ONLINE ADS>> Affiliate Program Solutions

From: Mark J. Welch <MarkWelch_at_adbility.com>
Date: Sat, 17 Jul 1999 08:18:38 -0500 (CDT)

I have been hearing about "Affinia" for several months now,
mostly in the form of questions or comparisons.

It's time to start talking about one of this year's hot
venture capital siphons: "affiliate management solutions."
Everybody knows that all these e-commerce merchants will
need to have affiliate programs, so the VC firms are pouring
big money into a bunch of new startups that will be rolling
out over the next three to six months.

The current players, with real services operating, are:
BeFree, LinkShare, ClickTrade, Commission Junction,
Nexchange, and maybe ClickBank and ClickXchange.

In the wings is the announced service and product from
"AffiliateDirect" (a subsidiary of Qsound), which may be
connected in some way with Qsound's acquisition of a
"virtual storefront" company called VirtualSpin (which
competes with such offerings as Yahoo Store, Merchant
Planet, and dozens of others).

But it appears that the next to leave the gate will be
"Affinia" (http://www.affinia.com/), which is now planning
its formal rollout next week.

From everything I have heard (and quite honestly, I have
heard very little sustantively), Affinia sounds like a
"clone" or direct copy of the entire business model of
Nexchange. (I wonder how the folks at Nexchange feel about
hearing that Affinia has already raised $15 million?)

The Nexchange model assumes that web publishers don't want
to send their customers "away" to an e-commerce site and
lose visitors or loyalty. Instead, Nexchange creates a
"virtual storefront" that mirrors the "look and feel" of the
host site, and lets the web publisher choose which products
to offer in the store. Nexchange handles the financial
transactions and either ships the goods or has them
drop-shipped; Nexchange also takes care of customer service
issues.

Ironically, this is in many ways the business model that I
thought LinkShare was pursuing when they first lauched, but
they shifted away from it quite early to mimic what BeFree
was promising.

Apparently, Affinia will offer consolidated payments (one
check to the web publisher for all transactions during the
month), like Nexchange (and like Commission Junction and
ClickTrade, but unlike the "separate check for each vendor"
model used by both LinkShare and BeFree).

From what little I have heard about Affinia, it sounds as
if their business model is extremely similar to Nexchange.
So, here's my query:

- What do other folks know about Affinia, and how will
Affinia differ from Nexchange?

- Is this a useful business model, and what is "right" or
"wrong" with the Nexchange/Affinia approach?

- Who are the other players in the wings getting ready to
roll out new products or services to compete in this space?

-- Mark J. Welch [Adbility's Web Publishers' Advertising Guide]
-- http://www.Adbility.com/WPAG/
-- (925) 462-8483 voice - Pleasanton, California


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Received on Sat Jul 17 1999 - 08:58:38 CDT