Re: commission junction and others

From: Ajay Segal <ajaysegal_at_avantmarketer.com>
Date: Thu 02 Aug 2001 11:16:03 -0500

STEFANIE OLSEN <stefanieo_at_cnet.com> WROTE:

>Can I get the group's opinion on Commission Junction
>and other pay for performance networks such as BeFree
>and LinkShare? Are these networks effective? How so?
>Are they growing in popularity? Any input is helpful.

TO WHICH RON SHERIDAN <ron_at_ronsheridan.com> REPLIED:

>I think CJ's upcomming merchant conversion rate
>reporting scheme, will pull the lid off the under
>performing merchant affilaite programs ... I see 50%
>or more of the merchants drying up and going away. And
>since CJ's will to stop offering merchant programs that
>pay on a CPC basis 50% or more of the affilaites will
>go away. Cause as we all know...the elephant in the
>corner (affilaite fruad) is likely at the core of
>CJ's no-more-CPC deals decision."

For those who don't already know, by "CJ's upcoming
merchant conversion rate reporting scheme" Ron is
referring to Commission Junction's recent launch of
its "Open Marketplace" for Advertisers and Publishers.

Under the Open Marketplace arrangement, Commission
Junction Publishers are able to determine exactly how
well a particlular Advertiser or even a particular
Advertisement has perfomed for all of the Publishers
in the Commission Junction Network (in terms of
conversion-rate-on-clickthroughs and commissions) .

On the flip side of this same coin, the Open Marketplace
allows Advertisers to precisely determine how well a
particular Publisher has managed to convert its site
traffic and how well individual Publishers rank within
the CJ Network in terms of total commissions earned
(which may be taken as an indication of what volume of
buisiness a given Publisher is capable of delivering to
Advertisers).

Commission Junction theorizes that the transparency
which the Open Marketplace brings to the table will
have the effect of enabling both Advertisers and
Publishers to each increase earnings and operate in a
more predictable fashion: Those Advertisers who are
able to convert more effectively than their
couterparts will be afforded the visibility in the
Network necessary to pull in the large number of
Publishers required to meet their volume requirements.
Publishers in the Network will be able to provide more
effective (and, therefore, lucrative) Ads to their site
traffic and will be able to fill a larger portion of
their inventory with Ads that will provide a predictable
a financial return.

Innevitably, both the Publishers and Advertisers who
are underperforming the market will sink to the bottom
or simply drop out (a phenomenon which is already being
observed).

To speculate a bit on one part of Stefanie's question:
As I see it, those Publishers and Advertisers that are
underperforming Commission Junction's Open Market might
flood other, less transparent Affiliate Networks, while
some Advertisers and Publishers in such less transparent
Networks that believe that the transparency would benefit
them might try and make a jump to Commission Junction.
In this way, Networks such as BeFree and LinkShare could
be adversely affected (through the influx of such
underperformers), while Commission Junction's position
would be further bolstered. I would be curious to hear
the thoughts of others on this list on this possibility.

For anyone interested in this whole matter, we will
actually be releasing detailed exclusive interviews with
Lex Sisney the CEO of Comission Junction and Joel Gehman
of PerformFirst (a leading expert on Affiliate Marketing)
in which we directly address these and related issues,
including the implications of the establishment of the
Commission Junction Open Marketplace for the future of
Affiliate Marketing. These interviews will be going out
by email in a few days.

If you are interested, you can have them sent to you
free by going to http://www.avantmarketer.com.

Ajay Segal

Ajay Segal
::: avant|marketer
 ::: http://www.avantmarketer.com



Received on Thu Aug 02 2001 - 11:16:03 CDT