E-Commerce Experts Laud Pay-for-Performance as Most Effective Method for Garnering Online Revenues
All-Star Panel of Online Business Professionals Gather at LinkShare Symposium, Warn that Fraud, Spyware Could Derail Explosive Growth
NEW YORK, June 29 /PRNewswire/ -- Pay-for-performance partnerships through affiliate websites offer online merchants the best opportunity to grow their revenues, but excessive fraud, spam and the proliferation of spyware could cause significant, lasting damage to the industry, according to an all-star panel of e-commerce authorities.
Speaking at an invitation-only conference hosted and organized by LinkShare Corporation, a leading performance-based marketing company, the panel -- Kent Anderson, President of macys.com; Scott Blum, Founder and CEO of Buy.com; Carrie Johnson, Senior Analyst, Forrester Research; Adam Dell, Managing General Partner, Impact Venture Partners; and Stephen Urquhart, Utah House of Representatives -- agreed that affiliate programs may outpace search as a cost effective means to drive traffic, that pay-for-performance represents the best way to motivate online business partners, and that proper measurement of online traffic and purchases is critical.
The annual New York City conference, which drew over 800 online executives and industry analysts, also featured noted marketing authority and author Sergio Zyman, who delivered the keynote address and Internet expert Omar Wasow of NPR and WNBC-TV, who served as the moderator for the panel.
"Pay-for-performance affiliate marketing in the real world has a name -- it's called commissioned salespeople [and] they're the most productive people in your stores," said Macys.com's Kent Anderson. "Our fastest-growing areas in the stores, our best-run stores, are typically commission-oriented and I think there's an analogy there because you have a highly motivated sales force."
Forrester's Johnson concurred, saying that the most successful online retailers view affiliates as a sales force that needs to be educated rather than just another low cost advertising channel.
"This is especially important as you get down to things like 'Friendster' and social networking," noted Johnson. "As you get granular into those communities, they can tell when you're faking or throwing around random brands."
Johnson highlighted affiliates' role in building strong brands, citing Overstock.com as an example of a company that had successfully utilized affiliates to create widespread consumer awareness without the benefit of brick-and-mortar stores.
Buy.com's Blum said he believes it will become increasingly important for companies to switch from a pay-for-click model to one that rewards performance, like the affiliate partnership model that LinkShare utilizes. Blum cited the effectiveness of Buy.com's relationships with its affiliates in the LinkShare Network as proof of the strength of the model.
While extolling the virtues of pay-for-performance in online commerce, the group was unanimous in its assessment that fraud, spyware and spam all represent a growing problem that could undermine the confidence of online shoppers. In addition to the law drafted by conference panelist Representative Stephen H. Urquhart, from the Utah House of Representatives, panelists predicted more legislation aimed at combating this threat to consumer confidence and industry growth.
"The first and most important issue in all of this is the notion of trust," said Impact Venture Partners' Dell. "For the Internet to continue to develop and emerge as a viable distribution channel for retail commerce, trust is something that needs to be nurtured."
Dell cited Google as an example of a company that has "an incredible consumer brand," that could be corrupted if it manipulates the power it has to drive traffic to certain sites. He remarked that Google has essentially adopted the affiliate marketing model by sharing the revenue that they charge their customers for driving customer traffic.
"If they abuse that position, they may very quickly lose the trust that the brand has and if they do that it would be hard for consumers to jump back to Google and say 'Oh, I believe these guys to deliver me the information that is most relevant without a financial incentive to do so.'"
Despite serious concerns over problems like spyware, the group said it remains upbeat about the future of online commerce. Carrie Johnson pointed out that she is forecasting 25 percent growth every year over the next five years and added that she is "incredibly optimistic" about the next 5-10 years.
Stephen Messer, Chairman and CEO of LinkShare, noted that the LinkShare Symposium brought out some of the best and brightest executives in the online business world, and that sharing ideas in such a forum is crucial for the industry to grow and remain healthy. LinkShare also made some critical announcements, including the launch of analytics software to enhance merchant and affiliate reporting capabilities. Event attendees also observed that both the caliber and number of attendees reflected a dramatic shift in the industry's perception of affiliate marketing.
"What search was for content, affiliate marketing is for commerce. Affiliates are the web's innovators helping merchants reach their customers and helping customers find the products they need and want," said Messer. "The fact that so many online executives found it worth their while to devote a day to learn how to maximize their affiliate sales channels -- and engage in such healthy debate and discussion shows that our industry continues to grow, and we look forward to a bright future ahead for driving more revenue through the online channel effectively and efficiently."
About LinkShare Corporation
LinkShare Corporation is the leading provider of technology solutions to track, manage, and analyze the performance of sales, marketing, and business development initiatives. Combining patented technology, the reach and distribution of a robust network, and expert account management services, LinkShare empowers clients with the ability to collaborate with partners online and develop cost-efficient pay-for-performance campaigns. LinkShare provides the platform, tools, and reporting to help clients acquire new customers, increase revenues, drive results, and measure success across affiliate, search, and email initiatives. LinkShare clients are Fortune 500 and prominent companies doing business online, and include OfficeMax, J.C. Penney, 1-800-Flowers.com, AT&T Corp., American Express, Avon Products and Dell, Inc. LinkShare was founded in 1996 and is headquartered in New York City, with offices in San Francisco, Denver, and Chicago.
LinkShare is proud to receive financial, operational and strategic support from Mitsui & Co., Ltd. (Nasdaq:MITSY), Mitsui & Co. (U.S.A), Inc., Internet Capital Group (Nasdaq:ICGE), and Comcast Interactive Capital, an affiliate of Comcast Corporation (Nasdaq:CMCSK; CMCSA). Please visit linkshare.com for more information. |
