second calendar quarter of 2004.
"There is no doubt that Amazon has been a trailblazer with it," Be Free/Commission Junction's Riolo told us. "When you hear about Web services what that really tells you is, here's an opportunity to enable success and empower affiliates across all the distribution methods."
Adapted from Internetnews.com.
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